Major Changes to Distance Ed Proposed: Department of Education Back to Rulemaking Table
Published by: WCET | 1/18/2024
Here we go again! Significant changes to postsecondary distance education operations emerged from the U.S. Department of Education’s (Department) Winter 2024 negotiated rulemaking discussion. The proposed changes could be huge and we suggest you read or scroll through this post to see what might affect you and your students. For example, state authorization reciprocity could be greatly limited, distance education programs could be required to take attendance in every course, and all “inclusive access” programs from publishers could be eliminated.
In early January, the Department convened a set of “negotiators” to consider regulatory changes as authorized by Title IV of the Higher Education Act of 1965, as amended. Negotiated rulemaking is a multi-step process that the Department may use to develop regulations to implement federal law. For our purposes, the Department is developing regulations to address process and compliance for institutions to participate in Title IV HEA Programs.
Today, we will share an overview of the Department’s rulemaking process and provide analysis of the issues in this new rulemaking that affect institutions serving students through digital technologies and interstate distance education. We will also share next steps for you to participate in this process and how to follow the progress of this rulemaking.
Below, we’ve listed the six issue areas for this rulemaking plus the sub-issues being discussed, which we are watching closely. We have also added links to “Issue Papers,” including red-lined proposed regulatory changes that emerged during week one of the three week negotiated rulemaking process. The issue papers were publicly released by the Department to frame the discussions by the negotiators. Those who have followed rulemaking over the last ten or so years may find a bit of déjà vu in some of these proposals.
You may be asking, weren’t several final regulations from a rulemaking just released by the Department? If so, yes, you are correct, the Department released important final regulations on such issues as Financial Value Transparency and Gainful Employment and Certification Procedures that include regulations affecting the institution’s ability to serve students in programs leading to a license or certification. Those regulations, plus more, will be effective July 1, 2024.
The Department must follow the many steps in the federal rulemaking process directed by the Administrative Procedures Act (APA). The process takes considerable time. The soonest a rule from this rulemaking could be effective would be July 1, 2025. To be effective in 2025, the Department must complete several steps. Some of these steps have already been completed.
To be completed:
The rulemaking committee will complete its meetings in March 2024. The Department has expressed its desire to release final language prior to November 1, 2024, in order for the new regulations to be effective July 1, 2025.
Proposal: Eliminate Including Books and Supplies in Tuition and Fees.
Current regulations allow institutions to include (under certain conditions) the cost of books and/or supplies in tuition and fees. Career institutions use it to ensure everyone has the same tools. Publishers created “inclusive” and “equitable” access programs whereby the price of the textbook and resources are reduced for every student and it is ensured that every student has access to the textbook.
The Department allows for such contracts if the student is given a way to opt-out. Student, consumer, and OER groups have objected to the difficulty for students to remove themselves from these programs.
The Department is concerned that institutions have not been transparent about how a student can opt out so that they can assess if less expensive options are available elsewhere.
The Department proposes to eliminate the provision allowing institutions to include the cost of books and supplies as part of tuition and fees in most cases. The practice would still be allowed if an institution could demonstrate a “compelling health or safety reason, or if the institution is the only option for students to access the books or supplies.”
Inclusive access has grown as the publishers have found it to be an attractive solution that lowers textbook costs and increases their revenues. We agree there have been abuses, but let’s address them. If the Department is worried about institutions not properly notifying students (which are required by regulation), could this be resolved by addressing those infractions or strengthening those provisions?
Some institutions charge a student fee (a fraction of the price of one textbook) to cover the cost of creating, supporting, and maintaining low-cost textbooks. Kansas State University’s Open/Alternative Textbook Initiative is an example. We worry the proposed language could unintentionally harm these beneficial programs. The Department should ensure that fees to support such programs are acceptable.
Finally, if adopted, institutions will need a substantial amount of time to implement this proposal. They will need to consider new textbook alternatives in every course, adjust business processes, and address contractual obligations.
