[Federal Register Volume 82, Number 167 (Wednesday, August 30, 2017)]
[Proposed Rules]
[Pages 41194-41197]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-18510]



[[Page 41194]]

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DEPARTMENT OF EDUCATION

34 CFR Chapter VI

[Docket ID ED-2017-OPE-0076]
RIN 1840-AD26


Negotiated Rulemaking Committees; Negotiator Nominations and 
Schedule of Committee Meetings--Borrower Defenses, Financial 
Responsibility, and Gainful Employment

AGENCY: Office of Postsecondary Education, Department of Education.

ACTION: Intent to establish negotiated rulemaking committees.

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SUMMARY: We announce our intention to establish two negotiated 
rulemaking committees to prepare proposed regulations for the Federal 
Student Aid programs authorized under title IV of the Higher Education 
Act of 1965, as amended (HEA). The committees will include 
representatives of organizations or groups with interests that are 
significantly affected by the subject matter of the proposed 
regulations. We request nominations for individual negotiators who 
represent key stakeholder constituencies for the issues to be 
negotiated to serve on the committees, and we set a schedule for 
committee meetings. We also announce the creation of a subcommittee, 
and request nominations for individuals with pertinent expertise to 
participate on the subcommittee.

DATES: We must receive your nominations for negotiators to serve on the 
committees on or before September 29, 2017. The dates, times, and 
locations of the committee meetings are set out in the Schedule for 
Negotiations and Subcommittee Meetings section in the SUPPLEMENTARY 
INFORMATION section.

ADDRESSES: Please send your nominations for negotiators to Wendy 
Macias, U.S. Department of Education, 400 Maryland Ave. SW., Room 
6C111, Washington, DC 20202. Telephone: (202) 203-9155 or by email: 
<a href="/cdn-cgi/l/email-protection#9df3f8faeff8faf3f2f0f4f3fce9f4f2f3eeddf8f9b3faf2eb"><span class="__cf_email__" data-cfemail="355b50524750525b5a585c5b54415c5a5b467550511b525a43">[email protected]</span></a>.

FOR FURTHER INFORMATION CONTACT: For information about the content of 
this document, including information about the negotiated rulemaking 
process or the nomination submission process, contact: Wendy Macias, 
U.S. Department of Education, 400 Maryland Ave. SW., Room 6C111, 
Washington, DC 20202. Telephone: (202) 203-9155 or by email: 
<a href="/cdn-cgi/l/email-protection#4e192b202a3760032f2d272f3d0e2b2a60292138"><span class="__cf_email__" data-cfemail="9ccbf9f2f8e5b2d1fdfff5fdefdcf9f8b2fbf3ea">[email protected]</span></a>.
    For information about negotiated rulemaking in general, see The 
Negotiated Rulemaking Process for Title IV Regulations, Frequently 
Asked Questions at www2.ed.gov/policy/highered/reg/hearulemaking/hea08/neg-reg-faq.html or contact: Wendy Macias, U.S. Department of 
Education, 400 Maryland Ave. SW., Room 6C111, Washington, DC 20202. 
Telephone: (202) 203-9155 or by email: <a href="/cdn-cgi/l/email-protection#17407279736e395a76747e766457727339707861"><span class="__cf_email__" data-cfemail="1245777c766b3c5f73717b73615277763c757d64">[email protected]</span></a>.
    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.

SUPPLEMENTARY INFORMATION: On June 16, 2017, we published a document in 
the Federal Register (82 FR 27640) announcing our intent to establish 
two negotiated rulemaking committees under section 492 of the HEA to 
develop proposed regulations to (1) revise the gainful employment 
regulations published by the Department on October 31, 2014 (79 FR 
64889), and (2) revise the regulations on borrower defenses to 
repayment of Federal student loans and other matters, and on the 
authority of guaranty agencies in the Federal Family Education Loan 
(FFEL) Program to charge collection costs under 34 CFR 682.410(b)(6) to 
a defaulted borrower who enters into a repayment agreement with the 
guaranty agency. We also announced two public hearings at which 
interested parties could comment on the topics suggested by the U.S. 
Department of Education (Department) and suggest additional topics for 
consideration for action by the negotiated rulemaking committees. Those 
hearings were held on July 10, 2017, in Washington, DC, and on July 12, 
2017, in Dallas, Texas. We invited parties to comment and submit topics 
for consideration in writing as well. Transcripts from the public 
hearings are available at www2.ed.gov/policy/highered/reg/hearulemaking/2017/index.html. Written comments submitted in response 
to the June 16, 2017, document 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-2017-OPE-0076 
in the search box to locate the appropriate docket.

