Negotiated
Rulemaking
Presented at EASFAA May 2013
by Janice Dorian, Betsy Hicks and Eileen O’Leary
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What we hope you will learn today
• What negotiated rulemaking is and how the process works
• What our experiences with negotiated rulemaking have been
• How and why you should participate
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Definition of negotiated rulemaking
• Known colloquially as “neg reg”
• A process in American administrative law used by federal
agencies in which representatives from a government agency
work to develop regulations in collaboration with significantly
affected parties
• An alternative to traditional rulemaking which only allows for
public input after the Notice of Proposed Rulemaking (NPRM)
is published
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Origins of negotiated rulemaking
• Emerged as a concept in the late 1970’s and as a potential
solution to traditional rulemaking in the early 1980’s
• First federal agencies to experiment were Environmental
Protection Agency (vehicle emissions and pesticide
regulations) and Department of Transportation (flight and
duty time regulations for airline flight crews)
• Other agencies were reluctant to use it out of concern for its
legality until Congress enacted the Negotiated Rulemaking Act
of 1990, which was reauthorized in 1996 and then
incorporated into the Administrative Procedures Act
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History of negotiated rulemaking for
Title IV programs
• The HEA Amendments of 1992 mandated negotiated
rulemaking for Title IV programs as well as public hearings to
obtain input on issues to be negotiated
• ED began implementation of negotiated rulemaking within
weeks after President Bush signed the bill
• First negotiations were held in January 1993 and the issues
centered on the program integrity triad
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Overview of process
• Publish notice of intent to regulate, including issues
• Obtain feedback on issues through public hearings and
solicitation of written feedback
• Select negotiators
• Convene meetings for negotiators
• Publish Notice of Proposed Rulemaking (NPRM)
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• Publish Final Regulations
Selection of negotiators
• Notice in the Federal Register (issues, schedule, solicitation of
nominations)
• Typical number of non-federal negotiators on committee consists of
12-15 seats (with primary and alternate for each seat)
• Individuals are nominated, or nominate themselves, and include
information on: constituency to be represented, expertise and
experience in issues to be negotiated, evidence of support from
constituency, and commitment to participate in good faith
• ED selects committee members that reflect diversity in industry
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Negotiations
• Typically three meetings, of three to five days each, held at a
monthly interval
• Facilitated by a neutral third-party
• First meeting: adopt protocols, finalize committee members, finalize
agenda, orientation to issues
• Second meeting: begin negotiations, reach tentative agreement on
each issue separately, including regulatory and preamble language
• Third meeting: continue with negotiations, reach tentative
agreement on each issue separately, including regulatory and
preamble language, and reach consensus on all issues
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Rules of engagement
• Consensus means unanimous concurrence among committee
members on all issues being negotiated
• Absence or silence equates with no dissent
• All agreements are tentative until all of the issues are
considered
• Members may not withdraw their consensus once given
• ED uses consensus-based regulatory language in its NPRM and
negotiators and those persons and entities whom they
represent may not comment negatively
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Consequences of not reaching
consensus
• ED determines whether to proceed with regulations
• If proceeds, may use regulatory language developed during
the negotiations as the basis for its NPRM, or develop new
regulatory language for all or a portion of its NPRM
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Publish regulations
Publish NPRM in the Federal Register
Publish Final Regulations in the
Federal Register
• Regulatory language
• Summary of comments
• Preamble language
• ED’s response to comments
• Request for public comments with
deadline
• Explanation of any changes made to
the regulations that differ from
proposed regulations
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Why each negotiated rulemaking
process is unique
• Negotiation is intrinsically a process that cannot be specified
entirely in advance
• What works in a particular case depends on a number of
factors such as:
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Substantive issues
Perception of agency’s position by affected parties
Authority of party representatives in negotiations
Negotiating style of the representatives
Divergence of view within each constituency represented
Skill of agency personnel
Skill of mediator
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Characteristics of successful negotiated
rulemakings
• All interest groups, including the regulatory body, must be
represented at the negotiating table by persons of sufficient
authority to make decisions
• Shared vision among committee members that a negotiated
rule is preferable to a rule developed under traditional
processes
• Balance of power among the parties, including the regulatory
agency
• Active mediator involved in the actual negotiation, helping the
parties agree by narrowing their substantive differences
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Characteristics of successful negotiated
rulemakings
• Appropriate use of caucuses to resolve conflicting interests and/or
agree on a negotiating strategy
• Use of work groups to prepare proposals for the committee as a
whole
• Issues must be ripe for resolution and sufficiently multifarious to
allow trade-offs
• Opportunity for mutual gain, that is “win-win” bargaining
• Definitive deadline
• Lots of unhealthy snack food
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Eileen’s experiences
• Primary negotiator in 2006-2007 Negotiated Rulemaking on
Student Loan Issues
