What Schools Need to Know About Adding a New Program

During the NASFAA Conference, the Department of Education (ED) identified the provisions governing the approval of new programs that were vacated by the June 30, 2012 U.S. District Court ruling.  ED also reviewed requirements for reporting and obtaining ED approval of new programs that remain in place after the ruling.

The vacated provisions are in sections 600.10(c) and 600.20(d) of the Institutional Eligibility Regulations and relate to the approval of new GE programs.  That is, if ED approval of a new GE is required, the school:

  • Does not have to notify ED at least 90 days prior the program’s first day of class;
  • Does not have to submit a completed Notice of Intent when requesting the program’s approval; and
  • Always must wait for ED’s approval of the program before disbursing Title IV funds to students enrolled in the program.

What the court ruling left in place are the regulations governing the reporting and approval of new programs that were in effect during the 2010–11 award year. NASFAA members can find those requirements in the 2010 Edition of NASFAA’s Compiled Title IV Regulations on the NASFAA website under the Members tab, Professional Practice Tools, Compiled Title IV Regulations. In addition, the guidance for reporting and obtaining approval of new programs in the recently released Volume 2 of the 2012-13 FSA Handbook reflects the effects of the court’s ruling. 

ED approval of a new program is not required if school is fully certified to participate in the Title IV programs and the new program:

  • Leads to a degree and ED already has approved the school to offer that level;
  • Prepares students for gainful employment in the same or related occupation an educational program that ED has previously designated as an eligible program; and
  • Is at least 10 weeks as well as 8 semester hours, 12 quarter hours, or 600 clock hours in length.

ED approval of the new program is required if the program does not meet the above conditions or  is a direct assessment or a comprehensive transition and postsecondary training program. In addition, ED approval of a new program is required if the school is provisionally certified or subject to the two-year rule.  For a provisionally certified school, the school’s program participation agreement (PPA) contains a growth restriction and ED checks whether the provisionally certified school is financially and administratively capable of handling a new program. If a school is subject to the two-year rule, the school must document that, for at least two years, the school has been legally authorized to offer the program and has done so. 

If ED approval of the new program is not required, the school may make its own determination that the program is an eligible program in accordance with the requirements in section 668.8, disburse Title IV to students enrolled in the program, and report it during its next recertification. The school can choose to report the program before its next recertification. Should  the school incorrectly determine that the program is an eligible program, the school is liable for all Title IV it disbursed to students enrolled in the program. Given the potential liabilities of incorrectly determining a program’s eligibility, it is to a school’s advantage to report the program when the school first plans to offer it. 

ED looks at all new programs schools report regardless of whether ED approval of the program as an eligible program is required. If approval is not required, ED checks whether the program meets basic program eligibility requirements. If the program is a new GE program for which ED approval is required, ED’s review of the new program includes whether:

  • Accrediting agency and/or state agency approval information matches information reported on the school’s E-App (e.g., the program’s name and length should be the same);
  • The program’s Classification of Instructional Programs (CIP) code is consistent with the program’s name;
  • The program leads to a recognized occupation;  
  • Program information reported on the E-App is consistent with information reported to IPEDS;
  • The program satisfies minimum program length requirements in 668.8; 
  • The program satisfies, if required, credit-/clock-hour conversion requirements in 668.8(k) and (l); 
  • The program meets the requirements in 668.8(e) if applicable (i.e., program has been existence for at least one year and has at least a 70 percent completion rate and placement rate); and
  • The program, if required by 668.14(b)(26), does not exceed by more than 50 percent the minimum number of clock hours established by the state for training in the occupation for which the program prepares the student.

Schools should note the E-App currently does not request a program’s Standard Occupational Classification (SOC) code(s); however, the school may enter that information in Question 69 of the E-App. Also, the changes made by the October 29, 2010 final rules to the credit-/clock-hour provisions in 668.8(k) and (l) still are in effect.

If a school has questions about adding a new program, the school is encouraged to contact its ED School Participation Team. Contact information for School Participation Teams is available at  http://www.eligcert.ed.gov.

 

Publication Date: 8/6/2012

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