With the Department of Education's (ED) announcement on Monday that 2016 final rules on state authorization took effect—by court order—on May 26, 2019, and that California specifically does not meet the regulatory requirements in the final rules for students enrolled in distance education or correspondence programs, schools are left with a lot of questions.
First among those is whether schools need to retroactively apply these regulations to past disbursements dating back to May 26 for students who are enrolled in distance education or correspondence programs and live in states that are not compliant with the new regulations. For example, California does not meet the requirement for its residents enrolled in distance education or correspondence courses at out-of-state public or nonprofit institutions, according to ED.
While ED’s notice makes clear that schools should not make any additional disbursements to ineligible students, it is unclear whether schools need to retroactively return funds for disbursements already made prior to ED’s announcement going back to May 26. NASFAA has posed this—and other questions—to ED officials. According to ED's Questions and Answers document, the agency "anticipates updating these questions and answers on an ongoing basis."
Stay tuned as NASFAA continues to publish updates.
Publication Date: 7/24/2019