By Hugh T. Ferguson, NASFAA Senior Staff Reporter ,  Jill Desjean, Senior Policy Analyst

The Department of Education (ED) on Wednesday worked through another pair of issue papers during its third day of negotiated rulemaking (neg reg) for issues related to the Return of Title IV funds (R2T4) and accreditation.

ED proposed eight changes in total to the R2T4 regulations, all of which were met with general agreement from the committee.

First, ED proposed to allow students who receive a credit balance refund within 10 days of the start of classes, but who never begin attendance, to repay any loan funds advanced to them under the terms of the promissory note as opposed to the current rules which make those funds repayable immediately.

ED moved on the R2T4 for programs offered in modules, on which it proposed several changes. First up was a proposal to remove the 49% completion of the payment period provision for determining whether a student had earned 100% of their Title IV funds for a payment period offered in modules during which the student withdrew. ED would retain the provision that a student is considered to have earned 100% of their aid if they completed coursework in modules that comprised at least half-time enrollment.

Negotiators recognized ED’s attempt at simplifying the R2T4 regulations, but argued that the 49% completion provision benefits students and urged the department to issue more guidance to help schools better understand the provision over eliminating it.

Next up was a proposal for R2T4 relief for institutions that offer generous tuition refund policies. Under the proposal, institutions that treat students who withdraw as if they had never attended the term, refund 100% of institutional charges, return 100% of Title IV aid, and cancel student debts to the institution would no longer be required to calculate the amount of Title IV aid the student had earned. This proposal was met with general support from negotiators.

Another proposed R2T4 exemption applies to incarcerated students enrolled in Prison Education Programs (PEP) who are forced to withdraw due to circumstances beyond their control, like transfer to another carceral facility or lockdown. ED indicated it was still working through its legal authority on this proposal, but still wanted negotiator feedback. Negotiators were generally supportive, but concerned that students in these situations were still using their Pell Grant lifetime eligibility and urged the department to consider a way to keep Pell funds received in such instances from counting toward the lifetime Pell limit.

Negotiators next discussed a proposal that codifies a longstanding practice by which institutions that are required to take attendance must make a determination of unofficial withdrawal within 14 days of when the student ceased attendance.

ED then moved onto an R2T4 proposal for students enrolled exclusively in distance education for a payment period. ED argued that institutions have tools available to them to measure engagement in academic activity for distance education courses, which in essence makes all distance education courses attendance-taking courses, regardless of whether the institution is required to take attendance. As such, in those cases where students are enrolled exclusively in distance education, ED would require institutions to determine the date a student withdrew per the rules for attendance-taking institutions.

ED also proposed to eliminate the use of the cumulative method of determining the percentage of the payment period a student completed for R2T4 purposes for clock-hour programs, retaining only the payment period method.

To wrap up the morning session and the R2T4 topic, ED proposed to eliminate the concept of a “freeze date” for determining withdrawal date for programs offered in modules. Under the proposal a module would be considered “part of the payment period so long as a student attends the module.”

The afternoon session began with a section-by-section overview of the accreditation issue paper, and included a number of questions for discussion throughout in order to garner additional conversation.

ED indicated that Thursday’s session would be an extensive discussion of regulatory text, while Wednesday would be focused more on the concepts.

Under accreditation, ED is seeking to achieve four key goals: bolstering robust accreditation and oversight of postsecondary educational institutions and programs; implementing a process that focuses on areas of the greatest risk among accrediting agencies and their reviews; increasing the rigor of the accreditation process; and strengthening accreditation as a critical pillar of the regulatory triad.

As a part of the regulations, ED is also looking for ways to simplify, clarify, and streamline regulations to better meet the department’s goals.

The committee then turned to a proposal that seeks to limit public membership on accreditation decision-making bodies to include only individuals who are independent from agencies, associations, and institutions.

Here the department lists a number of individuals who would be excluded from participating as a public member to include:

• Current or former employees, members of the governing board, owners, shareholders of, or consultants to accredited, pre-accredited, and applicant institutions or programs; 

• Current or former members of any trade association or membership organization related to, affiliated with, or associated with the agency; 

• Current or former employees of, or consultants to, the agency; or 

• Members of the program integrity triad.

Negotiators expressed concern with how overly broad the exclusions were and how they could lead to blanket bans that could deprive skills, knowledge, and coordination. Members urged the department to consider some sort of time frame between when a public member could work in the roles ED seeks to prohibit and when those individuals may participate on accreditation boards, which ED agreed to explore.

The committee also urged the department to consider inclusionary language instead of exclusionary language, which could help to better define the role of public members.

In order to better assess risk associated with accreditation and better prioritize reviews, ED is also seeking to “require that the accreditor provide verified documentation of the number of accredited institutions or programs that participate in the established non-HEA programs, including the amount of Federal funding the programs or institutions receive using the agency as a Federal link.”

ED also looks to reinstate requirements that an agency be “widely accepted” as a reliable authority regarding the quality of the education provided by the institutions or programs the agency accredits. Further the department is also looking to include language that would require accreditors to take action more quickly when they identify areas of non-compliance.

ED then posed questions for discussion concerning whether the department needed to capture instances of significant risk.

The department still had remaining sections of the issue paper left for discussion, along with a number of questions for discussion for negotiators to review before embarking on the regulatory text that is expected to take up the bulk of Thursday's session.

During the public comment period, participants detailed their experiences with postsecondary programs, urged the committee to tackle regulations that would prevent abrupt school closures, experiences related to the cash management issue paper, and additional experiences with the accreditation landscape.

The committee will reconvene on Thursday to discuss the final issue paper on accreditation regulatory text.

Publication Date: 1/11/2024

Comments Disclaimer: NASFAA welcomes and encourages readers to comment and engage in respectful conversation about the content posted here. We value thoughtful, polite, and concise comments that reflect a variety of views. Comments are not moderated by NASFAA but are reviewed periodically by staff. Users should not expect real-time responses from NASFAA. To learn more, please view NASFAA’s complete Comments Policy.