The U.S. Education Department (ED) on Thursday wrapped up its second and final negotiated-rulemaking meeting focused on changes directed by the One Big Beautiful Bill reconciliation law passed this summer.
Despite significant debate around key issues — most notably the definition of a professional student for the purpose of annual and aggregate loan limits — negotiators on the Reimagining and Improving Student Education (RISE) Committee reached consensus on all 17 proposals put before them.
While only 12% of community college students borrow, the American Association of Community Colleges (AACC) watched the negotiations around two key provisions of importance for community colleges: new institutional authority to lower loan maximums by program, and a new provision tying loan maximums to enrollment intensity. Both final proposals closely follow the statute, with few additional requirements or considerations for colleges.
For institutionally determined loan limits, new language was added to clarify that a “program of study” means an eligible program, rather than the credential level. This is to distinguish it from another regulatory proposal put forth by the committee that will define a “program of study” differently for the purpose of determining Parent PLUS loan legacy eligibility.
ED also clarified that the prorating of loans will follow a formula where the reduced annual loan limited percentage will be the number of credit hours enrolled for the term divided by the number of credit hours for full-time enrollment for the term. While current regulations require substantially equal disbursements, ED’s proposal allows an exception for students subject to loan proration where unequal disbursement across semesters will be appropriate. This proposal addressed the key use-case challenge that AACC had heard from financial aid officers at community colleges.
ED will now work to craft a Notice of Proposed Rulemaking (NPRM) before issuing a final rule. Because negotiators reached consensus, the department must closely (if not exactly) follow the proposals agreed to during the negotiated rulemaking. In his comments before the negotiators, Education Under Secretary Nicholas Kent said to expect the NPRM early next year. AACC will respond to the NPRM with formal comments.
Next month, ED will convene a second negotiated-rulemaking panel, called the Accountability in Higher Education and Access through Demand (AHEAD) Committee. It will consider regulations for the remaining higher education changes in the One Big Beautiful Bill Act, including Workforce Pell, the new accountability system based on earnings, and current gainful employment and financial value transparency regulations.
