Sweeping Changes Proposed by the Department of Education

Ready to change higher education, as we know it, in the United States?

Based on two announcements from the U.S. Department of Education on July 31, Betsy DeVos and company seem poised to do so.

Of most importance to our readers is a wide-ranging set of issues that are slated to be addressed in an upcoming negotiated rulemaking committee.

The issues are quite varied, but several are aimed directly at those of us in the “innovation” space. For those interested in the fair treatment of students using federal loan programs, the Borrowers Defense to Repayments seems to make it tougher for students to seek relief if they feel the institution misrepresented itself.

These are far-reaching issues. We urge everyone to pay attention and participate. The results will change what you do on a day-to-day basis. Let’s make sure that change is for the better.

Proposed Negotiated Rulemaking to Address (at Least) 11 Important Issues

The announcement by the Department regarding their intent to establish a negotiated rulemaking committee, included many significant and somewhat surprising elements that are important for us all to recognize and understand. The Department explained their plan to use this rulemaking opportunity to cover a considerable number of topics. The number of topics is so sizeable that the Department intends to create two subcommittees to make recommendations to the rulemaking committee regarding proposed regulatory language.

Negotiated rulemaking committees strive to reach “consensus,” which is defined as ALL of the members being in 100% agreement on ALL language on ALL proposed regulations before the committee. If there is a failure to reach consensus, the Department may then write their own proposed regulations. It is a difficult standard and is made more difficult when they are reviewing multiple, unrelated issues.

The 11 Topics for Rulemaking

The following is a brief list of the topics suggested by the Department for the Rulemaking Committee to consider. You can see the exact language of each existing regulation in the Electronic Code of Federal Regulations, Chapter 34 on Education. The section number (e.g., “CFR 302”) is provided for each topic:

• Core functions of accreditation – 34 CFR 602;
• State Authorization – 34 CFR 600.9 & 668.50;
• Definition of “regular and substantive” – 34 CFR 600.2, 600.7, & 668.10;
• Definition of “credit hour” – 34 CFR 600.2, 602.24, 603.24, & 668.8;
• Relationship between length of program and entry-level requirements for the recognized profession – 34 CFR 8(e)(1)(iii) & 668.14(b)(26);
• Arrangements between an institution and another institution or organization to provide a portion of a program – 34 CFR 668.5;
• Responsibilities regarding teach-out processes – 34 CFR 600.32(d) and 602.24;
• Barriers to innovation or student completion, graduation, employment – 34 CFR part 600 & 34 CFR part 668;
• Simplification/clarification of program requirements regarding TEACH grant – 34 CFR part 686;
• Direct Assessment Programs/Competency Based Education – 34 CFR 668.10; and
• Faith based entities participating in Title IV – 34 CFR 600.11 and parts 628, 674, 675, 676, 682, 685, 690, 692, and 694.

Convening of Two Subcommittees

The Department proposes to create two subcommittees to address very specific topics and to make recommendations to the rulemaking committee regarding proposed regulatory language:

• The first proposed committee is intended to address regulations related to direct assessment programs and competency-based education. The Department explains that the subcommittee would study the institution’s ability to develop programs and address student progress through innovative programs that address societal needs. The subcommittee would consider revisions to regulations that are barriers to implementation of these types of programs.
• The second proposed subcommittee would recommend revisions to the regulations regarding faith-based entities to participate in Title IV, HEA programs.

Of the eleven proposed topics for rulemaking, only two of the topics are proposed to be addressed by subcommittees.

Comment Period and Public Hearings

Please note that the topics for rulemaking are SUGGESTED and the subcommittee plan is a PROPOSED plan. The Department will accept comments until September 14, 2018 regarding the topics for rulemaking and additional topics that should be considered. Three public hearings are also scheduled for interested parties to publicly comment on the topics suggested for rulemaking. The dates are:

• Sept. 6, 2018 – Washington, DC,
• Sept. 11, 2018 – New Orleans, LA,
• Sept. 13, 2018, Sturtevant, WI.

WCET and the WCET State Authorization Network are tentatively planning to comment at one of these hearings. The specific topics for negotiated rulemaking will be announced in the Federal Register after the Department reviews the written comments and the comments from the public hearings.

Nominations and Schedule for Negotiators and Subcommittees

The nomination process will be announced in the Federal Register after the Department reviews the comments from the public hearings and the written comments. The Department believes that the committees will begin negotiations in January of 2019 for up to three sessions of three days each at roughly four to eight-week intervals. The subcommittee will begin in January or February after the first meeting of the committee. Prior to the first meeting of the committee or subcommittee, the Department will provide drafts of proposed regulatory language to be discussed by the negotiating committee and subcommittees.

