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 previous articles earlier this week on the provisions related to ED’s recognition of accrediting agencies and on changes proposed to the student assistance general provisions, institutional eligibility, and the Robert C. Byrd Honors Scholarship Program. This final article will focus on changes to state authorization.
This most recent negotiation of state authorization caps off nearly a decade of negotiations, delays, and lawsuits on the topic, beginning in 2010 when ED first issued rules that defined minimum requirements under which a state’s authorization for a school to operate within its borders is acceptable for institutional eligibility to participate in the Title IV programs. Following implementation delays and court decisions vacating portions of the rules, state authorization was then negotiated in 2014 under the Obama administration and published as part of the 2016 Program Integrity and Improvement rules. Originally set to go into effect on July 1, 2018, ED subsequently announced a delay of certain provisions relating to state authorization until July 1, 2020. Subsequently, the court in National Education Association v. DeVos vacated the delay, with an effective date of May 26, 2019.
In this round, the negotiating committee agreed to maintain the same definition of “state authorization reciprocity agreement” (SARA) as the 2016 regulations, which includes the provision that a reciprocity agreement, in order to meet the requirements for state authorization for the purposes of Title IV eligibility, cannot prevent a member state from enforcing its own laws and cannot result in a conflict between state laws and the reciprocity agreement. The group agreed to this definition, however, only after lengthy discussions over issues with the current National Council for State Authorization Reciprocity Agreements (NC-SARA) framework, and whether the federal government has a role in regulating arrangements like SARA. As a compromise to reach consensus, the group agreed that a separate convening with the State Higher Education Executive Officers (SHEEO), American Council on Education (ACE), legal aid representatives, veterans groups, NC-SARA, and ED would be held at a later date to discuss and make changes to SARA.
In 34 CFR 600.9 in the proposed rules, ED seeks to change the language for institutions offering distance education to students outside of the state where it is physically located. In current regulations, the determination of whether distance education students are considered to be outside of the state where the institution is physically located is based on the student’s residence, which is a term that can vary both by state and even within states for different purposes. ED proposes to replace the term “residence” with “location,” and would require institutions to have a process by which they determine a student’s location. This determination would have to be made at the time of initial enrollment and upon formal receipt of information from the student that their location had changed.
The proposed rules remove all existing regulatory language in 34 CFR 600.9(c)(2) relating to a student complaint process for distance education programs, on the basis that current § 600.9(a)(1) addresses complaint processes, and the regulations under § 668.43(b) already require institutions to disclose the complaint process in each of the states where its enrolled students are located. The change also addresses concerns for California students enrolled in distance education programs, since that state’s lack of a state complaint process could have made its students ineligible for Title IV aid for distance education under the 2016 rules.
Comments are due 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@example.com.
Publication Date: 6/20/2019