Major Updates

The Department of Education (ED) has released final rules on Ability to Benefit, Administrative Capability, Certification Procedures, and Financial Responsibility. These rules, part of negotiated rulemaking in early 2022, provide new requirements for programmatic accreditation, state licensure, and conforming with state laws when dealing with closure in the context of distance education. The Administration has stated these regulations were developed to protect taxpayers from the negative effects of sudden college closures and students from practices which would make their education less valuable. These rules will become effective on July 1, 2024.

A few of the final regulations that the UPCEA community should review and must comply with:

• The former requirement on distance education programs was to identify for student disclosures those states where the program “meets”, “does not meet”, or “has not been determined” to meet that state’s licensure requirements. In the new rule, if a program is leading to licensure or certification the institution must provide lists indicating which states a program does and does not meet educational requirements for specific professional licenses or certifications. The new rule also eliminates the possibility to indicate that they have not determined this for certain states. Institutions can offer programs to students in states where the program does not meet requirements for licensure or certification if they provide an attestation from the student about their specific intended state of employment.
  • Institutions must notify students if the program’s curriculum does not meet state educational requirements for licensure or certification in the state where the student is located.
  • If an institution can’t determine whether or not their program meets the state requirements for licensure or certification, they cannot offer that program to students within that state.
  • The rule applies to new program entrants on or after the effective date of July 1, 2024, rather than being applied retroactively to students who are already enrolled in these programs.
• One of the ever-in-flux rules for the online education community is determinations of student location for the purposes of distance education eligibility. The term “at the time of initial enrollment” was a point of concern and led to requests for clarification for the purposes of licensure and notifications. The Department clarified and pointed to State Authorization language for institutions , specifically the provision in § 600.9(c)(2)(iii) to determine the location for initial enrollment, and states “an institution must make a determination regarding the State in which a student is located at the time of the student’s initial enrollment in an educational program and, if applicable, upon formal receipt of information from the student, in accordance with the institution’s procedures, that the student’s location has changed to another State” and went on to say they are allowing institutional flexibility to determine how to structure a policy based on determining these changes.
• The regulations require institutions to comply with state laws for any legal requirements related to school closures. The definition of “closure” includes requirements related to record retention policies, teach-out plans and/or agreements, as well as tuition recovery funds and/or surety bonds. The Department believes that this concrete and limited list removes ambiguity and aligns with policies and tools used by states to address closures.
  • There is still some confusion whether these new regulations may apply to schools participating in SARA. All schools may need to comply with each state’s laws in these matters. 

The regulations also have other significant new changes institutions may wish to review, such as restricting colleges’ ability to withhold transcripts for course credits paid with Federal money; and providing clear communications to students about how much financial aid they will receive. Also a new requirement states that within 45 days of the student finishing coursework, the institution must provide geographically accessible clinical or externship options that are required prior to the completion of a program (this does not apply to clinical experiences that occur after graduation, such as medical residencies).

View a full copy of the draft final regulations. The Department also put together their own fact sheet on the regulations, found here.

The Department of Education has stated it will “consider broader issues related to distance education and State authorization in future rulemaking efforts”. So, stay tuned for more proposals and regulations down the road!

Other News

• Student-Loan Wait Time Complaints Prompt Federal Probe (Wall Street Journal)
• List: 23 People Blocked From Federal Financial Aid System (Inside Higher Ed)
• Large-scale student loan debt forgiveness likely off the table in President Biden’s Plan B (USA Today)