Program Integrity Negotiated Rulemaking Session 3, Day 1

Yesterday was the start of the third Program Integrity negotiated rulemaking session at the U.S. Department of Education offices on K Street. Negotiators will meet for at least three days from Wednesday through Friday.

Agenda:

Since consensus was already reached on Issue 1: Clock to Credit Hour Conversion, the U.S. Department of Education was able to move immediately to the second draft of proposed regulatory language for Issue 2: State authorization of distance education providers as a consequence of institutional eligibility and Issue 3: State authorization of foreign locations of domestic institutions. Most of the day was spent discussing issues 2 and 3, but the Department was also able to go over the second draft of regulatory language for Issue 4: Cash Management. Issue 4 will probably take up most of the day tomorrow with Issue 6: Definition of Adverse Credit for the Direct PLUS Loan most likely occurring Friday.

Opening Remarks:

Pam Moran, the Education Department’s negotiator, explained at the beginning of the meeting that the entire package of regulations being discussed will not be voted on until the end of the final committee meeting in May. Since the committee is only getting the first draft of regulatory language for Issue 6, the Department added a fourth meeting in May so that committee members will be able to review the second draft of language for PLUS. The session in May will primarily focus on PLUS loans but will also include discussion on the total package of regulations.

Issue 2: State Authorization of Distance Education Providers

For an overview of what was discussed about Issue 2 during the last committee meeting, read my blog post about it here.

The Department made several significant changes to the second draft of regulatory language. For consistency with other regulation, they have broadened the definition of legally authorized. They have also limited state authorization of distance education for purposes of institutional eligibility for funding under the HEA to institutions that offer or will offer 50 percent or more of a postsecondary education program through distance or correspondence education to students in that state. According to Moran, this will help address the concerns that the Department heard from committee members during last session about students who may be on summer break in another state, but taking a course online through their home institution.

The Department has also kept the controversial language from last draft that an institution is not considered to be legally authorized if it is exempt from state approval or licensure based on accreditation, years in operation, or other comparable exemption.

The Department has added a provision that if an institution enrolls a member of the armed forces, the member’s spouse, or dependent child and that student relocates to another state and continues taking distance education courses with that institution, that the institution would still be considered legally authorized to provide title IV to the student for the duration of the student’s continuous enrollment in that program.

The Department has also proposed in §600.9(d) that an institution would not be considered legally authorized for purposes of institutional eligibility for funding under the HEA for a program offered in a state if graduates from those programs are not eligible to receive certification or sit for the licensure or certification examinations necessary for them to obtain employment for which the program is intended, unless the institution obtains written acknowledgement from each student before s/he enrolls in the program that the program will not make him or her eligible to obtain employment in that state.

Commentary: 

Betsy Hicks, executive director of student financial services at MIT and the representative of the private, nonprofit institutions, wondered what would happen if the student had a choice of taking the program 0 to 100 percent through distance education. Moran clarified that a program would be triggered if it was designed so that a student could do 50 percent or more online.

Russ Poulin, deputy director for research and analysis at WCET and the lead negotiator for distance education, commented that there are somewhere around 45 states that will need to change their laws and regulations to go through a process of active oversight to comply with exemption not being sufficient oversight. He explained that states will need to create mechanisms and triggers. Students could be caught up in the ensuing confusion. And an institution can suddenly be caught while the student is in the program, leaving the student in danger or losing his or her Title IV aid. His recommendation is to remove §600.9(c)(8).

Chuck Knepfle, financial aid director for Santa Barbara City College and representative for public institutions, echoed Poulin’s concerns. He believes this provision will limit student choice. To get 45 new state laws and regulations passed will be nightmarish. It will add much burden to states and institutions and will be difficult to be in compliance.

Sophia McArdle from the Department reiterated the Department’s stance from the last session—exemption is not an active role in oversight. Authorizing a program just because it has accreditation violates the triad. There has to be “accreditation plus.” In the preamble the Department will include a timeline and information about extensions in order to prevent students from suddenly losing aid if their program was exempted and now must be authorized.

Poulin asked if the Department could be more specific about what “accreditation plus” would look like—a more specific definition in regulation.

Chris Lindstrom, higher education program director from USPIRG and the representative for students, supported the language clarifying that exemption is not authorization. Whitney Barkley, staff attorney with the Mississippi Center for Justice and representative of the legal assistance organizations, agreed with Lindstrom saying, “We’re creating a floor that everyone needs to abide by.” She thinks that adding a safe harbor to the regulation and putting a timeline to comply in the preamble would help alleviate problems with students getting caught in the system and potentially losing aid during the transition. Additionally, Barkley and Lindstrom both like the disclosure provision about licensure in §600.9(d) but would like to strengthen the language so students have to actively acknowledge what they have read, not just initial an electronic document.

In sum, it sounds like there is still quite a bit of disagreement around the table surrounding Issue 2. From where the draft is now, this will be one of the issues where it will be difficult to come to consensus by May.

Issue 3: State Authorization of Foreign Locations of Domestic Institutions

For an overview of what was discussed about Issue 3 during the last committee meeting, read my blog post about it here.

This is new water for the Department to regulate under State Authorization and refers to authorizing international branch campuses or additional locations of domestic campuses. As such, much of the changes in the second draft reflect the feedback from various committee members. Like in Issue 2, the Department limited the applicability of the requirement that an additional location or branch campus be legally authorized to operate by an appropriate government authority in the country to foreign additional locations at which 50 percent or more of the program is offered or will be offered. All foreign branch campuses would need to be legally authorized in order for students to receive Title IV aid.

Commentary:

Most of the feedback on the new draft was from institutional representatives giving examples of programs and trying to understand whether they’d be in compliance. There is general agreement that the Department did much better writing the regulations this time around. It sounds likely with technical tweaks that the committee has a good chance at coming to consensus on this issue.

Issue 4: Cash Management

Although the Department went over the draft regulatory language for this issue, they ran out of time to start discussion. Expect most of Thursday to be dedicated to Issue 4.

Stay tuned for day two of session 2. Or you can attend in person at 1990 K Street, N.W., Eighth Floor Conference Center, Washington, D.C.