Committee III
Refunds, Program and Student Eligibility Issues

Fifth and Sixth Meetings
May 24-26 and June 8, 1999
Washington, DC

The fifth meeting of Committee III commenced as scheduled at approximately 9:00 a.m. on Monday, May 24, 1999, and adjourned on Wednesday, May 26, 1999, at approximately 2:30 p.m. The meeting was held at the Department of Education offices in Federal Building Six. The meeting was facilitated by and this report was written by Greg Bourne and Greg Sobel.

The meeting began with the facilitators and spokespersons introducing themselves. Next the facilitators provided an overview of activities since the last meeting and the proposed agenda for this meeting. The Draft Meeting #4 Summary was approved without substantive change, although three typographical errors were corrected.

The Committee then turned to the primary purpose of the meeting -- to respond to draft negotiating text and related materials prepared by the Department and other Committee members since the last meeting. Acknowledging the tentative agreements reached at previous meetings, the Committee focused on those few remaining areas where tentative agreement had not yet been reached.

Attachment I summarizes the major outcomes from the discussions of the draft negotiating text. Where agreement was reached on either new language or deletions from existing regulatory language, these are noted. If agreements were contingent on the refinement of proposed language or the resolution of outstanding concerns, the remaining issues are highlighted.

The Committee acknowledged that the provisions requiring the most attention related to the Return of Title IV Aid. Committee members decided that after a preliminary discussion of these provisions, they would seek final consensus first on all remaining provisions. If successful, they could devote the rest of the meeting to the Return of Title IV aid.

Following this strategy, the Committee proceeded with the preliminary discussion of the Return of Title IV Aid provisions. The Committee then turned its attention to the remaining provisions. After discussing and refining the proposed language for each of the remaining provisions on which tentative agreement had not yet been reached, final consensus was achieved on all provisions except those addressing Return of Title IV Aid. The refinements in the draft negotiating text, and the language that will be contained in the final agreements, are included in Attachment I.

The discussions then returned to Return of Title IV Aid. Several issues were highlighted. It was reported that a small work group trying to reconcile differing perspectives on issues related to subsection (f) Percentage of Payment Period or Period of Enrollment Completed had reached a tentative agreement. This was presented to the entire Committee for approval and tentative consensus was reached on this matter.

After considerable discussion, tentative agreement was reached on all but three other sections of Return of Title IV Aid provisions. They were: (c) -- the withdrawal date for a student at an institution not required to take attendance; (h) -- the aspects of this provision dealing with student retention of 50% of the grant aid he or she would have otherwise been required to return; and the treatment of undisbursed aid, that is, aid that could have been but was not disbursed at the time the student withdrew. This third provision relates to ensuring consistency between the Department's draft worksheet and the regulations concerning the Return of Title IV Aid.

As the meeting drew to a close, it was clear that the group was not prepared to reach final consensus on these three provisions. On the other hand, the Committee believed that with a little more time at least two of these could be resolved. The Return of Title IV Aid provisions were new and complex and simply needed additional attention. (Significant disagreement in principle seemed likely to prevent consensus on (h)(2)(ii), the 50% grant retention; nonetheless this could be explored further as well.)

After extending the meeting time to 2:30 on Wednesday May 28th in an effort to bring closure on the outstanding issues, the Committee considered and approved a recommendation to continue with a one day meeting on June 8. Ideally, this would allow sufficient time to work through the remaining provisions while still maintaining the acceptable timeframe for the Department to promulgate draft regulations. Two workgroups were established to help resolve the issues concerning (c) and the undisbursed aid/worksheet. These workgroups were to try to develop consensus on recommendations for the entire Committee to consider on June 8.

On Tuesday, June 8 the Committee re-convened to hear the reports from the workgroups and, if possible, reach consensus on the remaining provisions. The meeting was held in the auditorium at the Department of Education offices in Federal Building Six located at 400 Maryland Avenue, S.W.

