Negotiated
Rulemaking to Implement
1998 Amendments to the
U.S. Higher Education
Act, including the creation
of the Direct Loan Program
U.S. Department of Education,
Office of Postsecondary
Education
Development
of regulations to implement
amendments to Higher Education
Act related to student
loan programs, including
the Federal Family Education
Loan (FFEL), Direct Loan,
and Perkins programs
Susan
Podziba & Associates,
in conjunction with Howard
S. Bellman, mediated a
series of negotiated rulemakings
to establish the Direct
Loan program and to continue
implementation of the
Federal Family Education
Loan (FFEL) and Perkins
Loan programs for the
U.S. Department of Education
(Department). The consensus
processes resulted in
high-quality rules that
reflected the knowledge
and experience of a wide
range of stakeholders.
When Congress
reauthorized the Higher
Education Act (HEA) in
1998, it required the
Department to use negotiated
rulemaking (reg neg) to
develop all its rules
governing the nation’s
student loan programs.
The Department retained
SP&A and Howard S.
Bellman (SP&A/HSB
Team) to design and implement
reg neg processes to develop
the new Direct Loan Program,
which allows students
to borrow directly from
the federal government,
and to revise rules for
the FFEL and Perkins programs.
The reg
neg processes brought
together representatives
of students, legal aid,
bankers, guaranty agencies,
private colleges and universities,
public colleges and universities,
land grant colleges, university
presidents, community
colleges, proprietary
and trade schools, historically
black colleges and universities,
tribal colleges, and publicly
traded colleges. All of
the processes resulted
in consensus regulatory
language, which was used
in the Department’s
Notices of Proposed Rulemaking.
The reg
negs facilitated by the
SP&A/HSB Team resulted
in more-effective rules
because they fostered
an exchange of information
among stakeholders and
an integration of their
perspectives. For example,
the federal negotiator
in one of the reg negs
proposed a method for
collecting certain student
loan information. The
guaranty agencies proposed
an alternative that accomplished
the same data collection
at a significantly lower
cost. After intensive
discussions to vet the
alternative, all negotiators
agreed to it.
