Hearings on the Department of Education's final regulation governing the National Direct Student Loan (NDSL) Program are presented. The final regulation makes three changes: calculation of the federal capital contribution, which is the amount of new federal dollars allocated to institutions each year; the eligibility of institutions to receive awards based on default rates; and the method of appealing an award determination made by the Department. The regulation would end new NDSL funds for the 1982-1983 academic year at schools with NDSL default rates of more than 25 percent and could reduce funds for schools with NDSL default rates from 10 to 25 percent. Schools with default rates of less than 10 percent could get a larger share of federal funds. Concern is expressed concerning: the effect on schools of the late publication of the final rule; the disproportionate impact of the final regulation on black colleges and universities, which serve low-income populations; and the potential that the regulation reduces the incentive for institutions to make substantial progress in reducing default rates. Appended materials include an NDSL application form, an article from the "Higher Education Daily," and letters from colleges and concerned groups concerning the regulation. (SW)