Regulatory Issues

    After considering the information received at the public hearings 
and the written comments, we have decided to establish the following 
two negotiating committees:

Committee 1--Borrower Defenses and Financial Responsibility Issues
Committee 2--Gainful Employment Issues

    We list the specific topics the committees are likely to address 
under Committee Topics, below.
    We intend to select negotiators for the committees who represent 
the interests significantly affected by the topics proposed for 
negotiations. In so doing, we will follow the requirement in section 
492(b)(1) of the HEA that the individuals selected must have 
demonstrated expertise or experience in the relevant topics proposed 
for negotiations. We will also select individual negotiators who 
reflect the diversity among program participants, in accordance with 
section 492(b)(1) of the HEA. Our goal is to establish committees that 
will allow significantly affected parties to be represented while 
keeping the committee size manageable.
    We generally select a primary and alternate negotiator for each 
constituency represented on a committee. The primary negotiator 
participates for the purpose of determining consensus. The alternate 
participates for the purpose of determining consensus in the absence of 
the primary. Either the primary or the alternate may speak during the 
negotiations.
    A committee may create subgroups on particular topics that may 
involve individuals who are not members of the committee. In addition, 
individuals who are not selected as members of the committee will be 
able to observe the committee meetings, will have access to the 
individuals representing their constituencies, and may be able to 
participate in informal working groups on various issues between the 
meetings.

Committee Topics

    The topics the committees are likely to address are:

Committee 1--Borrower Defenses and Financial Responsibility Issues

    1. Revisions to the regulations on borrower defenses to repayment 
of Federal student loans and other matters:
    <bullet> Borrower Defense (34 CFR 685.206);
    <bullet> Misrepresentation (34 CFR 668 subpart F);
    <bullet> Program Participation Agreement (34 CFR 668.14(b));
    <bullet> Closed School Discharge (34 CFR 682.402, 34 CFR 685.214);
    <bullet> False Certification (34 CFR 685.215);
    <bullet> Financial Responsibility and Administrative Capability (34 
CFR 668 subpart L, 34 CFR 668.16); and
    <bullet> Arbitration and class action lawsuits.
    2. Revisions to regulations that will address whether and to what 
extent guaranty agencies may charge collection