Why Should You Care? – And You Really SHOULD Care

Some of these issues will have a tremendous impact on the daily operations of institutions. No fewer than six of the topics have a direct impact on those working in distance education, technology-enhanced education, competency-based education, and other “innovations.” Other topics will have a more indirect impact. Here are some thoughts on the six issues that most impact us:

• It would be nice to settle the federal state authorization regulation once a for all. The Department will probably seek to severely limit or eliminate it. We hope they maintain it for the sake of protecting students. Even if the federal regulation goes away, state regulations remain in place.
• The WGU audit brought the definition of “regular and substantive interaction” into the limelight. We want to be active on this one.
• Related to the interaction issue is the desire to assure that competency-based education programs have paths to federal aid.
• Building on the Department’s EQUIP experiment program, there are those who would like to codify the ability for institutions to have arrangements between an institution or organization to provide more than 50% of an academic program.
• While teach-out processes often focus on closing institutions, distance education programs sometimes need to implement teach-out processes if they no longer wish to offer a program or to offer a program in a location.
• The barriers to innovation or student completion, graduation, and employment issue could be part of opening aid to more (now non-accredited) providers and for ALL institution to provide data about graduate outcomes.

Other issues on the list could also have a big impact, including changes to accreditation and definitions of the “credit hour.”

Frankly, these are too many important issues for one rulemaking. It will be difficult to consider the nuances of all the issues in the time allotted early next calendar year. Some of the items that are less interesting to the presidential organizations or the press may get short shrift. The fear is that several of our issues may fall to that secondary list.

Borrowers Defenses to Repayment

The public is asked to comment on proposed changes for Borrowers Defenses to Repayment regulations. These regulations outline under what circumstances a student loan borrower may seek relief from a loan under certain circumstances, such as the closure of an institution or misrepresentation by an institution.

Karen McCarthy of NASFAA (the organization of financial aid administrators) provides a great overview of what is included in the propose changes. Probably of greatest concern is that, if enacted, these rules would raise the bar for students to qualify for relief:

“Under the proposed rule, a borrower would have to show that it is more likely than not that an institution made a misrepresentation — ‘a statement, act, or omission by the school to the borrower that is (i) false, misleading, or deceptive, (ii) made with knowledge of its false, misleading, or deceptive nature or with a reckless disregard for the truth, and (iii) directly and clearly related to the making of a Direct Loan for enrollment at the school or the provision of educational services for which the loan was made.’”

Translation…the misrepresentation has to be done “intentionally or with ‘reckless disregard for the truth.’” Coupled with a higher standard of proof, detractors see this as making it tougher for students to get debt relief when their college experience goes awry due to circumstance beyond their control.

Comments are due to the Department by August 30.

What Can You Do in Response to These Two Department Announcements?

You have opportunities to let your voice be heard! Please take advantage of these opportunities! We strongly urge you to share your thoughts and opinions. This is your opportunity to address the proposed language in the new proposed rules for Borrowers Defense to Repayment. Additionally, here is your opportunity to share with the Department your views about the vast number of topics that are suggested for negotiated rulemaking and the chosen topic areas for subcommittee assistance.

Please be sure if you are providing the official comment for your institution or organization that you have the proper approval to do so. You may provide a comment as an individual. If you choose that option, you may indicate your role at your institution or organization, but you should make it clear that you are providing a comment on your own behalf.

Process for Commenting:

There are two different comment periods for interested parties to respond to the Department’s two different July 31 announcements.

• First, if you would like to respond to Notice of Proposed Rules for Borrowers Defense to Repayment, you must do so by August 30, 2018. Docket ID: ED-2018-OPE-0027.
• Second, if you would like to respond to Announcement of Negotiated Rulemaking, you must do so by written comment by September 14, 2018; and/or you may provide a public comment at one of the three Public Hearing sites: Sept. 6, 2018 – Washington, DC; Sept 11, 2018 – New Orleans, LA; Sept 13, 2018, Sturtevant, WI. Docket ID: ED-2018-OPE-0076.

The Department strongly encourages comments to be submitted through the Federal eRulemaking Portal (www.regulations.gov). In the alternative, comments may be submitted by postal mail, commercial delivery or hand delivery. The Department will not accept comments by email or fax. You must include the Docket ID at the top of your comments.

Mail or delivered comments for the Proposed Rules for Borrowers Defense should be addressed to:

Jean-Didier Gaina
U.S. Department of Education
400 Maryland Ave., S.W., Mail Stop 294-20
Washington, DC 20202

Mail or delivered comments for the Negotiated Rulemaking should be addressed to:

Aaron Washington
U.S. Department of Education
400 Maryland Ave., SW, room 294-12
Washington, DC 20202

We Need Your Help

Your participation in this process is critical! These comment periods offer the regulated parties the ability to share their insight into the practical application of what the Department proposes before they become a final and enforceable regulations. Please review the announcement and consider the impact on your institution or organization. WCET and SAN will continue to follow these proposals, submit comments, and keep you updated as information becomes available.

We might provide some suggested wording for commenting on some of these issues and definitely will do so when specific proposals emerge as part of the committee’s processes. Meanwhile, even short comments about any concerns and thoughts you may have will help. Volume counts!!!

Be observant! Be innovative! Be Active!

Russell Poulin
Director, Policy & Analysis
WCET – WICHE Cooperative for Educational Technologies
rpoulin@wiche.edu | @russpoulin

 

Cheryl Dowd
Director, State Authorization Network
WCET – WICHE Cooperative for Educational Technologies
cdowd@wiche.edu

 

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