Fraud & State Authorization Focus of WCET's Testimony at ED's Rulemaking Hearing
Published by: WCET | 6/10/2013
In May, WCET sought your input regarding the U.S. Department of Education’s announcement of a new round of negotiated rulemaking. Such “rulemaking” is the first step in the Department possibly creating new regulations or refining old ones.
Most notable to the postsecondary distance education community was the renewed interest in the state authorization for distance education regulation. It is my suspicion that they would not have raised this issue if they did not see this as the first step in reinstating the federal regulations that had been vacated by the federal courts in the last few years.
Also of note is the Department’s renewed interest in solving the financial aid fraud for distance education problem. This is big money and a serious issue. The other items that they listed for consideration included: cash management of federal financial aid funds, state authorization for foreign locations of institutions located in a state, clock-to-credit hour conversion, gainful employment, and changes from the Violence Against Women Reauthorization Act of 2013.
David Longanecker, president of WICHE, and I provided testimony at the Department’s hearing held in San Francisco, CA on May 30. Dr. Longanecker focused solely on the history of and the role that the regional higher education compacts are playing in the creation of the State Authorization Reciprocity Agreement. I focused on fraud, state authorization for distance education, and state authorization for foreign locations. I also gave an overall philosophy about distance education regulation that I hope will help them to think differently in a changing world.
Thank you to all of you who provided thoughts and comments. They were most appreciated and very helpful. Below is my testimony. We will continue to follow any further developments.
May 30, 2013
U.S. Department of Education
1990 K Street, NW, Room 8017
Washington, DC 20006
Dear Ms. Macais:
WCET, the WICHE Cooperative for Educational Technologies submits the following comments in response to the U.S. Department of Education’s announcement posted in the Federal Register on April 16, 2013 on its intent to establish a negotiated rulemaking committee. Our comments will be limited to the following topics that were announced as being under consideration for action by the proposed negotiated rulemaking committee:
WCET’s mission is to accelerate the adoption of effective practices and policies, advancing excellence in technology-enhanced teaching and learning in higher education. Our members (institutions, state agencies, multi-institution consortia, non-profit organizations, and corporations) come from throughout the United States. WCET operates as a unit of the Western Interstate Commission for Higher Education, which is a non-profit, Congressional compact of 15 western states.
Move Regulations from Input to Outcomes Measures
There has been considerable attention by members of Congress, their staffs, and U.S. Department of Education on the developments in distance learning across colleges and universities of all types. Given the growth in this type of learning, such scrutiny is to be expected. In creating regulations, there is a tendency to bifurcate programs, courses, and students into two categories: “distance education” and “traditional.” Such a dichotomy no longer fits the educational reality. Faculty increasingly use technologies in “traditional” classes and classes of all types. There are changes in the amount of face-to-face time between faculty and students as courses become “blended” or “flipped.”
Instead of a bifurcation based on “distance” vs. “traditional,” we now have a rich array of combinations and options of how much technology is used in a course and how much face-to-face instruction occurs. Similarly, students can choose to be “distance” one term, “traditional” the next, and mixed the following term.
WCET suggests a new policy framework regarding regulating distance education and educational technologies:
Regulations should not differentiate by mode of instruction unless the regulations are actually about the tools used in the mode of instruction.
For example, it makes sense to regulate as to whether technologies are accessible or not. It does not make sense to make financial aid distinctions based upon on how the student receives instruction.
Stop worrying about the inputs. The Department’s current definition of “distance education” includes many technologies. Given the rapid change in technologies, any such list is out-of-date as soon as it is published. We applaud the move to outcomes and competency-based measures as a replacement for measures based upon mode of instruction.
Preventing Fraud in Distance Education Programs
in September 2011, the Office of Inspector General issued an Investigative Program Advisory Report on Distance Education Fraud Rings. In October 2011, the U.S. Department of Education released a ‘Dear Colleague’ letter as an “Urgent Call to Action” on “Fraud in Postsecondary Distance Education Programs.” In May 2012, the Department issued an announcement of an intent to establish a negotiated rulemaking committee with the intent of “considering suggestions for regulatory changes to further help institutions combat fraud and protect students and taxpayers from fraudulent activity.” The work begun with the May 2012 announcement now continues through the current process.
