| DCLPublicationDate: 1/1/95 DCLID: GEN-95-4 AwardYear: Summary: Simplification of our Federal student aid regulations and administrative processes January 1995 GEN-95-4 Dear President: I want to take this opportunity to let you know about our progress at the Department of Education to simplify our Federal student aid regulations and administrative processes. In developing the several regulations published in the Federal Register in November and December 1994, we were guided by President Clinton's Executive Order 12866, which requires Federal agencies to minimize regulatory burden. These regulations, necessary to implement congressional directives, were designed to reduce burden on institutions, students, and families, by regulating only when necessary to protect students' and taxpayers' interests. They also give institutions increased flexibility in meeting regulatory standards. The higher education community participated extensively in this regulatory effort by meeting with us, both formally as part of the negotiated rulemaking process and in a series of less formal discussions. The community also reviewed proposed regulations, often on an expedited basis, and provided thoughtful and detailed comments. We combined many of the comments and suggestions with our regulatory principles to shape a set of regulations that result in less burden for students and institutions, are easier to implement, and serve our nation's postsecondary education goals. Our joint efforts simplify and reduce burden for 7,300 postsecondary institutions and approximately 7 million students who annually receive about $30 billion in Federal student aid. The following are a few highlights of the many improvements made to our regulations this year: - We eliminated the requirement that Federal Pell Grant applicants submit a copy of their Student Aid Report to their school of choice, thereby eliminating the need for more than 5 million students to submit this form and for schools to process them. - We eliminated the requirement that all 7,300 schools that participate in the Federal student aid program establish a cash reserve fund to cover tuition refunds. Instead, we will apply performance-based criteria, thus relieving schools with good refund processing histories from the obligation. - We modified rules to give more flexibility to schools in the management of student accounts, thereby assisting students with budgeting and enhancing opportunities to use new technologies (e.g., Smart Cards, Electronic Funds Transfer). I have enclosed a list of additional provisions from the regulations that provide relief, flexibility, and simplification. This burden reduction initiative is part of a continuing effort by the Department of Education and the entire Administration to minimize regulatory burden. In the coming year, the Department will undertake a review of existing student financial aid regulations to determine where additional burdens can be reduced, and to identify performance and outcome measures that could be used to target regulatory requirements more specifically to situations where they are needed to protect students or Federal funds. We appreciate the advice and expertise provided by you and your financial aid staff as we move forward together to simplify and improve the administration of these important student aid programs. If you need additional information, please contact Jeff Baker, Director, Policy Development, Student Financial Assistance Programs, at (202) 708-9967. Yours sincerely, Richard W. Riley Attachment |