Prior to the meeting, some members of the Committee met to consider issues related to provision (g), including use of payment period versus period of enrollment with respect to the application of the concept of "incurred" institutional charges. These issues are directly related to the worksheet and regulations that guide the use of the worksheet. The outcome of these discussions was a commitment from the Department to continue to work with those concerned about these provisions as the worksheet and related issues are clarified.

The first topic of discussion at the Committee meeting was the report by the workgroup refining the worksheet and reconciling it with the regulations relevant to undisbursed aid. The group reported good progress and suggested modifications of some regulatory language to reflect the modified worksheet. The workgroup also acknowledged that while it had reached tentative agreements, additional work was also required to test some additional circumstances.

Upon completing the presentation and ensuing discussion, the Committee reached tentative consensus on both the regulatory changes recommended as well as how to proceed with resolving the remaining issues. The workgroup will continue to work with the Department to assure the worksheet handles anticipated circumstances. In addition, all members of the Committee, via the listserve, will be able to comment before the Department finalizes the worksheet.

The discussion then turned to subsection (c) of the Return of Title IV Aid provisions. A small work group met subsequent to the May 24-26 session and agreed on an acceptable solution for a circumstance not envisioned by the Congress in the statute, specifically, that an individual student could legitimately have two "official" withdrawal dates. This solution was presented to the full Committee. After listening to the concerns and issues expressed by the Committee, the Department suggested a "package" of trade-offs to deal with their own and the other Committee members' concerns. Several members of the Committee, including some work group members, raised additional concerns about the language and intent of (c). The Department then suggested that the entire Return of Title IV Aid provisions be considered as a whole since numerous trade-offs had been made during earlier deliberations and that the entire section needed to hold together with the one exception described earlier, (h)(3)(ii) (formerly (h)(2)(ii)).

After additional discussion about both the substance of the regulations and the process for reaching final consensus, the facilitator called for final consensus on the complete package (Return of Title IV Aid provisions) minus (h)(3)(ii) as had been proposed. Four members of the Committee withheld consensus.

A brief meeting was held between the facilitator, those who could not agree with the proposed language and representatives of the Department. It was clarified that those who withheld consensus could not agree with two key provisions as presented: the 14-day time period proposed as an alternative to "the earlier of" language in the previous draft (to deal with special circumstances not envisioned by the statute) and lack of provisions for a student to rescind the decision to withdraw.

A proposal was then presented to the full Committee to allow an additional 48 hour period to try to work through these two remaining issues. By Friday June 11, if agreement could be reached by the workgroup re-established to address the two issues, proposed language would be circulated on the listserve. Members of the Committee then had until the close of business on Monday, June 14 to respond either positively or negatively to the proposed language. (Any Committee member who did not respond by the close of business Friday, June 11 that they had received the listserve message was called by the Department.) If everyone concurred with the proposed modifications, the Committee would have full consensus on every Return of Title IV Aid provision except (h)(3)(ii).

After responding to questions of clarification, the Committee agreed with the proposal. It was understood that if the workgroup was not successful, or other members of the Committee dissented, there would be no consensus on the entire Return of Title IV Aid package. Under this condition, the Secretary of the Department would write the draft regulations and the Committee members would be free to comment on these provisions as specified in the protocols.

After considerable effort, however, the workgroup reached tentative agreement and reported this to the entire Committee on Friday, June 11. The draft language was provided, as promised, to all Committee members via listserve. On Tuesday, June 15 the Department reported that no Committee member had registered dissent. This means full consensus was achieved on all provisions considered by Committee III except Return of Title IV Aid provision (h)(3)(ii).

This meeting summary serves as the final documentation of the regulatory negotiation process for Committee III and the issues it addressed related to the Higher Education Act Amendments of 1998.

