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Summary of Regulatory Process
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Department of Education
Financial Responsibility Regulation

Summary of Regulatory Process

The Department has worked extremely hard to involve the higher education community in the regulatory process with respect to the financial responsibility regulation. The Department originally published a Notice of Proposed Rulemaking (NPRM) in September 1996, but decided to postpone issuing final regulations on the bulk of the NPRM until after December 1, the statutorily-mandated deadline to release regulations in time for the ensuing academic year. Instead, the Department extended the public comment period on the financial responsibility NPRM three different times until April, 1997 -- an additional 117 days. In response, the Department received a total of approximately 850 comments during the original and extended comment period.

During the time the comment period remained open, the Department engaged the community to submit questions, suggestions, and other comments regarding the proposed ratio standards. Specifically, the Department held meetings with more than 20 representatives of higher education associations on February 5 and March 11, 1997, with 9 representatives of proprietary institutions on February 27, 1997, and with 4 representatives of public institutions on April 4, 1997. The Department also conducted a number of other meetings with parties representing individual institutions or groups of institutions. In addition, the Department published on the Department's Office of Postsecondary Education World-Wide Web site, minutes of the meetings with the higher education associations and proprietary institutions, the details of possible changes to the proposed ratio methodology under review, and the results of some empirical studies, for purposes of public consideration and comment. The Department also made KPMG's original report on the proposed ratio methodology available for viewing on-line.

Many comments received by the Secretary expressed appreciation for the deliberative nature of the process and for the opportunities for public and community involvement. The following are brief excerpts from comments received by the higher education community.

"We applaud the Secretary's willingness to have senior officials of the Department participate in direct conversations with higher education representatives about financial responsibility... These discussions, under the leadership of Jamienne Studley and David Longanecker, have been very useful. They should serve as a model for future efforts to regulate complex and uncertain issues like this one... We appreciate this opportunity to comment again on these proposed rules, and we repeat our appreciation for the openness and care that have marked the Secretary's handling of this complex and important set of regulations."

---David Warren, President, National Association of
Independent Colleges and Universities (NAICU),
April 14, 1997

"NACUBO is encouraged by the process that the Department has used in recent months to consider comments that were filed during the original comment period on the notice of proposed rulemaking (NPRM) and explore possible improvements to the proposed standards. NACUBO appreciates the efforts of ED staff to broaden their understanding of the concerns of the higher education community and improve the empirical data on which decisions are based. We thank you for the opportunity to participate in these worthwhile discussions."

--Christine E. Larger, Director, Public Policy and Management Programs, National Association of College and University Business Officers (NACUBO),
April 14, 1997

"...The inclusive process through which the Secretary has consulted with the community on this proposed regulation has been a model which we will be pleased to see become the norm. The Departmental officials who have worked on this rulemaking have exhibited a real desire to listen and respond to the concerns of those who will be regulated by it. The several extensions in the comment period were very helpful in allowing us to have additional time for input as the Department refined its proposals. CCA submits this comment in the same spirit of collaborative discussion which has proven to be so productive to this point."

---Omer Waddles, President, Career College Association (CCA),
April 14, 1997

"...Let me congratulate all members of the department for their openness and forthright manner in which this comment procedure has been conducted. I personally have found the Department's willingness to hear from the various sectors of the industry to be both refreshing and enlightening. Hopefully the Department's representatives have also found the comments made by me and my fellow participants to be helpful in creating a framework to properly evaluate the financial stability of Title IV participating schools. I would hope that the success of this approach to rule-making will be the vanguard of similar efforts in the future."

---R. Michael Harter, Chairman and CEO, Tulsa Welding School,
April 14, 1997

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Last Modified: 09/06/2004