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The Rulemaking Process: Differences in Federal Regulatory and Sub-Regulatory Guidance

October 19, 2017 Diana Ali NASPA

The Obama administration increased regulatory and sub-regulatory guidance in a number of key bucket areas affecting higher education policy. Ranging from loan servicer accountability to sexual violence misconduct cases, the Obama Department of Education (ED) used the power of administrative rulemaking to provide institutions with clarity and interpretation of existing law. In the last eight months, the Trump administration has used this very same regulatory process to rescind much of this previous administration’s guidance, prompting headlines have sparked curiosity and debate regarding the appropriate uses of the rulemaking process. Questions surface, such as: Does regulatory guidance affect or alter existing law? What is the difference between formal guidance and sub-regulatory guidance? What role does the public have in the rulemaking process? Continuing our NASPActs Policy Basics series, this post digs into the federal rulemaking process and provides insight to better understanding differences between regulatory and sub-regulatory guidance processes and resulting impacts.

Regulatory Guidance

First and foremost, federal regulation cannot change existing legislation, but rather informs how this legislation is interpreted and enforced. This is why regulations are referred to as “guidance.” When Congress enacts a new law that may affect institutions of higher education, the legislation will most likely not include clear steps as to how the law will be operationalized on campus. Congress either directs government agencies, such as the Office for Civil Rights (OCR) or Federal Student Aid (FSA), to create regulatory guidance or leaves the implementation up to the discretion of the appropriate agency. One example pertaining to Title IX of the Education Amendments of 1972 is part 106 of the Code of Federal Regulations (CFR) Title 34 on “Nondiscrimination on the Basis of Sex in Education Programs or Activities Receiving Federal Financial Assistance” which the ED Office for Civil Rights released in 1980 to provide specific guidance on discrimination on the basis of sex across campus, from admissions to housing.

If Congress was to attempt to overturn a rule outside of interdepartmental renegotiations, it could attempt to expedite the process through the use of the Congressional Review Act (CRA). If both the House and Senate were to sign a disapproval resolution that was enacted by the President, the rule in question could be repealed entirely. However, the CRA includes certain limits in an effort to prevent overreach of control in the agency rulemaking process. First, Congress must issue a joint resolution within 60 calendar days of receipt of a regulation. The President then has the power to veto the joint resolution, of which Congress then gets a chance to override. The CRA also only authorizes the review of major rules, which is defined as having an annual economic impact of at least $100 million.

In addition, due to the 60 day delay in which a regulation is under the review of Congress, an incoming president can, and often does, issue a moratorium blocking the effect of non-finalized regulations, with exclusions to rules held under statute or undergoing a judicial process. 

After a final rule is established, the issuing agency is required to undergo protocols of the rulemaking process in order to change or revoke a final rule. For instance, in June 2017 Secretary DeVos blocked the advancement of borrower-defense and gainful-employment regulations set to go into effect on July 1 and declared the intent to renegotiate the regulations in light of pending court cases.  As a result, negotiated rule-making panels within the ED will take place later in the year with negotiations set to run until mid-March. While Secretary DeVos has not yet revoked an existing regulation, the delay in implemented guidance has resulted in loosened restrictions on potentially predatory institutions regardless.

Before a final rule is issued, proposed regulations to a law typically undergo a one or more periods of public comment and revision processes, during which any member of the public can provide feedback to the department on the proposed regulation. The department must review and respond to all submitted comments, whether the comments prompt them to change the regulation or not. To continue our example on Title IX, in March of 2004 Secretary of Education Rod Paige proposed a change in rulemaking to part 106 CFR Title 34 to clarify the interpretation of “single-sex” education. The proposal was open to public comment and the Department of Education received 5,860 comments on the proposed regulations. Comments were analyzed under the rulemaking process and led to revision of the proposed regulation in some places and no change in others. A final rule was implemented by the Secretary of Education in October of 2006 and part 106 has not been altered since.

As part of the rulemaking process for the revision of part 106 in 2006, the Office of Information and Regulatory Affairs (OIRA) reviewed the draft proposal and provided oversight on cost effectiveness and efficiency as designated in President Clinton’s 1993 Executive Order (EO) 12866 “Regulatory Planning and Review.” The EO was created at the time to establish guiding efficiency principles under which agencies must follow including cost-benefit analysis, performance assessment, and risk assessment.  Today, revisions to regulations are also subject to changes the Obama Administration made to EO 12866 in 2011 through EO 13563. EO 13563 creating five new guiding principles in the rulemaking process with an emphasis on public participation, regulatory flexibility, distributive impact, and cost effectiveness.

Sub-Regulatory Guidance

As discussed earlier, part 106 of CFR Title 34 is federal regulatory guidance created by OCR to implement enacted law (Title IX). Although part 106 has not seen significant regulatory reform since 2006, the rule has been subject to interpretive rules and policy statements, referred to formally as “sub-regulatory guidance.”  These interpretive rules are not subject to the same rulemaking process as significant rulemaking like part 106. For instance, recently rescinded Obama-Era 2011 Dear Colleague Letter (DCL) and 2014 Question and Answer (Q&A) documents on Title IX and Sexual Violence further interpreted part 106, but were not opened to public comment or negotiated rulemaking. A DCL and a Q&A are just two types of sub-regulatory guidance options used by Executive Agencies. OCR has also previously issued press releases, a Know Your Rights toolkit, and memorandums (MOUs) as part of sex discrimination policy guidance, all of which are accessible through archived materials on the Department of Education’s website.

As sub-regulatory guidance, these guiding policies were not open to public comment and were created entirely under the discretion of the ED OCR. Therefore, while sub-regulatory guidance cannot alter existing regulation or enacted legislation, the process fosters rigidity in how existing rules are operationalized on the ground and is greatly impacted by changes in administrative control. 

The Trump administration re-interpreted Title IX guidance mentioned above regarding campus sexual assault proceedings through the issuance of a September 2017 DCL which withdrew the Obama-era guidance issued above and released requirements that campus use of the preponderance of evidence standard imposed by the Obama-era guidance. Similarly, in May of 2016 the Obama Administration interpreted part 106 and Title IX to extend nondiscrimination regulations to trans individuals through a May 2016 DCL on Transgender Students. This guidance was re-interpreted through additional sub-regulatory guidance in February of 2017 by the Trump Administration which released corresponding regulation determining that Title IX protections did not extend to trans students.

Please look for additional posts on the rule-making process for a deeper dive on negotiated rulemaking and public participation. 

Was this post helpful? Want to know more policy basics or have questions about how different pieces of the public policy puzzle fit together? Let us know and we may do a post on it in the future!