20326 Federal Register / Vol. 60, No. 79 / Tuesday, April 25, 1995 / Notices

DEPARTMENT OF EDUCATION

Federal Student Assistance Programs

Under Title IV of the Higher Education

Act of 1965, as Amended

AGENCY: Department of Education.

ACTION: Notice inviting proposals for

experimental sites.

SUMMARY: The Secretary invites

institutions of higher education to

propose new ways of administering the

student assistance programs authorized

by Title IV of the Higher Education Act

of 1965, as amended (HEA). Under

section 487A(d) of the HEA, if the

Secretary approves an institution as an

experimental site as a part of this

student aid reform initiative, he may

exempt the institution from any Title IV

statutory or regulatory requirement that

would bias experimental results. The

Secretary anticipates approving

approximately 50 experiments in the

first phase of this initiative and more

after those experiments are in place. The

Secretary establishes no regulatory

requirements for the proposals invited

by this notice.

DATES: Proposals may be submitted in

response to this notice at any time after

April 25, 1995.

ADDRESSES: Jeffrey S. Baker, U.S.

Department of Education, 600

Independence Avenue, SW (Room 3042,

ROB–3), Washington, DC 20202.

FOR FURTHER INFORMATION CONTACT:

Jeffrey S. Baker, telephone: (202) 708–

9261. Individuals who use a

telecommunications device for the deaf

(TDD) may call the Federal Information

Relay Service (FIRS) at 1–800–877–8339

between 8 a.m. and 8 p.m., Eastern time,

Monday through Friday.

SUPPLEMENTARY INFORMATION:

Background

Over the course of the past year, the

Department of Education has made

progress in simplifying regulations and

administrative processes for the Federal

student assistance programs authorized

by Title IV of the HEA. Regulatory

burden on institutions, students, and

families has been reduced, and

institutional flexibility in meeting legal

requirements has been increased.

During the coming months, the

Secretary will undertake a series of

additional initiatives to free institutions

of higher education from administrative

burdens that unnecessarily draw

resources away from their educational

mission. With this notice, the Secretary

invites proposals to reinvent the

administration of Federal student

assistance programs through the use of

the experimental sites authority. At the

same time, at the direction of the

President, the Secretary is conducting a

page-by-page review of all student

financial assistance regulations to

identify those that should be modified

or eliminated. On the basis of these two

initiatives, as well as the Department’s

continuing dialogue with the higher

education community, the Secretary

will also consider developing proposals

for statutory amendments to eliminate

unnecessary administrative burden.

Finally, the Secretary will increase the

flexibility and expand the scope of the

Department’s Institutional Quality

Assurance Program, which employs a

cycle of assessment, improvement, and

preventive actions in the administration

of Title IV programs.

The invitation for proposals in this

notice is a part of the Secretary’s effort

to reform Title IV program

administration in partnership with the

higher education community. The

community has given the Department

the benefit of its views in a variety of

ways during the past year—in

negotiated rulemaking, in comments on

proposed rules, at a series of regional

meetings, and in numerous informal

discussions. The community’s views

were indispensable to the reforms that

the Department has undertaken to date.

It is the Secretary’s hope that the

community will address issues of

program administration that remain to

be resolved in the proposals invited by

this notice.

Invitation for Proposals

The Secretary invites institutions of

higher education that administer one or

more Title IV programs to submit one or

more proposals to participate as

‘‘experimental sites’’ under section

487A(d) of the HEA. This section

authorizes the Secretary to select

institutions for voluntary participation

in experiments to test new ways of

administering the student assistance

programs. The Secretary is further

authorized to exempt a participating

institution from any Title IV statutory or

regulatory requirement that would bias

experimental results.

The Secretary establishes no

regulatory requirements for the

proposals invited by this notice. It is the

Secretary’s hope that this approach will

encourage institutions to develop truly

innovative strategies that relieve

unnecessary burden, maintain program

accountability, and inform the

Department’s future efforts to improve

Title IV program administration. If these

experimental strategies prove

successful, the Secretary intends to

incorporate them into Title IV program

regulations or, if appropriate, legislative

proposals.

Submission of Proposals

Any institution that administers a

Title IV program, or a group of these

institutions, may submit a proposal in

response to this notice at any time by

mailing the proposal to Jeffrey S. Baker

at the address provided at the beginning

of this notice or by faxing it to him at

(202) 205–0786. Early submission is

encouraged, as the Secretary anticipates

that the review of proposals will begin

within 60 days of the date of this notice;

however, proposals that are received

later will also be considered.

The Secretary particularly invites

proposals from institutions that are

participating in the William D. Ford

Federal Direct Loan (Direct Loan)

Program. The availability of

comprehensive and timely management

information under the Direct Loan

Program permits effective monitoring,

evaluation, and adjustment of

administrative practices by participating

institutions. The Secretary encourages

these institutions to develop proposals

that take advantage of this capability.

Similarly, the Secretary encourages

proposals from institutions that are

participating in the Department’s

Institutional Quality Assurance Program

and have developed their own

comprehensive systems to identify and

remedy problems in the administration

of Title IV programs.

