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[Federal Register Volume 78, Number 73 (Tuesday, April 16, 2013)]
[Proposed Rules]
[Pages 22467-22469]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-08891]

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DEPARTMENT OF EDUCATION

34 CFR Chapter VI

[Docket ID ED-2013-OPE-0008]

Negotiated Rulemaking Committee; Public Hearings

AGENCY: Office of Postsecondary Education, Department of Education.

ACTION: Intent to establish negotiated rulemaking committee.

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SUMMARY: In May 2012, we announced our intention to establish a 
negotiated rulemaking committee to prepare proposed regulations for the 
Federal Student Aid programs authorized under title IV of the Higher 
Education Act of 1965, as amended (HEA) (title IV Federal Student Aid 
programs). We now announce additional topics for consideration for 
action by that committee. We also announce three public hearings at 
which interested parties may comment on the new topics suggested by the 
Department and may suggest additional topics for consideration for 
action by the negotiated rulemaking committee. For anyone unable to 
attend a public hearing, the Department will accept written comments.

DATES: The dates, times, and locations of the public hearings are 
listed under the SUPPLEMENTARY INFORMATION section of this notice. We 
must receive written comments suggesting issues that should be 
considered for action by the negotiated rulemaking committee on or 
before May 30, 2013.

ADDRESSES: Submit your comments through the Federal eRulemaking Portal 
or via postal mail, commercial delivery, or hand delivery. We will not 
accept comments by fax or by email. To ensure that we do not receive 
duplicate copies, please submit your comments only once. In addition, 
please include the Docket ID (listed at the beginning of this notice) 
at the top of your comments.
     Federal eRulemaking Portal: Go to www.regulations.gov to 
submit your comments electronically. Information on using 
Regulations.gov, including instructions for accessing agency documents, 
submitting comments, and viewing the docket is available on the site 
under ``How to Use Regulations.gov'' in the Help section.
     Postal Mail, Commercial Delivery, or Hand Delivery. If you 
mail or deliver your comments about these proposed regulations, address 
them to Wendy Macias, U.S. Department of Education, 1990 K Street NW., 
Room 8017, Washington, DC 20006.

    Privacy Note: The Department's policy is to make all comments 
received from members of the public available for public viewing in 
their entirety on the Federal eRulemaking Portal at 
www.regulations.gov. Therefore, commenters should be careful to 
include in their comments only information that they wish to make 
publicly available.

FOR FURTHER INFORMATION CONTACT: For information about the public 
hearings, go to http://www2.ed.gov/policy/highered/reg/hearulemaking/2012/index.html or contact: Wendy Macias, U.S. Department of Education, 
1990 K Street NW., Room 8017, Washington, DC 20006. Telephone: (202) 
502-7526. Email: wendy.macias@ed.gov.
    For information about negotiated rulemaking in general, see The 
Negotiated Rulemaking Process for Title IV Regulations, Frequently 
Asked Questions at http://www2.ed.gov/policy/highered/reg/hearulemaking/hea08/neg-reg-faq.html or contact: Wendy Macias, U.S. 
Department of Education, 1990 K Street NW., Room 8017, Washington, DC 
20006. Telephone: (202) 502-7526. Email: wendy.macias@ed.gov.
    If you use a telecommunications device for the deaf (TDD) or text 
telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-
800-877-8339.
    Individuals with disabilities can obtain this document in an 
accessible format (e.g., braille, large print, audiotape, or compact 
disc) by contacting Wendy Macias, U.S. Department of Education, 1990 K 
Street NW., Room 8017, Washington, DC 20006. Telephone: (202) 502-7526. 
Email: wendy.macias@ed.gov.

