Textbox: About Rulemaking
The Department is considering many issues, we focus on those of interest to our members.

We are still in the proposal and negotiation stage.

Negotiations end March 7.

Proposed rules will likely be published for public comment in October.

If that is the case, the rules will go into effect on July 1 2026 at the earliest.

The film Nyad is sometimes difficult to watch as the titular character braves her way through a Cuba to Florida swim that took 53 hours of non-stop swimming. Along the way she is besieged by poisonous jellyfish, sharks, exhaustion, and the constant battering of waves.

We feel a connection with her. Last week was the second week of the Department of Education’s latest marathon negotiated rulemaking sessions. While we are relatively dry, we are exhausted from dodging the sharks and shoals of rulemaking. We applaud those who are serving as negotiators.

Today’s post is an update on the changes from week one, including the new proposals and discussions among negotiators and that we have had with others. See our summary of the week 1 session.

Watch for additional details in the coming weeks, including suggestions on how you can get involved.

We encourage you to stay alert as the changes proposed could have a major impact on distance education and all of higher education. We designed this post so that you can quickly scan to find the items of interest to you. We would love to hear your questions or feedback.

State Authorization – Distance Education Reciprocity; In-State Exemptions

Department of Education’s “State Authorization” Issue Paper Week 2

Distance Education Reciprocity 34 CFR 600.2 and 34 CFR 600.9

In considering “state authorization,” the Department continues to primarily focus on distance education reciprocity agreements. In week two, the Department’s proposal expanded the language addressing complaints and governance that were the sole focus of their January proposal. This time they also took into consideration a far-sweeping negotiator’s proposal from week 1 to limit the scope of reciprocity.

Textbox: Proposal:
Institutions participating in reciprocity still need to follow the requirements of each state.

That proposal contemplates limiting reciprocity covering only the application for authorization in each state. It would also subject reciprocity institutions to “education-specific laws.” The week two committee discussion centered on the definition of “education-specific” and the applicability of those laws.” Clarity did not seem to result. Another proposal emerged recommending the removal of the “education-specific” term and to plainly say that, for reciprocity, each state can enforce all state laws.

Applicability of enforcement of state education-specific laws upon institutions participating in reciprocity will affect the value of reciprocity by removing the uniformity of oversight of institutions across all member states. For example, even if participating in reciprocity, institutions would be subject to state requirements (e.g., bonding, closure, tuition refund timeline) at the discretion of each state.

If the proposals are implemented, the assertion that reciprocity still exists is disingenuous. Along with institutions having to research and be subject to varying laws, it would also have a big impact on states. If a state decides to apply other regulations to institutions through reciprocity, a single application would be insufficient. States would need some sort of additional application targeting their need to know about institutions serving their students. Additionally, they need funds to support the additional oversight responsibilities of the institutions serving students in their state.

In-State Authorization Exemptions 34 CFR 600.9

Textbox: Proposal:
States change state laws to 
re-authorize institutions that have long been approved.

Outside of reciprocity, the negotiators also considered authorizations for in-state institutions. A week two proposal seeks to sunset state determinations of authorization for in-state institutions when the authorization is exempted based on: a) accreditation or b) the institution has been in operation for more than 20 years.

To remain eligible for Title IV, HEA programs, this proposed language would require states that exert such exemptions to change their state’s laws for institutions to be considered authorized by the state. Private, non-profit institutions might be most affected by this proposal.

Cash Management – Limitation of Books and Supplies as Part of Tuition & Fees

Department of Education’s “Cash Management” Issue Paper Week 2

The Department has expressed concern about “inclusive access” programs in which digital content is delivered to students by the first day of class and students pay for these books and/or supplies through tuition and fees. They worry about the institution’s transparency in enabling a student’s ability to opt out. The original proposed regulations (which were discussed during the first week of negotiations) eliminated the provision allowing institutions to include the cost of books and supplies as part of tuition and fees unless there was a health and safety reason or if the institution was the only option for students to access those books and supplies.

Textbox: Proposal:
For inclusive access, students would need to opt-in.

The revised proposed language in 668.164 (c)(1) and (2) only allows an institution to include the cost of books and supplies as part of tuition and fees if there 1) is a health and safety reason or 2) the books and supplies are made available below a competitive market rate. Additionally, institutions would have to disclose the cost of those books and supplies and students would have to opt-in to the fee each payment period.

There was much discussion among the negotiators about these proposed changes. Several negotiators expressed concern that students might no longer have instructional materials on the first day of class. The Department and several other negotiators talked about the importance of providing students with transparency and consumer choice regarding the purchase of materials.

Return to Title IV (R2T4) – Require Attendance Taking for All Distance Education Courses

Department of Education’s “Return to Title IV” Issue Paper Week 2

Treatment of Title IV Funds When a Student Withdraws 34 CFR 668.22

There are times when a student will stop attending an institution without telling anyone. While the Department presents no evidence, it does assert that this is more likely in distance education courses. When a student drops out, the Department expects unused aid funds to be returned to federal coffers. Therefore, the date when a student stops attending is crucial. Distance education has long been held to a higher standard using the “Last Day of Attendance” rule. Under that rule, if a student drops-out without notice, then the institution has to base the refund for Title IV funds to the Department on the last day that the student demonstrated “academic engagement” (e.g., took a quiz, participated in a discussion, submitted a paper). Just recording logins is not sufficient.