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costs under 34 CFR 682.410(b)(6) to a defaulted borrower who enters 
into a loan rehabilitation or other repayment agreement within 60 days 
of being informed that the guaranty agency has paid a claim on the 
loan.
    As part of the negotiated rulemaking process, we are forming a 
Financial Responsibility Subcommittee for Committee 1 to have 
preliminary discussions of whether or how the Financial Accounting 
Standards Board's (FASB) recent changes to the accounting standards for 
financial reporting (see FASB Accounting Standards Update (ASU) 2016-14 
``Presentation of Financial Statement of Not-for-Profit Entities'' at 
http://fasb.org/jsp/FASB/Document_C/DocumentPage?cid=1176168381847&acceptedDisclaimer=true) necessitate 
modifications to the Department's financial responsibility regulations 
with respect to the calculation of the Primary Reserve Ratio, the 
Equity Ratio, and the Net Income Ratio that are used to calculate an 
institution's composite score, as well as whether clarifications of 
terms used in the Primary Reserve, Equity, and Net Income ratio 
calculations in appendix B to 34 CFR part 668, subpart L, are needed as 
a result of changes in the financial accounting standards, including:
    <bullet> For the Primary Reserve Ratio: (1) Changes to the 
definition of ``expendable net assets'' in the numerator to conform to 
new terminology; (2) changes to the definition of ``total expenses'' in 
the denominator to conform to new terminology; and (3) clarification of 
the treatment of endowment losses, terms of endowments, retirement 
liabilities, long-term debt, and construction-in-progress.
    <bullet> For the Equity Ratio, changes to the definition of 
``modified net assets'' in the numerator to conform to new terminology.
    <bullet> For the Net Income Ratio: (1) Changes to the definition of 
``change in unrestricted net assets'' in the numerator to conform to 
new terminology; (2) the addition of losses from underwater endowments 
to the numerator to reflect changes in treatment; (3) changes to the 
definition of ``total unrestricted revenue'' in the denominator to 
conform to new terminology; (4) clarification of the treatment of other 
investment and pension trust fund losses; and (5) changes to the 
treatment of leases.
    Subcommittees are formed to address specified issues and to make 
recommendations to the committee. Subcommittees are not authorized to 
make decisions for the committee. The Financial Responsibility 
Subcommittee may be comprised of some Committee 1 members (negotiators) 
as well as individuals who are not committee members, but who have 
expertise that will be helpful in developing proposed regulations. 
Therefore, in addition to asking for nominations for individual 
negotiators who represent key stakeholder constituencies for the issues 
to be negotiated to serve on this committee (see Constituencies for 
Negotiator Nominations), we are asking for nominations for individuals 
with specific types of expertise to serve on the Financial 
Responsibility Subcommittee (see Areas of Expertise for Financial 
Responsibility Subcommittee). The topics for the subcommittee are 
primarily focused on issues affecting non-profits, but may touch issues 
that affect other sectors, so we welcome nominees with expertise across 
institution types. The subcommittee meetings will be held between 
committee meetings (see Schedule for Negotiations and Subcommittee 
Meetings). Before the conclusion of the negotiations, the Financial 
Responsibility Subcommittee will present any recommendations for 
changes to Committee 1 for its consideration.

Committee 2--Gainful Employment Issues

    Revisions to the gainful employment regulations in 34 CFR part 668, 
subpart Q, including, but not limited to, the debt-to-earnings rates 
measure, sanctions, and reporting and disclosure of information, as 
well as related reporting and disclosure regulations in 34 CFR 668.41.
    Topics for both committees may be added or removed as the process 
continues.

Constituencies for Negotiator Nominations

    We have identified the following constituencies as having interests 
that are significantly affected by the topics proposed for 
negotiations. The Department plans to seat as negotiators individuals 
from organizations or groups representing these constituencies.

Committee 1--Borrower Defenses and Financial Responsibility Issues

    <bullet> Students and former students.
    <bullet> Consumer advocacy organizations.
    <bullet> Legal assistance organizations that represent students and 
former students.
    <bullet> Groups representing U.S. military service member or 
veteran Federal student loan borrowers.
    <bullet> Financial aid administrators at postsecondary 
institutions.
    <bullet> General counsels/attorneys and compliance officers at 
postsecondary institutions to address issues related to establishing a 
process for reviewing borrower defense claims and determining 
institutional liabilities associated with such claims, as well as 
administrative repayment liabilities for this topic through program 
reviews and audit determinations under the Department's regulations.
    <bullet> Chief financial officers and experienced business officers 
at postsecondary institutions to address issues such as institutional 
financing and liability, as opposed to student billing.
    <bullet> State attorneys general and other appropriate State 
officials.
    <bullet> State higher education executive officers.
    <bullet> Institutions of higher education eligible to receive 
Federal assistance under title III, parts A, B, and F, and title V of 
the HEA, which include Historically Black Colleges and Universities, 
Hispanic-Serving Institutions, American Indian Tribally Controlled 
Colleges and Universities, Alaska Native and Native Hawaiian-Serving 
Institutions, Predominantly Black Institutions, and other institutions 
with a substantial enrollment of needy students as defined in title III 
of the HEA.
    <bullet> Two-year public institutions of higher education.
    <bullet> Four-year public institutions of higher education.
    <bullet> Private, nonprofit institutions of higher education.
    <bullet> Private, for-profit institutions of higher education with 
an enrollment of 450 students or less.
    <bullet> Private, for-profit institutions of higher education with 
an enrollment of 451 students or more.
    <bullet> FFEL Program lenders and loan servicers.
    <bullet> FFEL Program guaranty agencies and guaranty agency 
servicers (including collection agencies).
    <bullet> Accrediting agencies.