SUPPLEMENTARY INFORMATION: On May 1, 2012, we published a notice in the 
Federal Register (77 FR 25658) announcing our intent to establish a 
negotiated rulemaking committee under section 492 of the HEA to develop 
proposed regulations designed to prevent fraud and otherwise ensure 
proper use of title IV Federal Student Aid program funds, especially 
within the context of current technologies. In particular, we announced 
our intent to propose regulations to address the use of debit cards and 
other banking mechanisms for disbursing title IV Federal Student Aid 
program funds, and to improve and streamline the campus-based Federal 
Student Aid programs. The notice also announced two public hearings at 
which interested parties could comment on the topics suggested by the 
Department and suggest additional topics for consideration for action 
by the negotiated rulemaking committee. The hearings were held on May 
23, 2012, in Phoenix, Arizona, and on May 31, 2012, in Washington, DC. 
We invited parties to comment and submit topics for consideration in 
writing as well. Transcripts from the hearings can be found at http://www2.ed.gov/policy/highered/reg/hearulemaking/2012/index.html. Written 
comments may be viewed through the Federal eRulemaking Portal at 
www.regulations.gov. Instructions for finding comments are available on 
the site under ``How to Use Regulations.gov'' in the Help section. 
Individuals can enter docket ID ED-2012-OPE-0008 in the search box to 
locate the appropriate docket.
    At this time, we are announcing additional topics for consideration 
for action by the negotiated rulemaking committee. These topics include 
regulations that have been the subject of litigation over the past two 
years. We are also announcing three additional public hearings at which 
interested parties may comment on the new topics suggested by the 
Department and may suggest additional topics for consideration for 
action by the negotiating committee. For anyone unable to attend a 
public hearing, the Department will accept written comments.
    We intend to select participants for the negotiated rulemaking 
committee from nominees of the organizations and groups that represent 
the interests significantly affected by the proposed regulations. To 
the extent possible, we will select individual negotiators who reflect 
the diversity among program participants, in accordance with section 
492(b)(1) of the HEA.

Regulatory Issues

    Over the next several years, the Department intends to conduct 
rulemakings related to the title IV Federal Student Aid programs. In 
the near term, as indicated by the topics suggested in the May 1, 2012, 
Federal

[[Page 22468]]

Register notice and in this notice, we plan to address program 
integrity issues that place title IV Federal Student Aid program funds 
at risk. We expect to announce the formation of additional negotiated 
rulemaking committees to address more directly access to, and the 
affordability of, higher education and possible steps to improve the 
quality of higher education in the United States and to better 
encourage students to complete their education. This long-term agenda 
will take several years to complete.
    The additional topics for consideration for action by the next 
negotiated rulemaking committee are: cash management of funds provided 
under the title IV Federal Student Financial Aid programs; State 
authorization for programs offered through distance education or 
correspondence education; State authorization for foreign locations of 
institutions located in a State; clock-to-credit hour conversion; 
gainful employment; changes made by the Violence Against Women 
Reauthorization Act of 2013 (VAWA Reauthorization), Public Law 113-4, 
to the campus safety and security reporting requirements in the HEA; 
and the definition of ``adverse credit'' for borrowers in the Federal 
Direct PLUS Loan Program.

Cash Management

    In response to the May 1, 2012, Federal Register notice, we heard 
testimony and received comments on disbursing title IV Federal Student 
Aid program funds by electronic funds transfer (EFT) and on whether 
students should have a greater role in deciding to accept debit cards 
or other banking services that are provided through an institutionally-
controlled process or contracted provider. We are interested in further 
modifying and updating the Department's cash management regulations in 
subpart K of 34 CFR part 668. In particular, we are interested in 
reducing the time by which an institution must refund to a student any 
title IV Federal Student Aid program funds that are more than the 
amount the institution charges for tuition and fees and other 
educationally related costs, amending the regulations relating to 
requirements for student authorizations, specifying when and how an 
institution must disburse title IV Federal Student Aid program funds, 
and addressing how title IV Federal Student Aid program funds are 
provided to domestic and foreign schools and to students. In addition, 
we are considering developing regulations governing how an institution 
may use or invest title IV Federal Student Aid program funds held in 
its federal or operating accounts or, if the institution transfers the 
funds to a third-party servicer to make disbursements to students, how 
those funds are managed by the provider.

State Authorization for Programs Offered Through Distance Education or 
Correspondence Education

