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Joint Comment Letter to DOE re: Title IV Program Integrity and Improvement – Negotiated Rulemaking
RE: Title IV Program Integrity and Improvement – Negotiated Rulemaking
Dear Ms. Moran:
The Consumer Bankers Association (CBA) and the American Bankers Association (ABA) (collectively, the Associations) appreciate the opportunity to submit our comments on the Department of Education’s (DOE) current draft regulation, issued pursuant to a negotiated rule making process that addresses matters related to Title IV HEA program funds. We support the goals of the draft regulation and will continue to work with the DOE on this important issue, but we have serious concerns about the proposed provisions related to the disbursement of federal student aid credit balances (DOE’s Issue Paper 4).
The Associations share the DOE’s goal in promoting students’ understanding and management of financial products while ensuring that they have meaningful choices. However, we have serious concerns about and objections to the expansiveness of the draft regulation related to disbursement of these federal student aid credit balances, particularly with regard to non-disbursement accounts (i.e. accounts opened outside of the Title IV credit balance disbursement process), as well as with regard to sponsored disbursement accounts.
Concerning non-disbursement accounts, though the language in the draft regulation is not clear, it would certainly classify as “sponsored accounts” any traditional bank deposit account linked to a “campus card,” such as a college identification card, even though the depository institution offering the account does not facilitate the delivery of federal student aid credit balances for the school -- which is the subject of the rulemaking. In addition, the draft regulation could cover any deposit account that could receive federal student aid credit balance disbursements held by a financial institution that happens to have other types of arrangements with a college or universities (“educational institutions”). As sponsored accounts, these accounts would be subject to various requirements and significant restrictions under the proposed regulation, including disclosure of relationships that have nothing to do with the disbursement of federal student aid credit balances.
To read the full Comment Letter, please download the PDF.