Committee 2--Gainful Employment Issues

    <bullet> Students and former students.
    <bullet> Consumer advocacy organizations.
    <bullet> Legal assistance organizations that represent students and 
former students.
    <bullet> Groups representing U.S. military service member or 
veteran Federal student loan borrowers.
    <bullet> Financial aid administrators at postsecondary 
institutions.
    <bullet> General counsels/attorneys and compliance officers at 
postsecondary institutions.

[[Page 41196]]

    <bullet> Chief financial officers and experienced business officers 
at postsecondary institutions.
    <bullet> State attorneys general and other appropriate State 
officials.
    <bullet> State higher education executive officers.
    <bullet> Business and industry (for example, labor economists or 
data experts).
    <bullet> Institutions of higher education eligible to receive 
Federal assistance under title III, parts A, B, and F, and title V of 
the HEA, which include Historically Black Colleges and Universities, 
Hispanic-Serving Institutions, American Indian Tribally Controlled 
Colleges and Universities, Alaska Native and Native Hawaiian-Serving 
Institutions, Predominantly Black Institutions, and other institutions 
with a substantial enrollment of needy students as defined in title III 
of the HEA.
    <bullet> Two-year public institutions of higher education.
    <bullet> Four-year public institutions of higher education.
    <bullet> Private, nonprofit institutions of higher education.
    <bullet> Private, for-profit institutions of higher education with 
an enrollment of 450 students or less.
    <bullet> Private, for-profit institutions of higher education with 
an enrollment of 451 students or more.
    <bullet> Accrediting agencies.
    The goal of each committee is to develop proposed regulations that 
reflect a final consensus of the committee. Consensus means that there 
is no dissent by any member of a negotiating committee, including the 
committee member representing the Department. An individual selected as 
a negotiator is expected to represent the interests of his or her 
organization or group and participate in the negotiations in a manner 
consistent with the goal of developing proposed regulations on which 
the committee will reach consensus. If consensus is reached, all 
members of the organization or group represented by a negotiator are 
bound by the consensus and are prohibited from commenting negatively on 
the resulting proposed regulations. The Department will not consider 
any such negative comments on the proposed regulations that are 
submitted by members of such an organization or group.

Areas of Expertise for Subcommittee on Financial Responsibility

    The Department plans to select individuals from organizations or 
groups with expertise in both financial accounting standards and the 
Department's financial responsibility standards for institutions for 
participation on the Financial Responsibility Subcommittee, which is 
part of Committee 1. Nominations must include evidence of the nominee's 
specific knowledge in these areas. Such individuals from organizations 
or groups may include, but are not limited to, representatives of:
    <bullet> Private, nonprofit institutions of higher education, with 
knowledge of the accounting standards and title IV financial 
responsibility requirements for the private, nonprofit sector.
    <bullet> Private, for-profit institutions of higher education, with 
knowledge of the accounting standards and title IV financial 
responsibility requirements for the for-profit sector.
    <bullet> Accrediting agencies.
    <bullet> Chief financial officers (to include experienced business 
officers and bursars) at postsecondary institutions.
    <bullet> Associations or organizations that provide accounting 
guidance to auditors and institutions.
    <bullet> Certified public accountants or firms who conduct 
financial statement audits of title IV participating institutions.
    <bullet> The Financial Accounting Standards Board (FASB), with 
expertise in the applicable financial accounting and reporting 
standards set by FASB.