• Primary negotiator in 2008 Negotiated Rulemaking on Student
Loan Issues
• Nominated both times by
• Senator Edward Kennedy
• National Direct Student Loan Coalition
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2006-2007 Neg Reg Participants
Constituency
Students
Negotiators
Jennifer Pae, United States Student Association
Alternate: Luke Swarthout, State Public Interest Research Groups
Legal Assistance Organizations
Deanne Loonin, National Consumer Law Center
Guaranty Agencies
Scott Giles, Vermont Student Assistance Corporation
Alternate: Rachael Lohman, Pennsylvania Higher Education Assistance Agency
Lenders
Tom Levandowski, Wachovia Corporation
Alternate: Ms. Lee Woods, Chase Education Finance
Phil Van Horn, Wyoming Student Loan Corporation
Alternate: Robert L. Zier, Indiana Secondary Market for Education Loans
Secondary Markets
Loan Servicers
Guaranty Agency Servicers
Institutions of Higher Education
Perkins Loans Schools
Direct Loans Schools
Public Two-Year
Public Four-Year
Private Four-Year
Proprietary
HBCUs
Robert Sommer, Sallie Mae
Alternate: Wanda Hall, EdFinancial Services
Richard George, Great Lakes Higher Education Guaranty Corporation
Alternate: Gene Hutchins, New Jersey Higher Education Student Assistance Authority
Alisa Abadinsky, University of Illinois at Chicago
Alternate: Karen Fooks, University of Florida
Eileen O'Leary, Stonehill College
Alternate: Christine W. McGuire, Boston University
Darrel Hammon, Laramie Community College
Alternate: Kenneth L. Whitehurst, North Carolina Community Colleges
Pamela W. Fowler, University of Michigan
Alternate: Patricia McClug, University of Wyoming
Elizabeth Hicks, Massachusetts Institute of Technology
Alternate: Ellen Frishberg, Johns Hopkins University
Jeff Arthur, ECPI College of Technology
Alternate: Robert Collins, Apollo Group, Incorporated
Shari Crittendon, United Negro College Fund
Alternate: Dr. N. Joyce Payne, National Association of State Universities and Land Grant Colleges
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Topics for 2006-2007 Neg Reg
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Entrance Counseling for Grad/Professional GPLUS Borrowers
Loan Discharge requirements in cases of Identity Theft
Use of Preferred Lenders
Prohibited Inducements
Eligible Lender Trustees (ELT’s)
Frequency of Capitalization of Interest
Maximum Length of Loan Periods
Economic Hardship Repayment Options
Income Contingent Repayment Formula & Family Size
Retention of Disbursement Records (MPN)
Certification of E-Signatures on MPNs assigned to Dept. of ED
Use of “True & Exact Copy” of death certificates for discharge
Retroactive charge for the permanently & totally disabled
NSLDS Reporting Timeframes and Requirements
Assignment of defaulted Perkins Loans
Definition of “Reasonable and Affordable” collection costs
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Final consensus was reached!
2008 Neg Reg Participants:
Community of Interests
Students
Primary Negotiator
Luke Swarthout
Alternate Negotiator
Rebecca Thompson
Grad/Prof Students
Carrie Steere-Salazar
Radhika Miller
Legal Aid
Deanne Loonin
Lauren Saunders
4-year Public Institutions
Allison Jones
Anna Griswold
4-year Private Institutions
Eileen O’Leary
Kathleen Koch
2&4 yr Public Institutions
George Chin
John Curtice
For-Profit Institutions
Mark Pelesh
Tammy Halligan
Lenders, For-Profit
Tom Levandowski
Walter Balmas
Lenders, Not-For-Profit
Scott Giles
Phil Van Horn
Guaranty Agencies
Gene Hutchins
Dick George
Servicers
Wanda Hall
Rob Sommers
Collection Agencies
Martin Darnian
Carl Perry
Associations
Anne Gross
Larry Zaglaniczny
Department of Education
Dan Madzelan
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Topics for 2008 Neg Reg
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Income Based Repayment rules
Economic Hardship Deferment in IBR
Loan Rehabilitation
Repayment plan
Public Service Loan Forgiveness
Definition of a Not for Profit Holder
HEROES waivers and benefits coordination
Federal Preemption of State Law related to Improper Inducements
and School as Lender Arrangements
• Final consensus was reached on April 14, 2008, 5:50 p.m. EST, on all
issues of the proposed regulations for loan issues regarding
implementation of the College Cost Reduction and Access Act of
2007.
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Janice’s experiences
Represented proprietary as the primary negotiator for two
negotiated rulemakings sessions.
• William D. Ford Direct Loan Program: January 1994 through
July 1994
• Re-Authorization of the Higher Education Act of 1968: January
1999 through July 1999.
Numerous Sessions as assisting the Primary and Alternate
Negotiator during and between Sessions. Topics ranged from
Loans, Re-authorization , and most recently Program Integrity
including the Accreditation, State Authorization and Gainful
Employment.
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Betsy’s experiences
• Four negotiated rulemakings, exclusively on loan issues, over a
twenty year period
• Represented four year privates – three times as the primary
negotiator and once as the alternate
• Two sessions ended with consensus, two did not
• As Deputy Assistant Secretary for Student Financial Assistance
Programs from 1995-1998 responsible for overseeing
negotiated rulemaking
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How to Participate
1.
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Read the Notice of Proposed Rulemaking (NPRM)
Send comments on any issues of concern or agreement to
address listed in NPRM
Attend one of the announced hearings on the NPRM that are held
around the country
 Speak publically at the hearing or
 Submit written testimony only at the hearing
 Or simply go to listen and learn
4.
Volunteer to be a Negotiator
 Send letter to ask to be a negotiator to person/address listed in
NPRM
 Seek endorsements in support of your request from others, eg., your
college president, your senator or congressman, from another
organization like EASFAA
3. If selected, attend and participate in Neg Reg (at your
institution’s expense)
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Why Participate
• Fascinating experience
• Great resume builder
• Good networking opportunity
Eileen’s philosophy:
S/he who does not participate in the
process, forfeits the right to complain
about the results!
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