The Department of Education kicked off its new Program Integrity and Institutional Quality negotiated rulemaking this week. On the agenda are revisions to the regulations governing accreditation, state authorization, distance education, cash management, return of Title IV funds (R2T4), and TRIO. 

Although many of the proposed changes are reasonable and discussions are in the initial stages, there are several issues that have raised concerns. Among them are:

• State authorization. The Department has issued discussion questions regarding potential changes to current regulations that allow states to exempt institutions from state approval or licensure requirements if the institution is accredited by one or more accrediting agencies recognized by the Secretary of Education and if the institution has been in operation for at least 20 years. NAICU is concerned that altering this exception could potentially cause an enormous amount of upheaval for both states and private, nonprofit institutions by subjecting institutions to a series of state laws that were never intended to apply to them and by forcing states to divert resources that would be better targeted at bad actors. NAICU’s Director of Accountability and Regulatory Affairs, Jody Feder, made prepared comments on this issue during the negotiated rulemaking session.   
• Reciprocity agreements. The Department has proposed amendments to state authorization reciprocity agreements that would: (1) require institutions to have a system to report student complains to the states in which the students reside; and (2) require that the governing board of any entity that oversees a state reciprocity agreement include representation only from state employees and members of the public. NAICU is concerned that these proposed changes could impose a significant burden on institutions and limit the input of distance education stakeholders. 
• Accreditation. The Department has proposed numerous changes to the accreditation regulations, including increasing the number of actions subject to substantive change review and requiring accreditors to act more quickly to address areas of non-compliance. The Department has also posed a series of discussion questions, including, but not limited to, asking how the agency should evaluate the rigor of accreditation standards governing student achievement and other factors, whether the Department can do more to secure orderly teach-outs in the event of closure, and how should the Department ensure that accreditation is voluntary and not required by state law. NAICU is concerned that some of these changes may impose an unnecessary burden on institutions or involve unwarranted federal interference with the accreditation process. 
• Cash Management. The Department has proposed several changes to the regulations governing the management of Title IV funds, ranging from establishing a timeline for institutions on heightened cash management 2 (HCM2) to request final disbursement after losing eligibility, requiring the return of unused meal plan funds to students instead of retaining them, and more. However, the proposal that has garnered the most attention so far is the elimination of the provision that allows schools to include the cost of books and supplies as part of tuition and fees, in what are typically called “inclusive access” programs. The Department is concerned that too many students are unaware of these charges beforehand, and do not know that they can opt out of such programs if they believe they can procure their books and supplies for a lower cost elsewhere. While it is unclear how many institutions utilize these programs, NAICU is concerned that eliminating this provision will effectively eliminate inclusive access programs altogether and believes a lighter touch is preferable, such as strengthening disclosure requirements to ensure students are aware of their ability to opt out. 
• Return to Title IV (R2T4). Most of the Department’s proposals are centered around simplifying the R2T4 calculation process, which is notoriously convoluted and time-consuming. The most contentious proposal would require all distance education courses – not programs – to take attendance to mitigate alleged abuse by bad actors that have used incorrect dates of withdrawal to maximize the amount of Title IV money they keep after a student withdraws. NAICU is supportive of more accurate withdrawal date tracking but concerned that the language proposed by the Department requires the entire institution to take attendance and would like to see more clarity around how the proposed attendance tracking would be used when students are enrolled in in-person and distance courses. 

Other proposals on the table give rise to fewer, if any, concerns. For example, the Department’s only proposal for the federal TRIO programs – Talent Search, Educational Opportunity Centers, and Upward Bound – would expand eligibility for these programs to undocumented students. The Department would also make minimal changes to distance education regulations, including a proposal that would allow the agency to better track the outcomes of distance education students by creating a virtual location for such students.

The Program Integrity and Institutional Quality committee will also meet the weeks of February 5 and March 4.