Proposal A: Complaint Process for a State Authorization Reciprocity Agreement
The Department expressed concern that states are not informed of complaints subject to a reciprocity agreement from students located in their state about institutions located in another state.
The Department indicates that without this information the state where a student is located cannot monitor if their students are protected by the reciprocity agreement.
Additionally, they maintain that information must be reported publicly and at least annually about the number and type of complaints that occur from participating institutions in member states.
This reporting is expressed by the Department as necessary for the state to receive information that could affect the state’s decision about renewing its state’s membership in the reciprocity agreement.
The Department proposes that a state authorization reciprocity agreement must include a process for communicating information received on student complaints subject to the reciprocity agreement to the State where the student is located at the time of initial enrollment. Additionally, the reciprocity agreement must require that complaints including the number and type of complaints received by States subject to the reciprocity agreement must be made public at least annually.
It is important to first note that the Department is developing regulations to address reciprocity agreements for state authorization more broadly, should more agreements be available in the future. The Department is not only addressing SARA, which is the only currently active reciprocity agreement for state authorization.
That being said, the proposal by the Department appears to affirm processes already in place by SARA. The exceptions include, first, reporting of “type” of complaint which we are aware is being currently developed by SARA. Second, the Department proposed language about informing the state where the student is “located at the time of initial enrollment.” We believe that this language is very limiting because it is possible that a student may no longer be located in the state of initial enrollment.
The responsibility of the determination of location in the event of a change reported by the student is already required in federal regulation. Finally, because reciprocity is a state-to-state agreement, we question the ability of the Department to dictate the terms of such an agreement.
Proposal B: Governance for a state authorization reciprocity agreement
The Department expressed that the governing board for a state authorization reciprocity agreement that includes members who are not state representatives could stifle the states from the ability to improve consumer protections for participating institutions.
The initial proposed language by the Department indicated that the governing board must consist of “solely” of state representatives. However, while the preceding sentence indicated “solely” representatives of states, the Department proposed a lengthy list of who may not be a public member of the governing board, including current or former employees of institutions, trade associations/member organizations, accrediting agencies, or the Department.
The Department expressed the need for consideration of a minimum number or percentage of representatives from non-state representatives to the governing board.
We concur with the idea that the vast majority of members of a board governing reciprocity should be state representatives tasked with administering the implementation of a state-to-state agreement. However, we disagree that a federal agency has the authority to regulate the composition of a board of an organization for which states are members.
Additionally, we maintain that the proposed language about groups that may not serve is unnecessarily prescriptive. The long list of barred groups includes stakeholders who are appropriate for the development of sound policy. Further, the language indicates “former employee” without a time frame or context. Implementation of this language would allow very few members of the public with any expertise in higher education, distance education, or institutional oversight to serve as members to the board.
Proposal C: State exemptions from state authorization based upon accreditation or being in operation for at least 20 years.
The Department is questioning whether a state’s determination of state authorization of an institution where the institution is located is adequate for purposes of Title IV if the state minimally considers accreditation as sufficient or waives institutional approval for institutions in operation for more than 20 years.
The Department considers that state exemptions are weakening the program integrity triad, making students and taxpayers vulnerable.
The Department has not offered proposed language, yet, but is interested in developing language based upon the review and discussion focused on three questions:
States have various structures and reasoning for the oversight of activities in their state. The Department and groups of states may want to consider collaborating to address any suggested changes. We recommend the Department start by reaching out to NASASPS (a national organization of state regulators). Determinations of state oversight requirements are an issue of state authority.
The Department should consider that mandating new state requirements in federal regulation for state authorization of institutions where the institutions are located would be time-consuming for states to undertake and could require state legislation to make changes to existing state structure. Note the federal regulation released as final in October 2010 that required a state to have a process to review and appropriately act on complaints was delayed by the Department in its enforcement date for 4 ½ years finally becoming enforceable July 1, 2015, to allow time for states to develop their complaint processes.
