NASFAA Submits Comments on Proposed Distance Education and Innovation Rules

By Jill Desjean, NASFAA Policy & Federal Relations Staff

NASFAA on Monday submitted comments on the Department of Education's (ED) proposed rules on distance education and innovation. Many of the proposed changes fall in line with NASFAA's Modernizing Title IV Aid task force recommendations.

The rules, published on April 2, are ED's final set of proposed rules coming out of negotiated rulemaking sessions conducted over the winter and spring of 2019, which ended in consensus, meaning the proposed language is the language negotiators agreed to. ED published final rules on accreditation and state authorization on Nov. 1, 2019. Those rules are effective July 1, 2020, although some provisions were eligible for early implementation. ED published proposed rules on the Teacher Education Assistance for College and Higher Education (TEACH) Grant program and faith-based entities last December, but has not yet issued a final rule.

ED's stated intentions in this latest proposed rule include updating the regulations to address new education delivery modalities and technologies that did not exist when the current rules were written, as well as including flexibility in the regulations to anticipate and accommodate changes that are yet to come.

Key changes in the proposed rules include:

  • Requiring institutions to obtain ED approval only for the first direct assessment (DA) program at each credential level. Currently every DA program offered by an institution requires ED approval.

  • Adding a definition for subscription-based programs and updating disbursement, Satisfactory Academic Progress (SAP), and return of Title IV funds (R2T4) rules to accommodate that new definition.

  • Allowing students enrolled at a foreign institution to complete up to 25% of a program at a U.S. institution and clarifying the conditions under which foreign institutions can enter into written arrangements withTitle IV-ineligible entities.

  • Changes to R2T4 regulations for when a student is considered to have withdrawn for students who complete graduation requirements earlier than anticipated in non-term and subscription-based programs, and for students in modular programs.

  • Changes to how institutions can calculate the quantitative component of the SAP calculation.

  • Codifying current ED practice that the Secretary may deny an institution's application for certification or recertification for Title IV eligibility if the institution is not financially responsible, or does not submit its audits in a timely manner.

Direct Assessment Programs

Presently, ED requires an institution to obtain approval for every DA program it offers. The proposed rule is to require approval only for an institution's first DA program and then for subsequent DA programs at higher credential levels, based on the assumption that an institution's demonstrated capacity and expertise to offer a DA program translates to all DA programs at that credential level and at lower credential levels, but not necessarily to higher credential levels. The proposed changes align with recommendations made by NASFAA's Modernizing Title IV Aid to Encourage and Accommodate Innovation in Higher Education task force in 2019.

Subscription-Based Programs

The proposed rules add a definition of a subscription-based program, which does not currently exist. The definition specifies that a subscription-based program can be a standard or non-standard term program in which students enroll in subscription periods for a set number of credits, to be earned at the student's pace. 

Because there was no definition of subscription-based programs in the regulations, there were also no specific disbursement rules associated with these programs. As a result, institutions had to fit subscription-based programs into existing disbursement methods — treating them either as standard or nonstandard terms, or as non-term programs. Each had its limitations. Using standard or nonstandard term disbursement rules, in which the term is the payment period, institutions had to set a begin and end date within which students had to demonstrate competency. Using non-term disbursement rules allowed for more flexibility within which students could demonstrate competency, but the requirement that subsequent disbursements could only take place after a student had completed both a set amount of coursework and half of the period of enrollment often left students who progressed more quickly waiting on disbursements and unable to enroll in the next subscription period. 

The proposed rules effectively set the subscription period as the payment period for these programs. When the student has passed a specified portion of their enrolled competencies, they are eligible for their next disbursement, regardless of the amount of time elapsed. This change is intended to allow students to truly work at their own pace, even permitting competencies to overlap payment periods, which is limited by current disbursement rules. This change is also in the spirit of NASFAA's Modernizing Title IV Aid task force recommendations, which argued for better alignment of subscription-based disbursements with students' needs for funds.

Determining Whether a Student Has Withdrawn for R2T4 Purposes

ED's proposal includes changes to the rules governing when a student has withdrawn for purposes of the R2T4 calculation, another of NASFAA's Modernizing Title IV Aid task force recommendations. Students in self-paced programs who complete graduation requirements before completing the days or hours in the period that they were scheduled to complete would now not be treated as withdrawn students for R2T4 purposes. Students enrolled in modular programs who had completed one or more modules that, together, comprised more than half of the days in the payment period, or who had completed coursework equivalent to at least half-time status would also not be treated as withdrawn.

NASFAA pointed out in its comments a potential issue that was identified after the conclusion of the rulemaking sessions with respect to students enrolled in an even number of modules in a payment period who withdraw after completing half of the modules. NASFAA pointed out that, depending on the placement of scheduled breaks or weekends, half of the number of modules for a payment period could equal less than half of the scheduled number of days, and leave these students to be treated as withdrawn.

With the new subscription-based program definition also comes language specific to these programs with respect to withdrawals. New language in the proposed rule states that students in a non-term or subscription-based program are considered to have withdrawn if they are unable to resume attendance within a payment period or period of enrollment for more than 60 calendar days after ceasing attendance.

NASFAA also pointed out in its comments a potential discrepancy in ED's justification for the proposed changes to 668.22(a)(3)(ii) to include programs offered in standard terms to require students to confirm that they will enroll in another module within 45 days of ceasing enrollment to avoid being treated as withdrawn. The justification cited the unlikelihood that a module in a standard term program would begin more than 45 days following the end of a prior module. However, ED issued a revised policy for standard term lengths after the conclusion of the rulemaking sessions, on November 5, 2019, which now permits standard terms to now be as long as 21 weeks. NASFAA noted that this makes it more likely that 45 days could elapse before a new module could begin.

Satisfactory Academic Progress

With respect to SAP, the quantitative (pace) requirement adds new language as a result of the addition of the definition of subscription-based programs. The proposed language specifies that the SAP pace requirement does not apply to non-term and subscription-based programs, on the justification that students in these programs must complete 100% of their attempted credits to receive their next disbursement already, so there is no need for a separate pace calculation.

The proposed rules also add language that would allow credit hour programs using standard or nonstandard terms to base the maximum time frame pace calculation on calendar time in place of dividing earned credits into attempted credits to arrive at a percentage. Institutions could instead set a minimum number of credits the student has to have earned by a specific point in the student's academic program to assess pace instead.

Comments were due on May 4, 2020. In order to be effective the following July, master calendar rules require final rules to be published before November 1, meaning July 2021 is the earliest these proposed rules could be made effective unless ED authorizes voluntary early implementation.


Publication Date: 5/5/2020

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