WCET and its membership stand firmly behind the Department of Education in combating fraud in distance education programs. We offer suggestions on specific details of this work.
Promote Education on Combating Fraud for Staff and Faculty
Preventing fraud often falls to a limited number of financial aid and instructional technology staff. While they bear the bulk of the burden, it is often the faculty or other student service personnel who first note anomalies in “student” behavior. Their input would be helpful in creating campus “early warning” systems. WCET encourages the Department to work with distance education organizations to continue in identifying best practices in identifying fraudulent activity and disseminating those practices to key personnel. WCET is interested in assisting with broader educational outreach to raise awareness of methods to prevent fraud.
Do Not Differentiate Cost-of-Attendance by Mode of Instruction
The Office of Inspector General’s report states: “Since 2001, OIG raised concerns about the cost-of-attendance calculation for distance education students because an allowance for room and board does not seem appropriate to these programs, which are largely designed for working adults.” Subsequently, a budget proposal from the Administration included a proviso to eliminate “room and board” and “miscellaneous” expenses from the Pell Grant cost-of-attendance calculations for distance students.
WCET strongly objects to this recommendation. The result would be to punish the innocent.
While many distance students are working adults, many are traditional age students. Adults might quit their jobs or reduce their workload to enroll in an online program. Commuter students often fit the same “working adult” profile, yet they would maintain eligibility for these same costs. Imagine twins living in the same house, both taking a full load. If one twin took all his courses online, he would have a reduced cost-of-attendance. If his twin brother took the same classes, but took one one-credit course face-to-face, that second twin brother would receive credit for room, board, commuting, and computer costs. This is simply inequitable and would have the greatest impact on those with the highest need. If the concern is about “working adults” making too much money to be eligible for Pell, then base the criteria on those considerations regardless of how the student receives instruction.
Don’t Confuse Financial Aid Fraud and Academic Integrity
Fraud is the action of someone (usually in a fraud ring) using fake, appropriated, or conspirators’ identities to deceive an institution for financial gain. Academic integrity is an act by a student (whose identity is known) to obtain a better grade. Fraud is a criminal act and many of the preventive measures are upfront. Academic integrity is a violation of policy and requires on-going vigilance throughout a course.
WCET worked with the University of Texas TeleCampus and the Instructional Technologies Council to create the “Best Practice Strategies to Promote Academic Integrity in Online Education.” This week we published an “Academic Integrity Self-Check” to help institutions work with faculty in curtailing cheating. WCET continues to have an active workgroup focused on academic integrity. Beyond proctoring and technical solutions, WCET’s recommendations include many that focus on instruction, including: improved assessment techniques, group assignments, and frequent interaction.
While financial aid fraud and academic integrity have some similarities, be wary of one-size-fits-all solutions. High barriers for proving a student’s identity in applying for aid may be appropriate, but could have a chilling effect if the student has to repeat it for each interaction within a course.
WCET Supports EDUCAUSE’s Recommendations on Technical Strategies to Combat Fraud
Subsequent to the May 2012 announcement on the Department’s intent to create a negotiated rulemaking committee, comments were accepted on proposed methods to address financial fraud for distance programs. EDUCAUSE submitted comments addressing the technical strategies issued in the Office of Inspector General’s report. WCET supports their comments as still being relevant.
EDUCAUSE suggests that tracking IP and email addresses may “assist in the identification of technologically unsophisticated fraud rings; however, those engaged in financial aid fraud in relation to distance education programs are likely to progress rapidly to the use of proxy servers and dummy e-mail accounts…” They also cite the cost and administrative burdens. WCET also suspects that many students already legitimately use multiple email and IP addresses and that “noise” will increase the analysis required to identify those in fraud rings.
