Less than a month after issuing final regulations on financial value transparency and gainful employment, the Department of Education pre-published supplemental rules to address the agency’s concerns over institutional accountability and consumer protection. The 700-page regulatory package, which will go into effect on July 1, 2024, addresses numerous issues of critical importance to institutions of higher education, including, but not limited to:

• Financial responsibility;
• Transcript withholding;
• Compliance with state laws governing licensure requirements and closures;
• Career services;
• Financial aid disclosures;
• Teach-out plans for colleges at risk of closure; and
• Ability to benefit.

NAICU is conducting an in-depth analysis of the rules and their impact on the private, nonprofit sector. More information will be provided as soon as that analysis is complete. In the meantime, the Department has provided a fact sheet summarizing the major provisions in the final regulations. 

The Department outlined its goals in a press release, saying that the new rules “will strengthen [its] ability to protect students and taxpayers from the negative effects of sudden college closures, will restrict colleges from withholding course credits paid for with Federal money from students’ transcripts, and require colleges to clearly communicate to students how much financial aid they will receive—a common source of confusion and error. The regulations … directly answer President Biden’s agenda to make college more affordable, hold colleges accountable, and protect taxpayers and consumers.”

The new rules have a somewhat confusing history. The regulations stem from the negotiated rulemaking on Institutional and Programmatic Eligibility that concluded in March 2022. In May 2023, the Department issued a massive set of proposed regulations that addressed financial value transparency and gainful employment, as well as the provisions contained in the rules released this week. Concerned that the entire package would not be ready for release before the anticipated government shutdown on September 30, the Department split the package into two sets of final rules.

The first set of final rules – on financial value transparency and gainful employment – was published in September 2023 to ensure they would go into effect next year. (HEA Title IV regulations must be released by November 1 in order to go into effect on the following July 1.) When the government did not shut down, the Department was able to publish the second set of final rules this week, ahead of the November 1 deadline.