Nominations

    Nominations should include:
    <bullet> The committee (Borrower Defenses and Financial 
Responsibility or Gainful Employment) or subcommittee (Financial 
Responsibility) for which the nominee is nominated.
    <bullet> The name of the nominee, the organization or group the 
nominee represents, and a description of the interests that the nominee 
represents.
    <bullet> Evidence of the nominee's expertise or experience in the 
topics proposed for negotiations.
    <bullet> Evidence of support from individuals or groups within the 
constituency or area of expertise that the nominee will represent.
    <bullet> The nominee's commitment that he or she will actively 
participate in good faith in the development of the proposed 
regulations.
    <bullet> The nominee's contact information, including address, 
phone number, and email address.
    For a better understanding of the negotiated rulemaking process, 
prior to committing to participate, nominees should review The 
Negotiated Rulemaking Process for Title IV Regulations, Frequently 
Asked Questions at www2.ed.gov/policy/highered/reg/hearulemaking/hea08/neg-reg-faq.html.
    Nominees will be notified whether or not they have been selected as 
soon as the Department's review process is completed.

Schedule for Negotiations and Subcommittee Meetings

    Committee 1--Borrower Defenses and Financial Responsibility Issues 
committee will meet for three sessions on the following dates:

Session 1: November 13-15, 2017
Session 2: January 8-11, 2018
Session 3: February 12-15, 2018

    Sessions will run from 9 a.m. to 5 p.m.
    The November committee meetings will be held at the Holiday Inn 
Washington Capitol at: 550 C Street SW., Congressional II Room, 
Washington, DC 20024.
    The January committee meetings will be held at the U.S. Department 
of Education at: Union Center Plaza (UCP) Center, 830 First Street NE., 
Lobby Level, Washington, DC 20002.
    The February committee meetings will be held at the U.S. Department 
of Education at: Barnard Auditorium, 400 Maryland Ave. SW., Washington, 
DC 20202.
    The committee meetings are open to the public.
    The Financial Responsibility Subcommittee will meet on the 
following dates:

Meeting 1: November 16-17, 2017
Meeting 2: January 4-5, 2018
Meeting 3: January 29-30, 2018

    Meetings will run from 9 a.m. to 5 p.m.
    The subcommittee meetings will be held at the U.S. Department of 
Education: Training and Development Center, First floor, 400 Maryland 
Ave. SW., Washington, DC 20202.
    The November 16-17, 2016, meeting will be held in room 1W103. The 
January 4-5, 2017, meeting will be held in room 1W128. The January 29-
30, 2017, meeting will be held in Room 1W103. Arrangements will be made 
to allow members to attend remotely.
    The subcommittee meetings are not open to the public.
    Committee 2--Gainful Employment Issues committee will meet for 
three sessions on the following dates:

Session 1: December 4-7, 2017
Session 2: February 5-8, 2018
Session 3: March 12-15, 2018

    Sessions will run from 9 a.m. to 5 p.m.
    The December committee meetings will be held at the U.S. Department 
of Education at: Union Center Plaza (UCP) Learning Center, 830 First 
Street NE., Lobby Level, Washington, DC 20002.

[[Page 41197]]

    The February committee meetings will be held at the U.S. Department 
of Education: Barnard Auditorium, 400 Maryland Ave. SW., Washington, DC 
20202.
    The March committee meetings will be held at the U.S. Department of 
Education at: Potomac Center Plaza Auditorium, 550 12th Street SW., 
Washington, DC 20202.
    The committee meetings are open to the public.
    Accessible Format: 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, 400 Maryland Ave. SW., Room 6C111, Washington, DC 20202. 
Telephone: (202) 203-9155 or by email: <a href="/cdn-cgi/l/email-protection#f5a2909b918cdbb894969c9486b59091db929a83"><span class="__cf_email__" data-cfemail="36615358524f187b57555f574576535218515940">[email protected]</span></a>.
    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 this Department published in the Federal 
Register, in text or 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.

Kathleen A. Smith,
Acting Assistant Secretary for Postsecondary Education.
[FR Doc. 2017-18510 Filed 8-29-17; 8:45 am]
BILLING CODE 4000-01-P


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