Washington Watch: Prepare for major ED regulatory changes


The U.S. Education Department (ED) has announced a series of forthcoming regulatory activities that will have a tremendous impact on community colleges and their students, and it is hard to overstate their potential reach. Because Congress is extraordinarily unlikely to act in these areas, ED will have the final say over the regulations’ content.

ED announced its plans through its Fall Regulatory Agenda, which outlines the department’s forthcoming actions on final and proposed rules, as well as its intention to engage in “negotiated rulemaking” in several key areas.

Final rules

ED intends to publish a final rule on Title IX in May. The American Association of Community Colleges (AACC) has been deeply involved in this issue for years, both on the legislative and regulatory fronts. The association submitted comments on ED’s June 2022 proposed rule in this area and endorsed broader comments developed by the American Council on Education on behalf of all of higher education. Whatever its ultimate form, the new regulation will almost certainly require major changes from the current rules, and likely entail more campus personnel being involved in Title IX compliance. May is widely seen as a very ambitious target for this regulation because ED received approximately 250,000 written comments. Most observers expect that it will take longer to issue a final rule.

ED also plans to issue a final rule on employer eligibility for the Public Service Loan Forgiveness program. This program has been given a jump start by the Biden administration, after being used only to a limited extent under former President Donald Trump. Also, new final rules on audits and related procedures are scheduled.

Proposed rules

ED also will issue formal “Notices of Proposed Rulemaking” (NPRM) in several key areas. In several cases, these proposed rules were subject to negotiated rulemaking in early 2022, at which community colleges were represented by Anne Kress, president of Northern Virginia Community College, and Will Durden, director of basic education for adults at Washington State Board of Community and Technical Colleges.

Foremost among the proposed rules will be gainful employment, which determines eligibility for all Title IV-eligible certificate programs, and previously entailed substantial administrative costs for colleges. These regulations, controversial since first proposed by President Barack Obama in 2009, did not gain consensus in the negotiated rulemaking sessions and will surely be subject to heated discussions when released. 

Proposed rules are also forthcoming on the certification procedures and standards of administrative capability used to determine Title IV institutional eligibility. These carry with them a host of requirements on campus operations and even academic program structure. These did not garner consensus in the negotiated rulemaking sessions. In addition, ED is planning to promulgate an NPRM on Ability-to-Benefit that did get agreement at the negotiated-rulemaking table, and is likely to be finalized as proposed, or in very similar form. 

Income-based repayment

The department also plans to release a proposed rule outlining new terms and conditions for income-driven repayment. These were announced last August in conjunction with Biden’s loan cancellation plans. As proposed, the plan would dramatically reduce repayments and their length for millions of borrowers, including low-balance community college borrowers. Therefore, AACC is eagerly anticipating this release.

New items subject to negotiated rulemaking

Finally, ED is planning to convene negotiated rulemaking committees on a diverse and consequential set of topics. The Higher Education Act requires that negotiated rulemaking occur before any Title IV regulations are proposed. Topics set for “neg reg” include: accreditation (where the Biden administration has already issued important guidance), distance education, state authorization (an issue of growing complexity given the growth of online education offerings), cash management, and, in a highly technical but critical area for community colleges, “Return of Title IV Funds.” This last item governs the funds that must be returned to the government when a student does not complete a period of enrollment.

Fair Labor Standards Act

Also, at the Department of Labor, an NPRM is slated for May 2023 that would review the current overtime regulations delineating who is a bona fide “executive, administrative or professional” employee and therefore exempt from the Fair Labor Standard Act’s minimum wage and overtime requirements. AACC has formally communicated its views about the potential negative effect on community colleges of a significant increase in the annual income level below which an employee could not be considered exempt. In 2017, Obama administration regulations in this area were thrown out in U.S. District court. 

AACC action

Clearly, AACC is going to be busy in 2023 at the regulatory level as well as in the halls of Congress. AACC will be advancing nominations for community colleges to be represented on the forthcoming ED negotiated-rulemaking panels and submitting formal comments on the proposed regulations when they are released. We will keep you informed of the many important developments. 

About the Author

David Baime
David Baime is senior vice president for government relations at the American Association of Community Colleges.
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