The same day in June that the U.S. Supreme Court delivered a fatal blow to President Joe Biden’s mass student loan forgiveness plan, his administration dropped its own bombshell: it wasn’t done.
U.S. Department of Education officials said they would attempt loan cancellation through another route, a regulatory proceeding known as negotiated rulemaking. For a broad contingent of the public, the two words had little meaning.
For many higher ed policy pundits, they were cause for head-banging levels of frustration.
That’s because negotiated rulemaking, to say the least, can be an intensive, prolonged process. It brings together negotiators to hash out minute policy details of potential regulations, with the goal of participants reaching consensus. If they don’t, the Education Department can issue its own rule after all.
Here, we explain how negotiated rulemaking works and how it will look in the context of the Biden administration’s newest loan cancellation effort.
What is negotiated rulemaking?
Negotiated rulemaking — formally known as regulatory negotiation, or unaffectionately, “neg-reg” — is a process many federal agencies use to devise rules, which carry the force of law.
An agency undergoing negotiated rulemaking will call together a committee representing groups who would be affected by regulatory changes, typically no more than 25 people.
These committee members represent different factions of industry. The public nominates negotiators to represent the different groups, and an agency will pick them.
For the student loan-related rule, the Education Department is pulling in a few borrowers, an admissions executive and a college president, among others.
Those people then will gather, usually in some generic Washington, D.C. conference room, to try to find consensus on policy intricacies, often for hours on end. The group will continue debating, even if just a single person dissents on a policy point.
This explains why the process is deeply time intensive. Negotiators may be particularly opinionated or have to work through controversial topics — like student loan forgiveness.
How long does it take?
Negotiating committees typically meet in three sessions, each of which lasts a couple of days.
For the new neg-reg initiative, the Education Department has scheduled sessions for Oct. 10-11, Nov. 6-7, and Dec. 11-12.
Negotiators finish their work by submitting a proposal to the agency, indicating where they could or could not agree, or found partial consensus.
Agencies can then move forward with the rest of the regulatory process. That’s time-consuming, too, requiring that they publish a draft rule, seek public comment on it, and respond to that feedback in issuing a final regulation.
Thus, a rule created through neg-reg is highly unlikely to be finished for more than a year. In the case of the student loan rule, Biden might not even be in office when the work concludes.
Does neg-reg work?
One commonly cited benefit of negotiated rulemaking is giving the public a greater look into behind-the-scenes policymaking than just submitting a comment on a regulation. The Education Department livestreams committee meetings for the public.
It also is intended to produce more palatable rules for industry leaders — by including some of them in the process.
But critics aren’t convinced negotiated rulemaking is always worth the time it takes. For one, if the neg-reg committee can’t find agreement, then a federal agency can publish its own rule. If the committee does reach consensus, an agency usually must follow its wishes .
However, an agency can alter a final rule however it wants, so long as it receives a public comment about the provision it’s changing.
The process can also be slanted. Presidential administrations have come under fire for stocking committees with individuals holding views similar to their own.
The Trump administration, for instance, was accused of not giving negotiating committees enough time to complete their work and installing them with disparate enough voices so that they could not find common ground.
By sabotaging the committee, the administration can clear the way to write rules how it sees fit.
A 2015 report on higher ed regulations states that neg-reg used to be less controversial in the 1990s. But the report accused the Education Department of using it as “a lever to pursue its own policy objectives rather than as a channel to work with relevant stakeholders and to achieve workable regulations.”
Does the Education Department have to use neg-reg?
Negotiated rulemaking is almost always an optional piece of the regulatory process.
But uniquely, federal law prescribes that the Education Department must use negotiated rulemaking if it’s altering financial aid programs through regulation.
What’s happening with the upcoming round of negotiated rulemaking?
The Education Department has asked the student loan negotiating committee to consider five groups of borrowers:
- Those whose debt balances have grown higher than their original loans.
- Those who have been in repayment for decades.
- Those whose institutions provided low financial value.
- Those who took out loans so long ago that the same federal benefits didn’t exist as do now.
- Those who have extreme financial hardships.
Who is on the committee?
The Education Department named 14 negotiators, with an alternate for each. The primary negotiators are:
- Wisdom Cole, national director of the NAACP’s Youth and College Division.
- Kyra Taylor, staff attorney at the National Consumer Law Center.
- Lane Thompson, student loan ombuds at the Oregon Department of Consumer and Business Services.
- Yael Shavit, chief of the Consumer Protection Division of the Massachusetts Attorney General’s Office.
- Melissa Kunes, assistant vice president for enrollment management and executive director for student aid at Pennsylvania State University.
- Angelika Williams, assistant vice provost of student financial services at the University of San Francisco.
- Kathleen Dwyer, vice president of operations and regulatory affairs at Galen College of Nursing.
- Sandra Boham, president of Salish Kootenai College.
- Scott Buchanan, executive director of the Student Loan Servicing Alliance.
- Ashley Pizzuti, a student loan borrower who attended San Joaquin Delta College.
- Sherrie Gammage, a student loan borrower who attended the University of New Orleans.
- Richard Haase, a student loan borrower who attended the State University of New York at Stony Brook.
- Jada Sanford, a student at Stephen F. Austin University.
- Michael Jones, a veteran.