Deal Unlikely on Debt-to-Income Ratio

January 29, 2010

Negotiators involved in this week's final round of negotiated rule making on revisions to the U.S. Department of Education's regulations on the disbursal of federal financial aid funds said late Thursday they wouldn't be putting much more effort in trying to reach agreement on the most contentious proposal being debated. In draft form, the rule requires that debt repayments be no more than 8 percent of the annual salaries of recent graduates of programs that prepare students for "gainful employment." The panel attempted to make progress on the issue Thursday morning, but differences seemed too large to bridge. Terry W. Hartle, senior vice president for government and public affairs at the American Council on Education, said federal and non-federal negotiators agreed they "probably won't get finished" with working out all the concerns over the proposed rule. The group, he added, would instead focus on trying to reach agreement on revisions to all the other rules under consideration and then return to discussion of the debt-to-income ratio Friday if time permits.

Agreement on much-debated rules on incentive compensation for recruiters seemed "close enough," Hartle said, that negotiators agreed to continue discussion Friday. Negotiators would have to reach consensus on the full package of 14 rules for them to be adopted without further revision by the department. Without an agreement on the debt-to-income ratio, or any other issue, the department would be free to make further changes to any and all rules, though it's likely officials wouldn't substantively edit any rules on which the panel reached agreement.

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