The Program Integrity Issues Negotiated Rulemaking (negreg) Committee discussed several more of the 14 integrity issues it will cover this week. Wednesday's discussions finished the topic of incentive compensation begun the day before, then moved on to state authorization, verification, and agreements between higher education institutions. This is the first round of program integrity negreg meetings where panelists discuss issues and possible solutions in general terms. Negotiators will discuss draft regulatory language proposed by the Department during subsequent negreg meetings.
State Authorization
Negotiators discussed whether institutions should be allowed to participate in the Title IV programs if the state in which they are located does not license or otherwise act to authorize institutions to offer post secondary programs in the state. Most negotiators seemed to agree that Title IV aid should not be withheld from institutions in a state that abdicates this responsibility. Some of these negotiators argued that there is wide variation in state approaches to authorization because states handle these issues in the way that suits them best. They also noted that some of the functions of the state authorization system are performed by the accrediting agencies. Some negotiators contended that the Department should not infringe on states' rights by attempting to regulate state authorization.
Other negotiators argued that the inconsistency in state authorization created gaps in consumer protections and this issue needs to be addressed. These negotiators argued that the law creates three levels to ensure schools are legitimate for purposes of Title IV program participation and receipt of federal student aid funding -- accreditation, state authorization and ED's Title IV program eligibility certification. Without the state authorization piece, the law is not being followed. They also noted that state authorization helps create a level playing field for schools within the state. While accrediting agencies have an important role, their role is different than state authorization. These negotiators suggested that the Department might consider federal regulatory alternatives to state authorization for institutions in states that don't have a sufficient authorization process under existing rules.
The panel also discussed whether the Department should set federal minimum standards for state authorization. Most negotiators generally agreed that this was not the proper role for the federal government and some questioned if the Department had the legal authority to set such standards. One negotiator also noted that implementing a federal standard for state authorization would likely require statutory changes and would be a substantial administrative burden for state agencies and institutions.
Verification
The panel agreed that the Department should look at ways to improve as well as update the verification process. They noted that the current verification system represents a large administrative burden for institutions and urged the Department to explore ways to lessen this burden. One negotiator said that verification is a balance between protecting taxpayer funds and providing access to higher education. The negotiator urged the Department to not create any additional burdens for low-income students if they revised the verification regulations.
The panel also suggested some additional potential verification items. One negotiator suggested dependency status as a possible verification item, either by verifying all dependency status questions or just the questions recently implemented for homeless individuals, emancipated minors, orphans, wards of the court, and individuals in foster care. Another suggested allowing financial aid offices to compare one year's application with previous years' applications to ensure there are not any suspicious changes.
Negotiators generally agreed that the Department should revise regulations to say that the Department will specify on a student-specific basis which data items must be verified for an applicant on that applicant's ISIR instead of specifying that the same standard set of five items, as applicable, must be verified for all selected applicants.
The panel also suggested some additional potential verification items. Two negotiators suggested dependency status as a possible verification item. Some suggested building into the system a cross-year comparison to identify inconsistent data from year to year.
The Department asked the panel if all first time applicants should be verified to help first time students through the process and reduce the need for verifying their applications in future years. Some negotiators said the Department shouldn't require this because it would be a significant burden for institutions with no real increased returns and could create an additional barrier to college access. One negotiator suggested a pilot program to determine how effective this approach would be. One negotiator insisted that such a proposal be considered only after data has been provided which justifies both the need for and the effectiveness of full verification of first-time students. The definition of -- first-time student -- would also need to be discussed further.
The provision that institutions are required to verify no more than 30 percent of applicants was originally based on a statutory provision that was subsequently removed from the law but retained by the Department, even though the Department has the authority to require up to 100 percent verification. The Department asked if the 30 percent limitation should be revisited. A Department official noted that institutions are given flexibility to determine what is 30 percent and that sometimes gets them in trouble. Negotiators urged the Department to make it easy for institutions to identify what the selection criteria will be and exactly how many verifications they will have to perform up-front, rather than on a rolling basis throughout the award year. This would make it easier to predict how many students must be verified
The Department asked if the regulations are restructured so that institutions are required to verify fewer data elements, should institutions be required to verify a higher percentage of applicants? School-based negotiator indicated the amount of work involved would not be justified by results. Another expressed concern about the additional burden such increases would cause schools and students, in addition to creating another barrier for some students.
Agreements Between Institutions of Higher Education
The panel discussed whether an institution should be permitted to confer a degree or certificate bearing its name when it has provided none of the instruction and conducted none of the evaluations to determine if the student has satisfied the requirements of an academic program. Negotiators generally advised the Department not to permit this scenario. Several negotiators questioned why this particular issue is on the agenda and what perceived problems or abuses has ED identified as needing to be addressed by new regulations. Offering no specific problems or abuses, Department officials said that they hoped to clarify some existing gray areas in the regulations and identify areas where students fall through the cracks due to these gray areas.
Some negotiators agreed that institutions should be required to provide a least a minimum portion of a program if they are to award the degree or certificate, but others said that this should not be required. Negotiators couldn't provide a minimum percentage of coursework that must be provided by the degree granting institution because they said it varies among different academic programs, institutions, and accrediting agencies. Negotiators also urged the Department to provide flexibility with any new regulations to accommodate the future evolution of new higher education avenues such as technological advances.
Negotiators also discussed whether restrictions should continue to differ between consortium agreements (between eligible institutions) and consortium agreements (between eligible and ineligible institutions).
Coming Up
Over the next two days, Department officials will continue to meet with representatives from the higher education community to negotiate possible regulations on the remaining seven issues identified by the Department and the higher education community.
Negotiators include a NASFAA staff member and three aid administrators nominated by NASFAA. Today's News will carry daily updates of the Program Integrity Issues Negotiated Rulemaking meetings. Please submit any comments you have about the issues to be negotiated to policy@nasfaa.org
Negotiated Rulemaking Media Coverage
Taking on Incentive Compensation Inside Higher Ed
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