ATTACHMENT I

Final agreements on Committee III negotiating text, listed by section of regulations, based on documents and discussions dated May 24-26, 1999. Documents and discussions dated June 8, 1999, serve as the basis for Return of Title IV Aid provisions. All tentative agreements from previous meetings were adopted as part of the final consensus unless otherwise noted.

Federal Pell Grant Program Provisions

The Committee agreed with the draft May 24-26 text on Sections 668.32, 690.6 and 690.7 as presented.

Campus-Based Programs Common Provisions

The Committee agreed with the draft May 24-26 text on Sections 674.10, 675.10, 676.10 and 673.5 as presented.

Federal Supplemental Educational Opportunity Grant Program Provisions

The Committee agreed with the draft May 24-26 text on Section 676.18 as presented.

Federal Work-Study Program Provisions

The Committee agreed with the draft May 24-26 text on Section 675 with the following modifications:

Section 675.16 Payments to Students

Under (a)(2), change "...., the institution must notify him or her of the amount..." to "..., the institution must notify the student...".

Also under (a)(2), change "...the FWS wages will be paid." to " the FWS compensation will be paid."

Also related to (a)(2), the preamble should clarify that the "award period" noted refers to the FWS award period.

Under (a)(7), the word "immediately" will be deleted from the phrase "the institution must immediately pay the credit balance..."

Under (a)(8)(iii), the Department will consider changing "...the student's final FWS payroll period..." to "...the institution's FWS payroll period..."

Under (a)(10), "...compensation are..." will be replaced with "...compensation is..."

Student Eligibility for Federal Financial Aid

The Committee agreed with draft May 24-26 text on Sections 668.32, 668.38 and 668.40 as presented.

Return of Title IV Aid

The Committee agreed with the draft June 8 text on these provisions, Section 668.22, with the following changes and suggestions:

1. (a)(1) -- the Committee agreed to move the underlined phrase "when an institution....or the aggregate method" to the end of the sentence.
2. a)(2) -- the Committee agreed to replace "..., as of the student's withdrawal date." with "..., as of the date the institution determined that the student withdrew."
3. (a)(2)(ii) -- the Committee discussed following the language contained in section (l) on page 10 of 17 for consistency. The Department believes, however, that late disbursements have meaning only when the amount earned by the student exceeds the amount disbursed. Section (a)(2)(ii) references circumstances when the amount earned is less than the amount disbursed so no additional disbursements are necessary, therefore the proposed change is not necessary.
4. (a)(3) -- the Committee agreed to replace "..., as of the student's withdrawal date." with "..., as of the date the institution determined that the student withdrew."
5. (a)(4)(i)(A) -- the Committee agreed that the reference to Section 668.164(d) should be clarified by adding 668.164(d)(1), (d)(2)(i), and (d)(3).
6. (a)(4)(iii) -- the Committee concurred with changing the term "earned" before grant funds and loan funds to some other modifier to be determined by the Department.
7. (c) -- the Committee agreed with the proposed text contained in the June 11 listserve announcement pertaining to this subsection.
8. (d)(4)(iii) -- the Committee agreed to consider whether a cross-reference to the appropriate sections considered by Committee IV should be added. (After the meeting, the Department discovered that Committee IV had previously cross-referenced Committee III related to these matters; therefore no cross-referencing will occur here.)
9. (e)(4) -- the Committee agreed to replace "..., as of the student's withdrawal date." with "..., as of the date the institution determined that the student withdrew."
10. (g)(1)(ii) -- the Committee agreed that the preamble should clarify what is meant by "incurred."
11. (h)(3)(ii) -- the Committee agreed to disagree on this provision. This is the sole provision considered by Committee III on which consensus was not reached. As such, the Department will use language developed by the Secretary and Committee members are free to comment negatively on the treatment of this single provision.
12. (a)(3)(i)(A) -- the Committee agreed that the preamble should reference the cash management regulations to assure consistency (from the May 24-26 meeting). Note that the reference in the June 8 draft is (a)(4)(i)(A).

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