    On October 29, 2010, we published final regulations (75 FR 66831) 
to clarify what is required for an institution of higher education, a 
proprietary institution of higher education, and a postsecondary 
vocational institution to be considered legally authorized by a State 
to offer an educational program in that State. The regulations in 34 
CFR 600.9(c) specifically provided that, if an institution is offering 
postsecondary education through distance or correspondence education to 
students in a State in which the institution is not physically located 
or in which it is otherwise subject to State jurisdiction as determined 
by the State, the institution would be required to meet any State 
requirements for it to legally offer postsecondary distance or 
correspondence education in that State. Furthermore, under 34 CFR 
600.9(c), an institution was required to document the State's approval 
upon the Secretary's request.
    On July 12, 2011, in response to a legal challenge by the Career 
College Association, the U.S. District Court for the District of 
Columbia vacated the regulation under 34 CFR 600.9(c) on procedural 
grounds. Career College Ass'n v. Duncan, 796 F. Supp. 2d 108 (D.D.C. 
2011). On August 14, 2012, on appeal, the U.S. Court of Appeals for the 
D.C. Circuit affirmed the decision of the district court and ruled that 
the regulation under 34 CFR 600.9(c) is not a logical outgrowth of the 
Department's proposed rules. It remanded the case to the district court 
with instructions to remand the regulation to the Department for 
reconsideration consistent with the D.C. Circuit's opinion. Ass'n of 
Private Sector Colleges and Universities v. Duncan, 681 F.3d 427 (D.C. 
Cir. 2012). In order to address the procedural concerns identified by 
the D.C. Circuit, the Department is now considering regulatory changes 
related to State authorization for programs offered through distance 
education or correspondence education.

State Authorization for Foreign Locations of Institutions Located in a 
State

    State authorization requirements for institutions located in a 
State (as the term ``State'' is defined in 34 CFR 600.2) are 
established in 34 CFR 600.9. The regulations do not specifically 
address the State authorization requirements for foreign locations 
(i.e., locations that are not located in a State) of institutions 
located in a State. The Department is considering amending the State 
authorization regulations to establish authorization requirements for 
such foreign locations.

Clock to Credit Hour Conversion

    We have heard concerns from schools and other parties about whether 
schools should track the underlying clock hours in a program after the 
program is converted to credit hours, as well as how the Department 
should consider State approval or licensing requirements in determining 
that a program is measured in clock hours for the purpose of awarding 
title IV Federal Student Aid program funds. The clock to credit hour 
conversion regulations are in 34 CFR 668.8(k) and (l). We are 
requesting public input on whether these issues should be addressed by 
the negotiated rulemaking committee.

Gainful Employment

    On June 30, 2012, in response to a legal challenge by the 
Association of Private Sector Colleges and Universities, the U.S. 
District Court for the District of Columbia invalidated the repayment 
rate threshold in the gainful employment regulations, and set aside the 
requirement for institutions to report gainful employment program 
information to the Department. Ass'n of Private Colleges and 
Universities v. Duncan (D.D.C. 2012). That litigation is still ongoing; 
however, the Department is interested in public input in this area. The 
Department is interested in potential approaches to defining what it 
means for a program to prepare students for gainful employment in a 
recognized occupation. This includes thoughts on the best measures 
(such as debt-to-earnings ratios or repayment rates) and their 
thresholds for defining or evaluating gainful employment programs, how 
best to construct an accountability system that accurately 
distinguishes between successful and unsuccessful programs, and how to 
address the establishment of new programs, as well as related ideas. In 
considering these questions, the Department recommends taking into 
account the information included in the program-level data we gathered 
and released as Information Rates on June 26, 2012, available at http://studentaid.ed.gov/about/data-center/school/ge.

[[Page 22469]]

Campus Safety and Security Reporting

    The VAWA Reauthorization, enacted March 7, 2013, amended section 
485(f) of the HEA, known as the Jeanne Clery Disclosure of Campus 
Security Policy and Campus Crime Statistics Act (the Clery Act). These 
amendments address the high rates of dating violence and sexual assault 
on college campuses by requiring institutions to provide information to 
students about domestic violence, dating violence, sexual assault, and 
stalking, and to inform students and staff about the number of these 
crimes that occur on and near campus. Institutions are also required to 
create and disseminate policies describing the protections, resources, 
and services available to victims to help them safely continue their 
education. We intend to develop proposed regulations to implement these 
changes.