Negotiator Submitted Proposal: Modification of the Definition of State Authorization Reciprocity Agreement
In week 1, a negotiator submitted what the Department referred to as the Fast Proposal. This proposal identifies the perceived problem that the federal definition of a state authorization reciprocity agreement prevents student consumer protection from the state where the student is located, as that state is a member to the reciprocity agreement and is subject to the policies of the agreement. The problem expressed is that although the state where the student is located may enforce laws of general applicability such as those related to fraud, misrepresentation, and criminal activity, the state cannot enforce education-specific consumer protection laws on participating institutions for complaints subject to the reciprocity agreement. The proposer maintains that the few states with strong consumer protection laws should retain their authority to enforce that state’s consumer protection laws.
The federal definition of a state authorization reciprocity agreement has an interesting history. The language was written by the Department and did not come from consensus language of a negotiated rulemaking. The regulation, along with several state authorization-related regulations, were released as final in mid-December 2016, which missed the November 1 deadline to be effective the following July. Therefore, it was not effective until July 1, 2018.
In early 2017, Department officials communicated with Russ Poulin about their intent to clarify widespread “misconceptions.” Poulin and others had indicated an ambiguity or limitation to reciprocity related to the enforceability of education-specific state laws when an institution participates in reciprocity. The Department sought to dispel that misconception which was then affirmed in a letter by then Under-Secretary to the U.S. Department of Education, Ted Mitchell. The Trump administration began just a few days later and delayed this regulation before it became effective. The regulation eventually became effective on May 26, 2019, after a U.S. District Court ruling vacated the delay. On October 31, 2023 new final regulations were released including the currently effective definition of state authorization reciprocity agreement that clarified the language of the definition and was subject to immediate implementation at the discretion of the institution.
The negotiator proposes modifying the definition of a state authorization reciprocity agreement to directly indicate that a state subject to a reciprocity agreement is not prohibited from enforcing its own education-specific state laws in addition to general purpose laws for which states may already enforce. It is suggested that reciprocity could still exist for the purpose of a single application and fee.
Frankly, this proposal dismantles reciprocity. There would no longer be a coherent structure to protect students nationwide with uniform student protections regardless of where the student is located. Neither would there be consistent oversight of institutions in the states where they are located and hold a legal obligation to meet any requirements of that state to be authorized. Nor would institutions be part of an organized structure to facilitate their uniform compliance management to implement requirements to support students.
The proposal fails to share that only a few states maintain strong consumer protection laws and chose to join the current reciprocity agreement. The proposal does not share that many states have none or little oversight of out-of-state institutions with no physical presence in the state.
Finally, dismantling of these elements of reciprocity will leave more students without protections than providing protections in those few states with stronger consumer protections. The data of the institutions overseen in each state and numbers serving students in other states is available on the NC-SARA website: https://nc-sara.org/data-dashboards.
Proposal A: Create a “Virtual Location” for Distance Education
The Department identifies two problems that they are addressing with this proposal:
Currently, the Department defines three types of locations: the main campus, a branch campus, and an “additional location.” The latter is currently a place where 1) more than 50% of a program is offered or 2) a place of incarceration. The Department proposes a third version of “additional location:”
“(3) A virtual location through which the institution offers 100 percent of an educational program through distance education or correspondence courses, notwithstanding requirements for students to complete on-campus or residential periods of 90 days or less.
The Department will be able to assist students if an institution closes all its distance learning programs. We support students being able to avail themselves of the benefits as if the entire institution closed.
We have long supported collecting more distance education data. However, definitions are important or statistical comparisons will be compromised due to institutions unwittingly classifying the same programs differently. As we wrote last year, the Department has FOUR different definitions of distance education and this could add a fifth. We are interested in consolidating these definitions. Additionally, guidance will be needed on what programs are in or out of whatever definition they use.
Just last week, Inside Higher Ed published “Online Education Completion Lags Behind Face-to-Face Instruction.” Missing from the article was this important statement in the report (p. 25): “A disproportionate share of exclusively online students face time- or location-based constraints that can make them less likely to graduate from college—regardless of medium of instruction. This suggests that readers should exercise caution when interpreting our results, as some of the observed effects outlined in the present study may be due to selection.”
