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Business and Policy Areas
Business and Policy Areas

ED Opens New Rulemaking Effort

May 2, 2012

Changes to federal student aid rules addressing fraud, disbursement, and the campus-based student aid programs will be the focus of a new negotiated rulemaking initiative announced by the Department of Education. This comes less than a month after two other negotiated rulemaking teams—one looking at regulations governing the federal guaranteed loan programs and the other addressing teacher preparation programs—finished their deliberations.

ED has raised three areas for consideration:

Combating Fraud. Last fall the ED Office of Inspector General issued a report highlighting fraud rings that target distance education programs in particular. While ED has recommended some measures that institutions can take to combat fraud within the current regulatory framework, the agency seeks suggestions for regulatory changes that will better protect against fraud.

Disbursement of Aid. ED also suggests changes be made to regulations governing disbursement of federal student aid to students. The notice mentions the use of electronic funds transfer, rather than checks, as a means of preventing fraud. ED also asks “whether students should have a greater role in deciding to accept debit cards or other banking services provided through an institutionally-controlled process or contracted provider, particularly in view of the costs and fees associated with the use of those cards and services.”

Campus-Based Programs. As part of an ongoing review of its regulations, ED proposes to update and streamline the regulations governing the Federal Perkins Loan, the Federal Supplemental Opportunity Grant, and the Federal Work-Study programs. The agency requests suggestions on ways to improve the operation of these programs.


As usual, ED is asking interested parties to provide testimony at public hearings or submit written comments laying out issues with current regulations and making recommendations for improvements.

Public hearings will be held on May 23 in Phoenix and May 31 in Washington, DC. The notice provides details on testifying. In lieu of testifying, you may submit written comments by May 31.

NACUBO is very interested in hearing your suggestions for improvements to ED regulations and will nominate representatives for the negotiated rulemaking committee. Please share your ideas and concerns with Bryan Dickson or Anne Gross.


Anne Gross
Vice President, Regulatory Affairs

Bryan Dickson
Senior Policy Analyst