By Maria Carrasco, NASFAA Staff Reporter

The Department of Education (ED) on Thursday concluded its negotiated rulemaking session on program integrity and institutional quality, failing to reach consensus with negotiators on state authorization, distance education, and accreditation. 

The session on Thursday began with the negotiators continuing their discussion from earlier on in the week on state authorization. Since Tuesday, ED made several revisions to its proposed regulatory text. 

Gregory Martin, ED’s federal negotiator, noted that this proposal was revised in the hopes of reaching consensus with negotiators. If consensus cannot be reached, ED is not obligated to make the same concessions or include the provisions it will add in the notice of proposed rulemaking (NPRM) or in the final rule.

“To be clear, the compromise proposal does not represent the preferred position of the department,” said Greg Martin, ED’s federal negotiator. “It is not our ideal proposal. It is also likely not your preferred option either. This is what we see as a compromise to the various viewpoints across negotiators that balances those viewpoints with our goals and concerns. We believe these changes shore up some of the holes within the program integrity.”

ED’s compromise position included a threshold for distance education students enrolled in a state, above which institutions would need to obtain direct authorization from the state instead of relying on a reciprocity agreement. That threshold, which had been proposed yesterday and offered up again today, was 500 students in the two most recently completed award years.

While some negotiators pushed back on the 500 student threshold, Martin responded that 500 doesn’t feel like an arbitrary number to the department, and noted that institutions that enroll 500 or more students in a state warrant greater oversight because there is a larger chance those state’s residents could be harmed. He adds that larger institutions will have the resources to navigate the process to get state authorization. 

“We believe this threshold balances our concerns with protecting students, enabling access to distance education, and not putting excessive burden on institutions,” Martin said. “Institutions with a substantial presence in a state warrant greater oversight from this state. We know that requiring small players enrolling small numbers of students in states to obtain direct authorization will be burdensome and put a strain on their limited resources.”

There were other negotiators that were in support of the 500 threshold. Robyn Smith, a negotiator representing legal assistance organizations, suggested that ED shrink the 500 down to around 200 because 500 may be too high of a number for states with smaller populations. 

The negotiators took a consensus check of ED’s state authorization language and did not reach consensus, with several negotiators not in support. 

The committee then moved to the topic of distance education, which they initially discussed on Monday. A big point of discussion on Monday between negotiators and the department was the removal of asynchronous courses from the definition of clock hour, which many negotiators expressed concerns with. 

Dave Musser, deputy director of policy implementation and oversight for ED, reiterated on Thursday that ED does not believe it can make a concession at this time on asynchronous courses, and won’t make changes to its proposed language for several reasons. 

None of the negotiators had any comments on the topic and moved toward a consensus check, with several negotiators not in support. 

The rest of the session focused on accreditation, which the committee began discussing on Wednesday. Throughout the discussion, some negotiators had concerns with the entire proposal from ED, suggesting it may be overstepping its oversight of the accreditation process. 

Some suggested that ED may be creating administrative burden for accreditors and institutions that are already performing well, and may not get to the root cause of institutions which are bad actors and take advantage of students. 

“The question is not whether we need to improve all of the players in this process,” said Jamie Studley, a negotiator representing institutional accrediting agencies. “The question is how. We're talking about ways to get to better results that put our focus, our resources, our volunteers in the right places. … We sincerely need to improve the system and my observation is that accreditors are doing better, faster, stricter.”

However, there were other negotiators in support of ED’s language to ensure more oversight on all accreditors and institutions, including Barmak Nassirian, a negotiator representing U.S. military service members and veterans. 

“The public, and certainly students, have lost faith in accreditation because on the ground, it is actually not doing what it's supposed to be doing,” Nassirian said. “It is supposed to weed out the worst actors. … They're generating a lot of hardship. It just breaks my heart when I hear veterans being robbed of all of their GI benefits.”

Toward the end of the discussion and after a 20-minute caucus, ED came back to negotiators with updated language to several provisions. That included an update to ED’s proposal that the majority of the members of an accrediting agency’s decision-making body cannot be executive officers or board members of the agency's accredited institutions, or program. 

ED came back with a definition of executive officer as any non-academic executive role to include the president, chief executive officer, chief financial officer, vice presidents, managing member and general partner of the institution or any entity within it.

Negotiators ended the session with a consensus check on accreditation, where multiple negotiators were not in support and did not reach consensus.  

The committee did not reach consensus on several topics, including return of Title IV funds (R2T4), distance education, state authorization, cash management, and accreditation. The committee did reach consensus on federal TRIO programs. 

Because the committee did not reach consensus on several topics, ED is not obligated to maintain provisions proposed in the draft text. But, since the committee reached consensus on federal TRIO programs, the regulatory text ED publishes in its proposed rule will reflect the language the committee agreed to. 

As a reminder, once ED publishes a proposed rule there will be a public comment period before a final rule is issued. If the final rule is issued before Nov. 1, 2024, the rule will take effect July 1, 2025. Stay tuned to Today’s News for more on negotiated rulemaking.

Publication Date: 3/8/2024

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