EDUCAUSE also cites the difficulties in requiring distance students to physically appear as part of the admissions process. We concur that such a requirement would add a substantial burden to students and institutions.
As an alternative, EDUCAUSE suggests exploring its CommIT project, which “would enable students to navigate the myriad of systems and service providers potentially involved in applying for admissions and financial aid using only a single set of credentials. More importantly from the perspective of this discussion, it would extend such credentials on the basis of identity assurance on par with that of the financial services industry.”
State Authorization for Distance Education
In October 2010, the U.S. Department of Education issued regulation § 600.9(c) requiring institutions to “meet any State requirements for it to be legally offering distance or correspondence education in that State.” Since that time, WCET has been active in educating institutional personnel on both the federal and state regulations. WCET’s State Authorization Network is a service that connects institutions so that they are sharing knowledge about obtaining authorization and tracking compliance.
Allow Time for Compliance
Even though institutions are supposed to be following state laws and are supposed to be seeking compliance, relatively few institutions have all the approvals that are required. WCET conducted a survey earlier this year in partnership with the University Professional Continuing Education Association and the Sloan Consortium on institutional progress toward compliance. Of the 206 respondents:
This demonstrates progress over our previous compliance survey from 2011. In that survey, 67% of responding institutions did not have approval in any state.
Additionally, states are not ready to handle another onslaught of applications. Processes in some states take a year or longer. With budget constraints, compliance staffs have been cut in some states.
Institutions may need at least two years to be in full compliance. A reissue of the “good faith” effort benchmarks would be useful. More specificity in the wording of the “good faith” effort would be needed to encourage institutions to progress through the effort levels. The last set of “good faith” criteria allowed institutions to interpret that they need take only the first step to be in compliance.
Provide Clear Guidance on Outstanding Authorization Issues, Especially the 50% Definition
If you wish institutions to comply quickly, detailed guidance will be essential, especially in the Department’s apparent expectation to assure compliance only if a student receives 50% of a program in another state. While every permutation cannot be anticipated, guidelines on what will be counted as “at a distance” would be helpful. This includes indications of how blended courses, internships, and joint degree programs would be counted.
It might be easier to forego the 50% definition and use each state’s criterion as the federal requirement. Otherwise, an institution might be obligated to be approved according to state regulations, but not for federal purposes. It is already difficult enough having more than fifty state definitions without also having to determine the a 50% level for each state, especially if the activity in the state might push an institution above or below that threshold from term-to-term. Having an authorization definition that differs from the states will be confusing to institutional personnel and students. It will also alienate those charged with enforcing state regulations.
Support the State Authorization Reciprocity Agreement
Beginning with the original guidance accompanying the issuance of § 600.9(c) the Department has strongly supported reciprocity as a means towards compliance. Since that language (and the subsequent guidance) was vacated, the Department should restate its support for a reciprocal agreement. WCET strongly supports WICHE’s leadership in implementing the State Authorizaiton Reciprocity Agreement.
State Authorization for Foreign Locations of Institutions Located in a State
Other than appearing as part of the announcement for the new negotiated rulemaking effort, there has been little said about the concerns that the Department has about this issue. WCET was able to confirm that “foreign” refers to locations in other countries. WCET members have these questions:
WCET has a long history of working on federal policy issues. Recently, we have also begun partnering with other educational technology and continuing education organizations in sharing policy perspectives. Some of the issues that arose from the original state authorization regulation had to do with those composing the regulation not fully comprehending the state of the art in distance education. WCET would be happy to serve as a resource and to work with its partner organizations (several of which are named in this document) in helping to craft forward-looking regulations.
Deputy Director, Research & Analysis
WCET – WICHE Cooperative for Educational Technologies
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Deputy Director, Research & Analysis
WCET – WICHE Cooperative for Educational Technologies
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Photo Credit: Thank you to Scott Cline, California College of Arts, for tweeting out this photo. If only he had a better subject.