Issue Briefs

Deregulation

Regulation and oversight in higher education is important to assuring accountability for federal dollars.  In many cases, however, these requirements do not relate to good stewardship, but are imposed solely by virtue of the fact that federal student aid assistance is provided.  As a result, complying with the ever-growing array of federal requirements has become extremely costly and time-consuming for colleges and universities. For example, the Department of Education’s Consumer Information Disclosures At-a-Glance publication is 37-pages long.  

It is not a question of the good intentions behind these requirements, but rather that they continue to accumulate with no paring back or review of what is already on the books.  Congress should decide what is critical to federal oversight, taxpayers, and higher education consumers, and then limit reporting and related regulatory requirements to those areas. 

About

Each year, new statutory and regulatory requirements are imposed on colleges, adding real costs at a time when institutions are being asked to tighten their belts.  Until recently, general concern about institutional burden has not been sufficient to counter the specific individual concerns of those advocating for particular requirements. 
 

Task Force on the Federal Regulation of Higher Education

Former Senate HELP Committee Chairman Lamar Alexander (R-TN) was interested throughout his career in eliminating many of the outdated or inapplicable regulations impacting institutions of higher education – a process that he deemed “weeding the garden.” Although the legislative vehicle for deregulation remains unclear, Sen. Alexander promised a serious conversation around higher education deregulation as a part of the broader HEA reauthorization process.  It is unclear how his retirement will affect this effort.

To help guide the deregulation effort, a bipartisan group of senators appointed 16 higher education leaders to create the Task Force on the Federal Regulation of Higher Education, which included seven NAICU members. The Task Force published a final report in 2015, focusing on regulatory requirements in the areas of student financial aid, campus security, federal Financial Responsibility Standards, data collection, disclosures, and accreditation.  The report also identified a number of specific requirements that are particularly problematic for institutions.

The Task Force proved useful as the Trump Administration implemented its deregulatory agenda.  
 

Recent Developments

Before taking office, President Trump highlighted the need to reduce unnecessary federal compliance costs imposed on colleges and universities. Subsequently, the president issued an executive order directing federal agencies, including the Department of Education, to take steps to lessen unnecessary regulatory burdens.

In response, the Department created the Regulatory Reform Task Force to review agency regulations and guidance, and to recommend which ones to repeal, modify, or retain. The Department also solicited public comments on policies that should be repealed, replaced, or modified and conducted several public hearings on the subject. In addition, the Task Force, which issued its first progress report in May 2017, identified nearly 400 higher education guidance documents that it deemed to be outdated in its second progress report issued in October 2017.  The Department later announced that it had withdrawn these guidance documents. 

A subsequent executive order required federal agencies to rescind guidance documents that should no longer be in effect and to create a guidance portal containing all current regulations. The Department’s guidance portal remains operational, but the executive order was rescinded by President Biden. 

Under the Trump Administration, the Department also took efforts to rescind or modify regulations and guidance in a number of areas, although some of these changes may have been driven more by an effort to alter policy than ease regulatory burden.  In addition to regulatory changes related to teacher preparation, gainful employment, borrower defense to repayment, and campus sexual assault, the Department conducted negotiated rulemaking to revise numerous regulations governing the Title IV programs. 

After months of debate, the negotiated rulemaking committee reached consensus on numerous changes to rules on accreditation, state authorization of distance education, credit hour definition, competency-based and distance education, TEACH grants, and the eligibility of faith-based institutions to participate in the student aid programs.  In 2021, the Biden Administration launched its own negotiated rulemaking session to rewrite regulations regarding borrower defense to repayment, loan repayment, discharges, and more.

The eventual reauthorization of the Higher Education Act may offer another opportunity to seek relief.  In the past, Republican HEA reauthorization proposals have adopted many of NAICU's recommendations, including provisions that would repeal regulations related to state authorization, state authorization of distance education, and the definition of credit hour.  In contrast, however, Democrats’ recent reauthorization proposals would retain or reinstate many of the regulatory provisions put in place by the Obama Administration.  

  • Contact your Senators and Representative to explain the real impact of over regulation to your institution.  Use specific examples from your campus to make the case.

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