Key Policy Letters Signed by the Education Secretary or Deputy Secretary
April 17, 2009

April 17, 2009

Honorable Joseph R. Biden, Jr.
President of the Senate
United States Senate
Washington, DC 20510

Dear Mr. President:

I am pleased to submit for your consideration the enclosed legislative proposal, which would limit the application of the requirement to delay the effective date of certain student aid regulations under Title IV of the Higher Education Act of 1965 (20 U.S.C. 1001 et seq., the HEA) to only those regulations that affect the calculation of grant, loan, or work assistance under those programs.  I am sending an identical letter to the Speaker of the House of Representatives.

Currently, section 482(c) of the HEA (20 U.S.C. 1089(c)) provides that regulations implementing the student aid programs under Title IV of the HEA that are published on or before November 1 of a given year do not take effect until July 1 of the next year—a delay of at least eight months after promulgation.  If student aid regulations are published after November 1 of a given year, section 482(c) provides that the regulations do not take effect until July 1 of the second year after that year—a delay of up to nearly 20 months after promulgation. 

In marked contrast, the Administrative Procedure Act (APA) requirements that generally apply to government agencies provide that final regulations normally take effect 30 days after they are promulgated, unless the agency promulgating the regulations specifies a different effective date—usually a later date, but it can be an earlier date in limited circumstances (5 U.S.C. 553(d)).

The enclosed amendment would limit the application of section 482(c) of the HEA to regulations that affect the calculation of grant, loan, or work assistance under the student aid programs.  Section 482(a) of the HEA sets out a "Master Calendar" of deadlines by which the Secretary must perform certain actions relating to the calculation of student aid, such as the development of forms and the allocation of campus-based and Federal Pell Grant funds, with a number of procedural steps assigned specific deadlines.  The delay in the effective date of regulations in section 482(c) is logically related to the Master Calendar requirements in section 482(a), and provides institutions of higher education with sufficient advance notice of the rules that will apply to student aid calculations for the upcoming award year, which begins on July 1.

However, the delayed effective date requirement also constrains the Secretary in regulating the numerous other aspects of the student aid programs for which more prompt action is needed, such as loan collection and guaranty procedures, recognition of accrediting agencies, institutional eligibility and certification, and compliance matters. For example, in 2007, delays in regulatory changes for the Federal Family Education Loan Program relating to prohibited inducements and preferred lender lists prevented the timely implementation of protections for students from improper arrangements between lenders and schools, and of benefits to students from receiving appropriate advice about borrowing.  There is no sound public policy justification that warranted that delay, or the excessive delay that section 482(c) now causes in the implementation of many Title IV regulations.

The delayed effective date requirement also prevents the timely implementation of many substantive legislative changes to the student aid programs that are enacted by Congress to carry out its intent on key policy objectives.  In a recent example, the Higher Education Opportunity Act (HEOA, P.L. 110-315) was signed into law on August 14, 2008.  Without the enclosed amendment, virtually all of the final regulations that will implement the HEOA student aid program changes, which are currently being developed through the required negotiated rulemaking process, will not take effect until July 1, 2010—nearly two years later.

In addition to delaying regulatory action, the delayed effective date requirement unduly compresses the rulemaking process, and consequently the opportunity for public comment.  The APA requires agencies to solicit public comments on proposed regulations.  Due to the Master Calendar requirements, the Department of Education normally seeks comment for only 30 days, instead of the customary 60-day comment period. 

While the legislative proposal would allow the Secretary to act more quickly, it would also generally afford a greater opportunity to provide additional time to carry out the APA’s notice-and-comment procedures.  This in turn would allow for a thorough analysis of regulatory options, meaningful public comments, and a careful assessment and response to those comments.  By eliminating a constraint on stakeholder involvement, the proposal would help the Department advance the Administration’s efforts to promote greater transparency, agency accountability, and public engagement.

The enclosed amendment would enable the Secretary to provide both a more rapid regulatory response and generally longer public comment periods, consistent with the APA, on a variety of student aid program issues, while preserving the existing regulatory schedule as it relates to the Master Calendar and the calculation of student aid under that schedule.  Like other agencies, the Department would retain the discretion to adopt a later effective date for regulations that would require, or benefit from, a period of more than 30 days for implementation.

The amendment would foster greater accountability in the student aid programs through the timely application of needed regulatory revisions and the opportunity for more robust public involvement in the rulemaking process, and enable the Secretary to implement key legislative changes more quickly.  I urge prompt and favorable consideration of the amendment.

The Office of Management and Budget advises that there is no objection to the submission of this proposal to the Congress.

  Arne Duncan



SEC. ___.  (a)  LIMITATION OF DELAY TO REGULATIONS AFFECTING CALCULATION OF STUDENT AID.—Section 482(c) of the Higher Education Act of 1965 (20 U.S.C. 1089(c)) is amended—

(1)  in paragraph (1), by striking "the programs under this title" and inserting "the calculation of grant, loan, or work assistance to students or parents under the student aid programs authorized by this title"; and

(2)  in paragraph (2)(A), by striking "the programs under this title" and inserting "the calculation of grant, loan, or work assistance to students or parents under the student aid programs authorized by this title".

(b)  EFFECTIVE DATE.—The amendments made by subsection (a) shall be effective on enactment.

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Last Modified: 07/24/2009