Proposal B: Clock Hour (Programs and Asynchronous Distance Education)
A quick background is needed.
Most institutions disburse financial aid based on credit hours. Some institutions (mostly those in career programs) disburse aid based upon the actual time the student spends in instruction. This proposal does not apply to credit hour programs.
The Department voiced no issue with synchronous clock hour programs, but has concerns about asynchronous distance education courses.
In those courses, students are to interact “with technology that can monitor and document the amount of time that the student participates in the activity.”
The Department has had trouble tracking asynchronous programs and is aware of non-compliance with the monitoring requirements.
The Department proposes removing “the allowance for clock-hour programs provided via distance education to be offered through asynchronous learning.”
We have asked members for input on this one and contacted the American Association of Community Colleges. Thus far we have not heard opposition to the change. Let us know if you have specific successful examples that would be affected. We are concerned that this is the second issue in which the Department merely removes an option for which the accounting is difficult.
Proposal A: Distance Education Withdrawals
The Department seeks to “increase the accuracy of R2T4 calculations for (distance) students, simplify the Department’s requirements by using available information already collected by an institution, and limit instances of inaccurate calculations and the gaming of R2T4 provisions by schools. Taking action and/or working with a student who has not been attending during a scheduled period for 14 days promotes good stewardship of Federal dollars as well as potentially assisting students during hardships.”
In order to “increase the accuracy of calculations in distance education programs, the Department proposes to require institutions to take attendance in such education programs for R2T4 purposes, which would require schools to use actual attendance data to determine a student’s withdrawal date for students enrolled entirely in online programs.” In brief,institutions would need to take attendance in all courses in distance education programs. Additionally, this also triggers a requirement that students be dropped from a class if they have not attended for 14 days.
The Department says, “students in distance education programs may not formally withdraw since they are not on campus.” But, on-campus students also withdraw without notice.
For students who withdraw from distance programs, the current practice is to capture the “last day of attendance.” A mere login is not sufficient, as evidence of an academically-related activity (e.g., exam taken, paper submitted, participation in a discussion) is required. For details, see the Federal Student Aid Handbook, Volume 5 on withdrawals, p. 52.
The 14 day drop requirement poses new challenges. When we posted this question to WCET members, some said that they have adult students (some in the military) who necessarily stop out for a few weeks, yet they successfully complete the course.
The Department says taking attendance will “Increase accuracy and simplicity of performing R2T4 calculations.” If the Department seeks to simplify, then forcing additional work on every faculty member is not simplifying. Currently, institutions track the last academically-related activity for the few students who drop without notice. The Department’s proposal would require additional attendance records for every student. Adding to the complexity is the need for new procedures for collecting attendance for asynchronous programs. How would that be done? Again, far from simple.
We object to this proposal.
Proposal B: Modules (Course Shorter than a Full Term)
Modules are courses shorter than a full semester or quarter. Problems arise in calculating the amount of aid to return when a student withdraws when enrolled in a module. Financial aid rules typically assume the student is enrolled in a course that spans the entire term.
The Department says that as “part of the 2019 negotiated rulemaking, the Department adopted a withdrawal exemption for programs offered in modules…Unfortunately, the module exemption has added complexity and confusion…It has also required significant guidance to explain how to determine whether a student qualifies for the exemption.”
The Department says that to “simplify the calculations, the Department proposes to eliminate the withdrawal exemption…Under the proposed regulations those students would now be considered withdrawn unless they meet another withdrawal exemption, resulting in more money being returned to the Department and students not exhausting their aid eligibility as quickly.”
It appears that the Department tried one approach and it proved to be more complicated than beneficial for aid officers and students. The change appears to be beneficial to both. If your institution makes extensive use of modules, it may be worth reviewing the proposed change with your financial aid officer.
