Third Day of Neg Reg Session Focuses on Cash Management, Accreditation
By Maria Carrasco, NASFAA Staff Reporter
The Department of Education (ED) on Wednesday carried on its negotiated rulemaking session, which focused on cash management and accreditation.
The negotiators on Tuesday began their initial conversation over cash management. Some of the concerns negotiators shared on both Tuesday and Wednesday stemmed from new language from ED that institutions must require students — except incarcerated students — to opt in to have institutions charge them for their books and supplies, as opposed to current regulatory language that permits an opt-out process.
Jason Lorgan, a negotiator representing public four-year institutions, gave some background from his experience with the University of California, Davis and its experience with opt-in and opt-out models for books and supplies. He and other negotiators were concerned that adding this language would mean students would not have access to the necessary materials they need for their courses.
“In an opt-in model we have found that students are not participating,” Lorgan said. “The institution feels like that is the wrong decision for students to make. And so we're trying to make the default that students have access to content.”
Multiple negotiators on Tuesday and Wednesday warned ED that requiring institutions to have students opt in to be charged for books and supplies could mean a higher expense for students, and missed opportunities. Often, institutions partner with book publishers and other suppliers to make books and supplies available to students at a cheaper price, the negotiators argued.
“My general concern is that we're shifting a model by a stroke of a pen that's going to incur a whole lot of costs and work to the disadvantage of students getting access to content that they need in order to meet their learning objectives, which is all of our focus,” said Scott Dolan, a negotiator representing private nonprofit institutions.
Gregory Martin, the federal negotiator representing ED, said the department does encourage institutions to negotiate the lowest price on books from publishers, and for publishers to offer the lowest price they can, without regard to whether an institution has an opt-in model.
Denise Morelli, from ED’s Office of General Counsel, also chimed in to say that often, when students try to opt out from being charged for books and fees from their institution, the language can be confusing and hidden from the student. She said the department has heard many complaints from students about institutions using hidden opt-out language.
“I just want to keep pointing out it is the student's money – the Title IV funds – for the student to do with what they choose,” Morelli said.
Jillian Klein, a negotiator representing proprietary institutions, noted that several negotiators created a proposal on how the department could create better guardrails on how institutions provide students a clear path to opt out of being charged for books and supplies, and asked why ED did not adopt that language.
David Musser, deputy director of policy implementation and oversight for ED, reiterated the department’s position that the charges for books and supplies should not be lumped in with the tuition fees and they need to be separate. While the department agrees that it can be good for students to get their books directly from their institution, their position is that it must be the student’s choice, and they do not feel that an opt-out option truly provides choice.
ED also confirmed that student authorization to be charged for books and supplies by their institution would have to be collected every payment period, as opposed to other authorizations that are required only once and only become inactive when the student withdraws authorization.
Some negotiators were in support of the language added by ED on book and supply charges, including Carolyn Fast, a negotiator representing civil rights organizations and consumer advocates, who said an opt-out model is a “fundamentally flawed model.”
The negotiators then took a consensus check of the entire cash management issue paper. Multiple negotiators were not in support and the committee did not reach consensus.
The negotiators then moved on to discuss the issue paper on accreditation, with over 60 pages of regulatory text. One change that ED implemented after hearing feedback from negotiators is that the majority of the members of an accrediting agency’s decision-making body cannot be executive officers or board members of the agency's accredited institutions, or program.
Herman Bounds, director of the accreditation group at ED, said the department is looking to strengthen the language around conflict of interest for decision-makers on accrediting agencies. He added that ED is considering executive officers as presidents, chief executive officers, chief financial officers, and vice presidents.
Some negotiators expressed concerns that ED may be overstepping its reach by telling accrediting bodies how they need to fill these board seats with their members. Jamie Studley, a negotiator representing institutional accrediting agencies, said she and others were puzzled at what this language is meant to do.
“We need the expertise of senior people who can look at the entire range of an institution's mission, program, finances, sustainability, planning, and governance,” Studley said. “And we need people who are used to making those connections. So provosts, presidents, and chancellors could be very useful in that regard … Letting voluntary agencies determine the balance that we want as long as we meet the standards is unduly restrictive.”
However, some negotiators were in support of the language, including Barmak Nassirian, a negotiator representing U.S. military service members and veterans. Nassirian said the purpose of the language is to fix conflict of interest issues some accrediting agencies have on their boards.
“There are some bad actors out there enjoying the full benefits of accreditation, because they call the shots,” Nassirian said. “The whole thing is a conflict of interest. We’re attempting to change that. Accreditation is voluntary, but it should be subject to certain federal rules per the statutory language if it wants to be recognized by the secretary.”
Another topic negotiators discussed was over accreditation and pre-accreditation standards. Under ED’s changes, the agency's accreditation standards must set clear and effective expectations for institutions or programs.
That means accrediting agencies must identify minimum expectations of performance for institutions, and that may include consideration of state licensing examinations, course completion, and job placement rates. If the accrediting agencies determine that setting minimum expectations of performance is not feasible or appropriate for the institutions or programs it accredits, the agency will need to explain why.
One negotiator asked ED if the department has this authority under the Higher Education Act. The negotiator pointed out that the HEA states that ED may not “establish any criteria that specifies, defines, or prescribes the standards that accrediting agencies or associations shall use to assess any institution's success.”
Bounds said that ED is requiring that agencies set out clear standards, but ED is not determining what those standards are or how the agency would create those standards.
The committee will meet on Thursday to continue the discussion on accreditation. There will also be consensus checks with the negotiators on state authorization and distance education. Those interested in watching the session can register on ED’s website.
Publication Date: 3/7/2024
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