Definition of ``Adverse Credit'' for the Direct PLUS Loan Program

    The PLUS Loan Program provides loans up to the amount of the cost 
of attendance to graduate students and parents. In light of the unique 
nature of the PLUS Loan Program, Congress limited eligibility to 
graduate or professional students or parents who do not have an adverse 
credit history, as determined pursuant to regulations promulgated by 
the Secretary. Under regulations published by the Department in 1994, a 
PLUS loan applicant is considered to have an ``adverse credit history'' 
if the applicant (1) is 90 or more days delinquent on the repayment of 
any debt or (2) has been the subject of a default determination, 
bankruptcy discharge, foreclosure, repossession, tax lien, wage 
garnishment, or write-off of a title IV debt during the five years 
preceding the date of the credit report (34 CFR 685.200(c)(1)(vii)(B)). 
Since 1994, much has changed in consumer credit markets and credit 
reporting, and PLUS loans are no longer delivered through both the 
Federal Family Education Loan Program as well as the William D. Ford 
Direct Loan (Direct Loan) Program. Now, new PLUS Loans are only made 
through the Direct Loan Program. For these reasons, the Department is 
seeking public comment on whether and how it may be appropriate to 
modify the current regulatory definition of ``adverse credit.''
    After a review of the public comments presented at the public 
hearings and in the written submissions, we will publish a notice in 
the Federal Register announcing the specific subject areas for which we 
intend to establish a negotiated rulemaking committee and requesting 
nominations for individual negotiators for the committee who represent 
the interests significantly affected by the proposed regulations. This 
notice will also be posted on the Department's Web site at: http://www2.ed.gov/policy/highered/reg/hearulemaking/2012/index.html.

Public Hearings

    We will hold three public hearings for interested parties to 
discuss the topics included in this notice and to suggest additional 
topics for the rulemaking agenda.
    The public hearings will be held on:
     May 21, 2013, at the U.S. Department of Education, 1990 K 
Street, NW., Eighth Floor Conference Center, Washington, DC 20006.
     May 23, 2013, at the University of Minnesota, Twin Cities, 
Hubert H. Humphrey School of Public Affairs, Cowles Auditorium, 301 
19th Avenue S, Minneapolis, MN 55455.
     May 30, 2013, at the University of California, San 
Francisco, UC Hall, Toland Hall Auditorium (Room U142), 533 Parnassus 
Avenue, San Francisco, CA 94143.
    The public hearings will be held from 9:00 a.m. to 4:00 p.m., local 
time. Further information on the public hearing sites, including 
directions, is available at http://www2.ed.gov/policy/highered/reg/hearulemaking/2012/index.html.
    Individuals desiring to present comments at the public hearings 
must register by sending an email to negreghearing@ed.gov. The email 
should include the name of the presenter along with a general timeframe 
during which the individual would like to speak (for example, a 
presenter could indicate morning or afternoon, or before 11:00 a.m. or 
after 3:00 p.m.). We will attempt to accommodate each speaker's 
preference but, if we are unable to do so, we will make the 
determination on a first-come, first-served basis (based on the time 
and date the email was received). It is likely that each participant 
will be limited to five minutes. The Department will notify registrants 
of the location and time slot reserved for them. An individual may make 
only one presentation at the public hearings. If we receive more 
registrations than we are able to accommodate, the Department reserves 
the right to reject the registration of an entity or individual that is 
affiliated with an entity or individual that is already scheduled to 
present comments and to select among registrants to ensure that a broad 
range of entities and individuals is allowed to present. We will accept 
walk-in registrations for any remaining time slots on a first-come, 
first-served basis beginning at 8:30 a.m. on the day of the public 
hearing at the Department's on-site registration table.
    Speakers may also submit written comments. In addition, for anyone 
who does not present at a public hearing, the Department will accept 
written comments through May 30, 2013. (See the ADDRESSES sections of 
this notice for submission information.)

Schedule for Negotiations

    We anticipate that any committee established after the public 
hearings will begin negotiations in September 2013, with the committee 
meeting for up to three sessions of approximately four days each at 
roughly monthly intervals. The committee will meet in the Washington, 
DC area. The dates and locations of these meetings will be published in 
a subsequent document in the Federal Register, and will be posted on 
the Department's Web site at: http://www2.ed.gov/policy/highered/reg/hearulemaking/2012/index.html.

Electronic Access to This Document

    The official version of this document is the document published in 
the Federal Register. Free Internet access to the official edition of 
the Federal Register and the Code of Federal Regulations is available 
via the Federal Digital System at: www.gpo.gov/fdsys. At this site you 
can view this document, as well as all other documents of the 
Department published in the Federal Register, in text or Adobe Portable 
Document Format (PDF). To use PDF you must have Adobe Acrobat Reader, 
which is available free at the site. You may also access documents of 
the Department published in the Federal Register by using the article 
search feature at: www.federalregister.gov. Specifically, through the 
advanced search feature at this site, you can limit your search to 
documents published by the Department.

    Program Authority:  20 U.S.C. 1098a.

    Dated: April 11, 2013.
Martha Kanter,
Under Secretary for Education.
[FR Doc. 2013-08891 Filed 4-15-13; 8:45 am]
BILLING CODE 4000-01-P
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