September 2, 2011

General and Non-Loan Programmatic Issues

Proposed Rule
Summary

Score: 14 / 60

Additional details
Agency
Department of Education
Regulatory Identification Number
1840-AC99
Agency Name
Department of Education
Rule Publication Date
08/21/2009
Comment Closing Date
09/21/2009

RULE SUMMARY

The Secretary of Education proposes to implement various general and non-loan provisions that were added to the Higher Education Act of 1965, as amended (HEA), by the Higher Education Opportunity Act of 2008 (HEOA) by amending the regulations for Institutional Eligibility Under the Higher Education Act of 1965, the Student Assistance General Provisions, the Federal Work-Study (FWS) Programs, the Teacher Education Assistance for College and Higher Education (TEACH) Grant Program, the Federal Pell Grant Program, and the Leveraging Educational Assistance Partnership Program (LEAP).

METHODOLOGY

There are twelve criteria within our evaluation within three broad categories: Openness, Analysis and Use. For each criterion, the evaluators assign a score ranging from 0 (no useful content) to 5 (comprehensive analysis with potential best practices). Thus, each analysis has the opportunity to earn between 0 and 60 points.

Criterion Score

Openness

1. How easily were the RIA , the proposed rule, and any supplementary materials found online?
Rule/RIA linked at http://www.ed.gov/news/fedregister/index.html.
5/5
2. How verifiable are the data used in the analysis?
The Department of Education tells what the data sources are, but it is not clear where, or even if, the public could verify the data. "In developing these estimates, a wide range of data sources were used, including data from the National Student Loan Data System; operational and financial data from Department of Education systems; and data from a range of surveys conducted by….Data on administrative burden at participating schools and third-party servicers are extremely limited; accordingly, as noted above, the Department is particularly interested in comments in this area." - page 41
0/5
3. How verifiable are the models and assumptions used in the analysis?
It is not clear that any models were used.
0/5
4. Was the analysis comprehensible to an informed layperson?
The RIA section was easy to understand because it was short and mostly qualitative, and it only monetized the increase in federal student aid.
3/5

Analysis

5. How well does the analysis identify the desired outcomes and demonstrate that the regulation will achieve them?
0/5
Does the analysis clearly identify ultimate outcomes that affect citizens’ quality of life?
The only "outcome" specified is an increase in student aid of about $297 million in FY 2010 and $1.6 billion over five years paid by taxpayers. The impact of this transfer on a citizen's quality of life is not discussed, perhaps because the proposal is mostly specified by the Higher Education Opportunity Act (HEOA). The other provisions in the proposal such as greater disclosure for students and quality control requirements aimed at for-profit higher education are said to be much less significant in impact.
2/5
Does the analysis identify how these outcomes are to be measured?
Other than the increase in student aid, outcomes are only briefly discussed in broad qualitative terms.
0/5
Does the analysis provide a coherent and testable theory showing how the regulation will produce the desired outcomes?
No theories are presented. The preamble states that the regulation is mostly statutory and the result of a formal regulatory negotiation.
0/5
Does the analysis present credible empirical support for the theory?
See above.
0/5
Does the analysis adequately assess uncertainty about the outcomes?
No.
0/5
6. How well does the analysis identify and demonstrate the existence of a market failure or other systemic problem the regulation is supposed to solve?
0/5
Does the analysis identify a market failure or other systemic problem?
Since key provisions are either required by the HEOA of 2008 or the result of negotiated rulemaking, the systemic need for the separate provisions is not explored.
0/5
Does the analysis outline a coherent and testable theory that explains why the problem (associated with the outcome above) is systemic rather than anecdotal?
No, the systemic rationale for increasing student loans and making the numerous other administrative changes is not presented.
0/5
Does the analysis present credible empirical support for the theory?
No, see above.
0/5
Does the analysis adequately assess uncertainty about the existence or size of the problem?
No, see above.
0/5
7. How well does the analysis assess the effectiveness of alternative approaches?
1/5
Does the analysis enumerate other alternatives to address the problem?
The rule points out that the Secretary has very little discretion but does briefly discuss a few other options in a qualitative fashion.
2/5
Is the range of alternatives considered narrow (e.g., some exemptions to a regulation) or broad (e.g., performance-based regulation vs. command and control, market mechanisms, nonbinding guidance, information disclosure, addressing any government failures that caused the original problem)?
As stated above very few options are discussed.
1/5
Does the analysis evaluate how alternative approaches would affect the amount of the outcome achieved?
No, alternatives are not analyzed but the Department of Education states in any case they would have little impact on costs.
1/5
Does the analysis adequately address the baseline? That is, what the state of the world is likely to be in the absence of federal intervention not just now but in the future?
No, the baseline is not discussed other than to say that the transfer costs estimated are pre-statute.
1/5
8. How well does the analysis assess costs and benefits?
1/5
Does the analysis identify and quantify incremental costs of all alternatives considered?
Incremental costs are not presented except for the option proposed.
1/5
Does the analysis identify all expenditures likely to arise as a result of the regulation?
The preamble discusses budget or transfer costs as described above and does estimate the administrative burden hours imposed on higher education institutions following the Paperwork Reduction Act procedures.
3/5
Does the analysis identify how the regulation would likely affect the prices of goods and services?
Price effects are not analyzed.
0/5
Does the analysis examine costs that stem from changes in human behavior as consumers and producers respond to the regulation?
It is hard to tell exactly what this means and how relevant it is. "Absent evidence on the impact of these regulations on student behavior, budget cost estimates were based on behavior as reflected in various Department data sets and longitudinal surveys listed under Assumptions, Limitations, and Data Sources in this preamble." - pages 40 and 41.
2/5
If costs are uncertain, does the analysis present a range of estimates and/or perform a sensitivity analysis?
Uncertainty is not discussed. In, fact the point estimates presented are clearly too precise.
0/5
Does the analysis identify the alternative that maximizes net benefits?
No, net benefits are not estimated because only transfers and burden administrative hours quantified.
0/5
Does the analysis identify the cost-effectiveness of each alternative considered?
No, see above.
0/5
Does the analysis identify all parties who would bear costs and assess the incidence of costs?
Only administrative burden hours are presented, not full compliance costs, although the preamble states they should be small and the price of participating in the student aid program.
2/5
Does the analysis identify all parties who would receive benefits and assess the incidence of benefits?
This is not explicitly discussed although one could perhaps infer.
1/5

Use

9. Does the proposed rule or the RIA present evidence that the agency used the analysis?
The preamble states that, "The Secretary has assessed the potential costs and benefits of this regulatory action and has determined that the benefits justify the costs."
2/5
10. Did the agency maximize net benefits or explain why it chose another alternative?
No, just the statement above.
1/5
11. Does the proposed rule establish measures and goals that can be used to track the regulation's results in the future?
No, but presumably the budgetary costs can be tracked
0/5
12. Did the agency indicate what data it will use to assess the regulation's performance in the future and establish provisions for doing so?
The section on "Assumptions, Limitations, and Data Sources" on page 41 refers to many Departmet of Education data systems. Therefore, they will presumably be gathering some data from this rule, but it is not totally clear.
1/5
 
Total 14 / 60