Proposal A – Public representation on agency decision-making bodies
Similar to the governance proposal for a state authorization reciprocity agreement, the Department wishes to exclude certain entities from participation as a public member to an “agency decision-making body” for accrediting agencies.
The Department believes that these exclusions will reduce potential conflicts of interest and ensure that the public members are independent of the entities that the agency has accredited.
Like for the governance of a board for a reciprocity agreement, the Department is very specific as to who should be considered as a representative of the public. Former employees are added to the currently effective regulations barring institution and trade association current employees.
The structure offered by the Department in the proposed language regarding representatives of the public is overly prescriptive. Like the previous discussion about the board for a reciprocity agreement, the language indicates “former employee” without a time frame or context. We are concerned about the ability to find appropriate representatives under this highly prescriptive structure.
Proposal B Substantive Changes and other reporting requirements
In order to ensure consistency and quality, the Department maintains that there is a need to revise substantive change requirements that focus on changes of greatest risk that may impact an institution’s resources and capacity in order to protect students.
This is a lengthy regulation with many subsections. Here are the three items that we believe SAN and WCET members will want to be aware of, and includes the following in regard to a substantive change:
Regarding the expansion of agency visits, we do believe that the Department must clarify the intention to include all locations defined in federal regulation as “additional locations.”
Note that there is also new proposed language addressed in Issue #3, Distance Education to include “virtual location” among the list of “additional locations.” If the Department truly means to include all “additional locations,” this could be a significant burden to accreditation agencies. If the “virtual location” provision is added, we are not sure what a visit to such a location would entail.
We concur with the new regulations to approve distance education on an institution’s first offering and at the threshold where 50% of the program is offered at a distance. This is a great improvement over the current standard of reviewing every program that is offered “in whole or in part” at a distance.” It appears that with the continued development of more offerings by distance education, the current standard through guidance is unnecessarily broad and could include nearly every program at an institution. We welcome the proposal.
The Department appears to seek the determinations of the agency decision-making body in all matters of substantive change rather than to delegate certain decisions to agency staff, as is the current practice. We do not see a rationale by the Department specific to this concern. The current regulation was developed through rulemaking that came to a consensus. One wonders why we need to revise a regulation that came from consensus and became effective July 1, 2020. One could consider that the currently effective regulation that allows agency staff to approve some requests is prudent as it provides for the accreditation agency to act more swiftly to address certain substantive changes.
What is the Problem that the Department Has Identified?
The Department wishes to codify existing practices and recognition of procedures of state agencies that provide the approval of nurse education. Currently, these agencies are subject to the Department.
The Department wishes to provide into Federal regulations, at proposed Part 604, the framework for oversight and accountability for the Secretary’s recognition of State agencies for the approval of nurse education.
The basis of the rules are found in outdated statute found here:1969 Federal Register Notice (pgs. 58-59) here: FR-1969-01-16.pdf (govinfo.gov)1.
This is an extensive new section to the CFR to oversee these state agencies. It is reported that only five states would be subject to these regulations as they have chosen to be subject to the approval of the Department. The alternate negotiator for this rulemaking indicated that in the next year only three states would be subject to the approval of the Department. This is an extensive new section to the CFR to oversee these state boards of nursing. There is more to learn about the intent and applicability of these proposed regulations to state boards of nursing.
We know this is a lot to take in, especially on top of determining processes to implement new final regulations released last October that will become effective July 1, 2024.
However, it is important for you to know the potential impact of rules that could come from this new rulemaking, as these may affect your institutions and students.
Please stay tuned to WCET Frontiers for additional information and guidance, but you can also follow and participate in the process directly.
To follow the process:
To participate in the process:
We fully support the need for safeguards for students and for protecting the integrity of Title IV HEA programs. We hope that this rulemaking process will provide balanced, rational, and long-lasting regulations that consider the impact on all constituencies and provide clear regulations that are narrowly tailored to address specifically identified concerns.
Look for more from SAN & WCET as the rulemaking progresses!