Federal Updates

Neg Reg begins

Over the last couple of weeks, members from various sectors of the financial aid and higher education communities have gathered in Washington, D.C., to participate in the first sessions of the 2007-08 negotiated rulemaking (Neg Reg) process. Unlike last year's Neg Reg, which addressed a wide variety of issues affecting our industry, this year's teams will focus on only two areas, the TEACH Grant Program and student loan issues.

TEACH grant session I
During the first TEACH grant issues session (held January 8-10), the negotiators reviewed Neg Reg procedures and protocol and agreed to add a non-federal negotiator to the team, before plunging into discussions on the numerous complicated matters to be decided regarding this new program. This is largely uncharted territory for the federal as well as non-federal negotiators: Last year's Neg Reg participants became acquainted with the fusion of merit- and need-based federal student aid in the form of the ACG and SMART Grant Programs, but the TEACH grant, with the potential to convert to an unsubsidized Direct Loan, presents even more complex and critical issues for the negotiators.

Some of the most pressing concerns involve balancing institutional eligibility requirements with student eligibility and awareness requirements — in other words, negotiators hope to open up the program to as many institutions as possible, while also ensuring that recipients are fully aware of the service and academic conditions that accompany the program, and the consequences of not fulfilling those commitments.

Other items discussed include the conversion from grant to loan status, repayment, conforming changes to R2T4 and overpayments, and determination of awards. ED did not add or remove any items from the official agenda, which was reported in Shoptalk Online edition 436. The second TEACH grant session is scheduled to occur January 22-24.

It is interesting to note that the TEACH Grant Program seems to have already garnered a great deal of attention among students: ED has stated that about 15 percent of FAFSA applicants so far have indicated interest in the TEACH grant, which far exceeds the initial projections of the Congressional Budget Office.

Loan session I
The first session of loan issues negotiations concluded on January 9, a day earlier than expected. ED declined to add several suggested topics to the agenda, opting instead, as with the TEACH grant team, to retain at this time the original agenda as outlined. At this first session, the negotiators had the opportunity to discuss all agenda items, and expressed particular concern about two items on the agenda: the new income-based repayment plan and the public service loan forgiveness program.

ED announced that it plans to develop two separate regulations packages, one focusing on changes due to the College Cost Reduction and Access Act of 2007 (CCRAA), and one on the issue of federal preemption of state laws relating to improper inducements and arrangements between schools and lenders. ED also suggested it was reviewing the possibility of increasing aggregate loan limits — in particular for health professions students — outside of the Neg Reg process, and expects to make a decision on that possibility before the next round of negotiations, which is scheduled to take place on February 4-6.

More information
Please visit ED's "2007-08 Negotiated Rulemaking for Higher Education" Web page at www.ed.gov/policy/highered/reg/hearulemaking/2008/index2008.html for more information. The names of committee members selected for the two teams are provided in the January 8 Federal Register, available at http://a257.g.akamaitech.net/7/257/2422/01jan20081800/edocket.access.gpo.gov/2008/pdf/E8-121.pdf. TG will continue to keep its customers informed about the Neg Reg sessions via Shoptalk Online.

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