Program Integrity Rulemaking to Be Delayed
9/08/2014
The Department of Education has run out of time to issue rules this fall stemming from its recent Program Integrity and Improvement negotiated rulemaking sessions. By law, ED must issue rules under Title IV of the Higher Education Act no later than November 1 in order for them to take effect the following July 1. The two months remaining before this year's deadline do not provide sufficient time to release a proposed rule, provide time for public comments, and issue a final rule. ED sources confirm that the complexity of the state authorization and cash management issues, coupled with a crowded rulemaking pipeline, pushed the rules to the backburner over the summer.
ED is expected to meet the November 1 deadline for final rules on gainful employment programs and to implement the Violence Against Women Act. In addition, changes to ED's regulations on adverse credit history for parent PLUS loans (one of six issues considered by the Program Integrity and Improvement negotiators) will likely be finalized this fall. NACUBO expects the department to then turn its focus to the Program Integrity and Improvement rulemaking. The earliest the regulations could then take effect would be July 1, 2016.
Lobbying and Public Relations Efforts Continue
Over the summer, interested parties continued to advocate their positions on potential changes to ED's cash management rules addressing relationships between colleges and universities and financial institutions involving student accounts. Here is a sampling of this activity:
- Consumer Reports issued a publication in late August titled Campus Banking Products: College Students Face Hurdles to Accessing Clear Information and Accounts that Meet Their Needs. Cost comparisons for 16 campus banking options are included.
- The Consumer Financial Protection Bureau (CFPB) sent letters to universities in the Big Ten Conference expressing concern over the failure of their banking partners to post copies of contracts on their websites. A subsequent CFPB blogpost, "Alerting Colleges about Secret Banking Contracts," reiterated these complaints.
- A Senate Banking Committee hearing on July 31 included testimony from a U.S. PIRG representative based on the organization's 2012 report on campus debit cards which kicked off the controversy.
- Associations representing banks and card providers succeeded in getting members of Congress to weigh in with ED (here and here). Consumer groups did the same last spring.
