ED Continues Neg Reg Session With Discussion on State Authorization and Distance Education

By Maria Carrasco, NASFAA Staff Reporter

The Department of Education (ED) on Tuesday continued its negotiated rulemaking session on program integrity and institutional quality, gathering stakeholders to discuss the topics of state authorization and distance education. 

While Monday’s session focused on cash management, Tuesday’s session began with negotiators discussing ED’s updates to the draft regulatory text on state authorization. The updates to the text were made after the first session in January.

ED added regulatory language related to its discussion questions from the first session to address state exemptions from state authorization requirements, based on accreditation status or having been in operation for more than 20 years. New language would phase out such exemptions by 2030.

The discussion then moved to the topic of states’ “education-specific” laws. ED asked negotiators to think about what defines an education-specific law, and to provide feedback. Federal negotiator Gregory Martin noted that ED received a proposal from negotiators to allow states participating in a reciprocity agreement to enforce their own education-specific laws.

Carolyn Fast, representing civil rights organizations and consumer advocates, was a negotiator that wrote that proposal. Fast said that negotiators are concerned with only permitting states to enforce their general purpose consumer protection laws, but prohibiting them from enforcing anything else. Fast said the negotiators used the term “education-specific” because many states have determined it’s important to protect students against predatory and financially unstable institutions and that general purpose laws cannot always do that. 

“States are impeded in their ability to enforce those types of laws by the fact that they are prohibited from doing that with respect to out-of-state schools that are operating in their state under the current NC-SARA guidelines,” Fast said. “It's an issue of making sure that students are able to be protected, and also that there's not different standards that apply to different students enrolled in online programs.”

While ED’s focus is on reciprocity agreements in general, negotiators tended to refer to use of NC-SARA and state authorization reciprocity agreements interchangeably, in light of the fact that 49 states are part of that agreement.

Some negotiators had concerns of creating a provision for states to enforce their own education-specific laws. Robert Anderson, representing state officials, state authorizing agencies, and state regulators of institutions of higher education, shared his concerns with institutions moving to a different system for reciprocity agreements outside of NC-SARA, which he said has worked well for many states. 

“My concern is in search of the perfect, you're going to blow up what has been very solid for states,” Anderson said. “And we're going to be left wondering what's next? How do you build this together?”

Other negotiators were in support of creating a provision to allow states to enforce their own education-specific laws, including Emmett Blaney, representing students or borrowers, who  said NC-SARA has failed students when their institutions shut down abruptly. 

“This shows huge shortcomings of a reciprocity agreement designed to make oversight lighter for schools, rather than protecting students,” Blaney said. “I'm so strongly in favor of the language the department put forward that would allow states participating in a reciprocity agreement to enforce their laws, and protect the residents from predatory practices and institutions.”

The negotiators then moved on to discuss a new provision proposed by negotiators that would require state authorization reciprocity agreements to provide for a “state-led process” in which participating states would propose and adopt policies of the agreement. 

The proposed language also stipulates that a reciprocity agreement must allow any state of the agreement to enforce its own general-purpose state laws and regulations outside of the state’s authorization of distance education. Additionally, the agreement would have to include a process for communicating information about a student’s complaints with the institution to the state. 

ED clarified during this discussion that the term “state-led process” gives the impetus to the state to proceed with the agreement without any interference from any other entities. 

Several negotiators, including Robyn Smith, representing legal assistance organizations, urged ED to create more language in this section to make sure that only state regulators are overseeing and making decisions around any kind of reciprocity agreements. Smith said state regulators are specifically trained to handle these agreements, how to handle investigations, and also have regulatory powers — such as the power to issue a subpoena — and more. 

Tuesday’s session ended with a discussion on distance education. In the issue paper, ED added language to several definitions. For the term “additional location,” ED added language that defined the term as “​​a virtual location through which the institution offers 100 percent of an educational program through distance education or correspondence courses, notwithstanding requirements for students to complete on-campus or residential periods of 90 days or less.” 

The department also removed language from the definition of “clock hour” in distance education,  which would no longer permit Title IV aid to be used for asynchronous learning in clock hour programs. ED’s rationale for this move was a desire to re-establish the distinction between clock hour and credit hour programs, noting their belief that they inadvertently expanded the reach of the Title IV student aid programs when they permitted asynchronous learning for clock hour programs. 

The topic was debated by several negotiators who disagreed, with arguments that emerging technologies could better monitor asynchronous learning as well as a desire to measure outcomes rather than focusing on modalities. A temperature check resulted in several thumbs down.

ED added that it received two proposals from negotiators on how the department could collect data from students in distance education programs. Both proposals would collect data through the National Student Loan Data System. The department currently has only limited data on enrollment in distance education programs since it collects such information only at the institution and program level through IPEDS. 

This neg reg session continues throughout the week, with the committee set to discuss return to Title IV fund (R2T4) and accreditation. Stay tuned to Today’s News for more coverage on the session. Those interested in watching the session can register on ED’s website

 

Publication Date: 2/7/2024


Peter G | 2/7/2024 1:55:08 PM

“This shows huge shortcomings of a reciprocity agreement designed to make oversight lighter for schools, rather than protecting students,” Blaney said.

I'm not sure it's possible to create a framework of this sort that prevents school closures. I'm sympathetic, but I think this misses the point. The consortium framework impacts all institutions, even those at low/no risk of closure. Even as is I would definitely not describe the regulatory burden as "light," but expanding it is unworkable as there is no infrastructure for it to work.

There are legitimate concerns about the variance in accreditation and state standards, but I don't think ED (certainly not current-ED) has the deftness to use this issue to wrangle 50 states and countless other localities into submission as much as they would like it to. And designing to create a morass just because one doesn't like that reality isn't exactly good public policy.

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