Rule-Making Panel Fails To Find Consensus On 2 Key Issues

Career College Central summary:

  • The federally appointed negotiators who have been working since February on a package of proposed consumer-protection regulations for the U.S. Department of Education failed to reach consensus on this week. That means any actions on new rules—covering such matters as college-sponsored bank cards, the terms under which PLUS loans can be denied, and requirements for colleges that operate distance-education programs beyond their own state borders to receive specific authorization from other states—will be left to the discretion of the department to develop or not.
  • Had the negotiators reached agreement on all of those matters, and three less-controversial issues also discussed during the latest round of negotiated rule-making, the department would have been bound by their agreement.
  • On Monday the parties did find common ground on the PLUS-loans issue. But two big sticking points left them divided on Tuesday: state authorization and bank cards. On state authorization, the department and several negotiators representing student and consumer groups remained insistent that distance-education programs could be eligible for federal student aid only if they were approved by a state with an "active process" for authorizing them—a process that went beyond passively approving programs merely if they were accredited or had been operating in the state for a long time.
  • "We’re not willing to walk away" from that position, said Pam Moran, representing the department. The department said it wouldn’t dictate specifically what such an "active process" must entail but would suggest in a preamble that it might include such criteria as a review of the institution’s financial viability and its student-refund policy.

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