To increase the accuracy of the Last Day of Attendance determination and to “simplify” processes, the Department originally proposed that institutions be required to take attendance for all distance education programs. For week two, they changed that requirement to have attendance taken for all distance education courses. Additionally, if a student does not “attend” for 14 days, the institution is to begin procedures to withdraw the student.

textbox: Proposal:
For students not “attending” for 14 days, the institution begins withdrawal procedures.

Negotiators have not extensively discussed this issue and do seem to lean towards adopting it. Meanwhile, we have heard significant questions and concerns suggesting this may not truly “simplify” the process. We also have heard that it is not uncommon for adult students to stop out for 14 days and still finish classes.

NASFAA also heard of the need for more work from financial aid administrators. If adopted, there will most likely be significant guidance needed from the Department about how to comply.

Accreditation – Substantive Change for Distance Ed; Outsourcing Instruction

Department of Education’s “Accreditation” Issue Paper Week 2

Substantive Changes 34 CFR 602.22

Relative to institutions serving students by distance education the most relevant sub issue is the lengthy substantive change regulation which includes three subsections of note:

Textbox: Return to old 50% substantive change standards for distance ed accreditation reviews.

First, the Department proposes that the institution must seek approval from their accreditor of a substantive change upon an institution for approval for distance education when it meets or exceeds the 50% threshold of distance education programs. The institution:

  • Offers at least 50% of a program through distance education, or
  • Enrolls at least 50% of its students in distance education, or
  • Offers at least 50% of its courses through distance education.

This subsection proposal offered language that did not change from week one to week two. We concur with this language as a return to the prior guidance that had been rescinded in Fall 2020.

Second, that the institution adds any non-degree or degree-granting program at a level not previously offered by the institution.

Textbox: Proposal:
Additional oversight requirements for outsourced instruction.

Third, when entering into a “written arrangement” with an ineligible institution or organization that offers more than 25% and up to 50% of one or more of the accredited institution’s educational programs, the Department proposes that the agency evaluate the arrangement to meet certain standards. The minimum standards include:

  • Assessment of the ineligible institution’s or organization’s administrative and financial capacity and
  • Expertise to deliver the portion of the program provided under the arrangement.

This subsection was the subject of a robust discussion among the negotiators. The accreditation negotiator stated that the proposed standards are the responsibility of the institution with accreditor review. Additionally, some negotiators appeared to broaden the view beyond instruction to other activities of ineligible parties, such as providing recruiting. This discussion was reminiscent of the expansion of the definition of Third Party Servicer (TPS) and OPM discussions from winter of 2023. This is an area to watch in week three.

Distance Education – Disallow Asynch Courses for Clock Hour; Create a “Virtual Location”

Department of Education’s “Distance Education” Issue Paper Week 2

Definitions 34 CFR 600.2 – End the ability for institutions offering “clock hour” financial aid to offer asynchronous programs

Most traditional institutions grant aid based on credit hours. Another method is through the use of “clock hours.” This is typically reserved for institutions offering practical programs, such as auto maintenance, cosmetology, and massage therapy. For institutions that use the clock hour method of delivering financial aid, the Department proposes disallowing aid for asynchronous distance education programs. This was not changed from week one.

Textbox: Proposal: “Clock hour” programs could no longer be taught asynchronously.

There was some frustration that requests for more information and data on the prevalence of asynchronous clock hour instruction and related compliance problems. It also seemed to be clarified that the practice would not be allowed for hybrid “clock hour” programs.

NOTE: If your institution is a clock hour program, tell us the impact this proposal will have as this one appears ready to be adopted unless there is more evidence of negative impact.

Remember that this WILL NOT have an impact if your institution offers your programs using credit hours.

Definitions 34 CFR 600.2 – Classify all distance education programs as a “virtual location”

For higher education Title IV financial aid purposes, in-person courses are offered either at a “Main Campus,” a “Branch Campus,” or an “Additional Location.” These are official Departmental categories.

They want to add a new “Additional Location” category called a “virtual location” for all programs “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.”

A big benefit would be protecting students if the institution decided to shutter all of its distance education programs. Students would be eligible for financial aid relief benefits as if the entire institution closed. The Department also said that the changes will allow them to collect more data on distance education program outcomes. We have long been an advocate for more data, but we do worry about simplistic research that focuses on modality as the cause of differences in outcomes without considering other underlying factors.

Next Steps

Watch for additional information from us in the coming weeks. The third and final week of negotiations will be March 4-7. We wonder how they will get through all the considerations because they have not yet started to review the work of the TRIO subcommittee.

There are ways to lend your voice to the conversation if you support or have concerns about the proposals. Briefly:

  • You can sign up to provide a public comment for week three by contacting  negreghearing@ed.gov. Do so early in the week as they will be wrapping up issues. Slots are limited to only 9-10 commenters per day.
  • Here is a list of the negotiators. They deserve thanks for their hard work!!
  • Contact us with your questions, concerns, or support for proposals.
  • Finally, for some of the big issues, we may need to get your Senators or Representatives to start asking questions of the Department. Start talking to your government relations staff about this.
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Seismic Shifts in Distance Ed Regulations: Gauging Department of Ed Rulemaking

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Continue to watch for more information from WCET and SAN. Some of it will be member-only information.

Finally, stay engaged! We are not kidding when we say that there are some major changes that are under consideration.


Van Davis

Chief Strategy Officer, WCET


vdavis@wiche.edu

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Cheryl Dowd

Senior Director, State Authorization Network & WCET Policy Innovations


cdowd@wiche.edu

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Russ Poulin

Executive Director, WCET & Vice President for Technology-Enhanced Education, WICHE


303-541-0305

rpoulin@wiche.edu

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