Analysis: Proposed Changes to Institutional Eligibility, General Provisions, Byrd Scholarship Program in ED's Recent NPRM

By Jill Desjean, NASFAA Policy & Federal Relations Staff

Last Wednesday, the Department of Education (ED) published in the Federal Register the first Notice of Proposed Rulemaking (NPRM) to come out of the 2018-19 negotiated rulemaking session. While the negotiations covered a broad swath of topics, this first NPRM covers only accreditation, state authorization, and the Robert C. Byrd Honors Scholarship Program. As a reminder, consensus was reached by the negotiators on all of the topics covered by the negotiations, meaning that ED must adhere to the regulatory language agreed upon at the conclusion of negotiations.

Future NPRMs will include proposed regulatory language for the other topics covered in this rulemaking session, which include the Teacher Education Assistance for College and Higher Education (TEACH) Grant program, distance education, and faith-based entities. NASFAA published a previous article earlier this week on the provisions related to ED's recognition of accrediting agencies. This article will focus on changes to institutional eligibility, the student assistance general provisions, and the Robert C. Byrd Honors Scholarship; watch Today's News for a separate article covering state authorization later this week.

Proposed Changes

Definitions (34 CFR 600.2)
ED proposes the addition of a definition of "additional location" as a facility geographically apart from an institution's main campus where the institution offers at least 50% of a program. ED also proposes a revision of the definition of "branch campus" to note that a branch campus is considered an additional location under the new definition of that term.

The NPRM would adjust regulatory language to add a definition of "teach-out" as a period of time during which a program, institution, or location engages in an orderly closure, or, following closure, when another institution provides the opportunity for students to complete their program. The new teach-out definition will include language stating that eligible borrowers should not be prevented from accessing a closed school discharge in lieu of a teach-out, and that institutions are prohibited from misrepresenting the nature of teach-out plans, teach-out agreements, and credit transfer. The teach-out definition will precede the existing definitions of teach-out agreement and teach-out plan, which will all be moved from 34 CFR 602.3 to 600.2, along with the definition for preaccreditation, for consistency. Finally, the teach-out plan and teach-out agreement definitions are updated to include not only closures, but also plans to cease operations.

A definition of religious mission is proposed to ensure that accrediting agencies can properly distinguish between institutions with only historical connections to religious orders and those with ongoing religious missions, to ensure that accreditors do not consider an institution's religious mission-based activities as a negative factor in applying and enforcing standards.

New Multiple Accreditation Flexibility (34 CFR 600.11)
Under current rules, ED does not recognize the existing accreditation or preaccreditation of an institution if it is in the process of changing accrediting agencies, unless it provides ED with materials related to its prior accreditation, and demonstrating reasonable cause for changing accreditor. The proposed rules tighten language to require not only the provision of the above materials to ED, but also ED's approval, and adds the specific causes that ED would not consider reasonable for changing accreditation, which include the institution having had its accreditation revoked; or having been subject to probation, show cause order, or suspension within the previous two years. Exceptions would apply in cases in which the accrediting agency failed to provide the institution its due process rights, to apply standards consistently, or to respect institutional mission.

Multiple accreditation could be permitted under the proposed rules in instances in which the institution's primary reason for seeking multiple accreditation was based on the agency's geographic area, program area focus, or mission.

ED notes in the NPRM that it seeks public comment on whether the multiple accreditation and changed accreditation requirements should be aligned, citing differences in the provisions due to discussions on the two topics having taken place separately during negotiations.

Additional Locations (34 CFR 600.32)
The proposed rules seek to amend current regulations that require a two-year waiting period for institutions to gain eligibility for additional locations in cases in which the additional location was acquired after a closure, and the closed institution owes a liability for a violation of a Higher Education Act (HEA) program requirement. Currently, the exception to the two-year rule applies only when the acquiring institution agrees to be liable for all improperly expended or unspent Title IV funds received by the closed institution. ED seeks to limit the acquiring institution's liability for improperly expended HEA funds to only those funds received during the current academic year and up to one academic year prior. This would apply only in instances in which the applicant institution and the original institution are not related parties and there is no commonality of ownership, control, or management.

Student Assistance General Provisions (34 CFR 668)
ED proposes to add new language to 34 CFR 668.26 that would permit institutions under certain circumstances to continue to award and disburse Title IV aid for 120 days after ending participation in the Title IV aid programs. ED's goal is to permit institutions to teach-out their own students who are near completion of their programs of study to minimize disruption for those students.

ED proposes to remove from 34 CFR 668.41 the requirement that schools disclose internally-calculated placement rates, replacing it with one that requires disclosure only when that rate is published or used in advertising.

Several disclosure requirements under 34 CFR 668.43 are changed or added. The proposed regulations add a requirement for institutions to disclose whether programs meet licensure or certification requirements for each state, or to disclose that they had not made a determination about whether the program met state requirements. The proposed regulations would add to the existing credit transfer disclosure requirement; adding that institutions must now disclose the institutions or sources of credit that they will not accept for transfer. Institutions would also now be required to disclose how they evaluate credit for prior learning. Also added are requirements to disclose whether and why an institution is required by its accreditor to maintain a teach-out plan, and whether it is aware of any ongoing legal action related to academic quality, misrepresentation, fraud, or other severe matters.

In addition to the public disclosures listed above, direct disclosure to prospective students would be required if an institution determined that a program didn't meet state licensure or certification requirements or the institution hadn't determined whether the program met those requirements, based on the state where the student is located. For currently enrolled students, institutions would have 14 days to directly disclose that they had made a determination that a program did not meet state licensure or certification requirements for the state in which the student is located.

Lastly, ED proposes to remove all language in 34 CFR 654 related to the Robert C. Byrd Honors Scholarship Program, citing lack of appropriations for the program since fiscal year 2012 and the unlikelihood of its receiving future funding.

Comments are due to ED on July 12, 2019, after which ED will review and respond to comments received and publish final rules. In accordance with master calendar rules, if final rules are published by Nov. 1, 2019, the rules will go into effect on July 1, 2020. NASFAA is interested in your thoughts on this topic. Please provide feedback to NASFAA at [email protected].


Publication Date: 6/19/2019

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