The Secretary emphasizes that the

Department seeks to approve proposals

for innovative approaches in a variety of

different areas. Since the Secretary

anticipates approving only a small

number of different experimental

solutions to any one problem, he

encourages institutions to collaborate in

the development of proposals and to

submit proposals together.

To aid in the Department’s review of

proposals, the Secretary suggests, but

does not require, that a proposal be in

the range of two to eight pages and that

it answer the following questions:

◆ What problem experienced by the

institution or its students, or both,

does the proposal address?

◆ What is the institution’s proposed

solution to that problem?

◆ From which specific statutory or

regulatory requirements does the

institution seek relief in order to test

its proposed solution?

◆ What performance measures or

alternative actions does the institution

propose to use to fulfill the

underlying purpose of the

requirements from which relief is

sought?
Federal Register / Vol. 60, No. 79 / Tuesday, April 25, 1995 / Notices 20327

◆ For what period is the experiment

proposed?

◆ When and how will the results of the

experiment be reported to the

Department?

◆ For an experiment proposed by a

group of institutions, how will the

group monitor and aggregate the

results of the experiment?

The following examples illustrate the

elements of the proposals solicited by

this notice. The problems addressed by

the examples were selected because

they have been the subject of

considerable commentary by the higher

education community. The Secretary’s

inclusion of these examples and not

others is in no way intended to

circumscribe the creativity of the

community in identifying problems and

developing solutions to them.

Example 1. An institution finds that

the statutorily-required 30-day delay in

the disbursement of student loan

proceeds to college freshmen makes it

difficult for them to pay for books,

housing, and other educational costs

incurred at the beginning of the school

term. The institution proposes to

disburse loan proceeds by the beginning

of the school term and seeks relief from

the requirements that preclude this

action:

◆ Section 428G(b)(1) of the HEA;

◆ 34 CFR 682.604(c)(5), for the Federal

Family Education Loan (FFEL)

Program; and

◆ 34 CFR 685.303(b)(6) and

685.303(b)(4), for the Direct Loan

Program in its first year and its

subsequent years, respectively.

To address the underlying purpose of

the 30-day delayed disbursement

requirement (protection against possible

losses to the taxpayer and harm to the

student in the event of the student’s

early withdrawal from school), the

institution provides information

indicating that few of its freshmen have

withdrawn from school in the first 30

days of their courses of study. The

institution also describes how it

proposes to measure its performance in

this respect and report that performance

to the Department over a specified

period.

Example 2. An institution finds that

its counseling of student loan

borrowers, required in part by statute

and in part by regulation, is inefficient

and ineffective in ensuring that

borrowers repay their student loans. The

institution proposes an innovative

alternative and seeks relief from the

requirements that preclude this action:

◆ Sections 485(b) and, for the Federal

Perkins Loan Program, 463A of the

HEA;

◆ 34 CFR 682.604 (f) and (g), for the

FFEL Program;

◆ 34 CFR 685.303 (e) and (f), and

685.304, for the Direct Loan Program

in its first year and its subsequent

years, respectively; and

◆ 34 CFR 674.16(a) and 674.42(a) for

the Federal Perkins Loan Program.

To address the underlying purpose of

the entrance and exit counseling

requirements (promotion of borrowers’

understanding of their responsibilities

under the student loan programs), the

institution describes its alternative

approach and explains why it believes

this approach will be more effective. It

also describes how it proposes to

measure its success in ensuring that

borrowers repay their loans and report

its performance to the Department over

a specified period.

(Approved by the Office of Management and

Budget under control number 1840–0708)

Review of Proposals

The Secretary will review each

proposal submitted in response to this

notice on its own merits. If a proposal

is approved, the participating

institution’s program participation

agreement will be amended to reflect

the terms of the experiment, including

the obligations undertaken by the

institution, the requirements from

which the institution is relieved, the

length of the experiment, and the right

of either the institution or the

Department to terminate the

experiment.

In reviewing proposals, the Secretary

will be guided by the statutory purpose

of the experimental sites authority,

namely, to inform future policy choices

relating to the administration of Title IV

programs. The Secretary may approve a

proposal as submitted, reject it, or, if he

finds that a proposal is not fully

approvable but has merit, work with the

institution to refine it. To maximize the

usefulness of experimental sites in

informing future policy choices, the

Secretary may encourage different

approaches in similar institutions and

similar approaches in different types of

institutions. In addition, to ensure the

smooth implementation of this reform

initiative, the Secretary anticipates

approving approximately 50 proposals

from among those submitted in the first

phase of the initiative and more after

those experiments are in place.

Request for Comment

The Secretary invites institutions of

higher education, students, and other

interested parties to comment on the

student aid reform initiative announced

in this notice. Is the Department on the

right track in inviting proposals to

reinvent Title IV program

administration in this way? What else

should the Department be doing to

accomplish the objectives of this

initiative? Does the Department’s nonregulatory guidance impose unnecessary

administrative burdens? If so, how can

the Department provide relief from that

guidance? Comments may be directed to

the contact person identified in this

notice.

Dated: April 19, 1995.

David A. Longanecker,

Assistant Secretary for Postsecondary

Education.

[FR Doc. 95–10101 Filed 4–24–95; 8:45 am]

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