Proposed Rules Published on Return to Title IV, Distance Education, and TRIO

The Department of Education released the first half of its proposed regulations from this year’s Program Integrity and Institutional Quality negotiated rulemaking. The notice of proposed rulemaking (NPRM) covers proposals for three topics: return to Title IV (R2T4), distance education, and the federal TRIO programs.

Notably, the NPRM does not include the three other topics on the table at negotiated rulemaking, state authorization, accreditation, and cash management. Instead, the Department announced in a blog post earlier this week that a proposed rule with controversial changes to rules governing these issues would be published next year.

The public comment period for the NPRM issued this week will begin once the document appears in the Federal Register in the coming days. If final regulations are issued by November 1 as anticipated, the rules will go into effect on July 1, 2025.

Key provisions in the NPRM include:

Return to Title IV. The NPRM proposes several changes to the R2T4 process aimed at simplifying the formula and codifying portions of the Department’s existing guidance. The provisions:

• Provide flexibility for students who must refund Title IV funds if recipient does not begin attendance. The NPRM would allow a student who received a loan disbursement but never began attendance in a payment period to repay their debt under the terms of their promissory note, instead of current policy, which only permits repayment per the terms of their loan servicer’s final demand letter. This change would allow students to repay these funds over time instead of all at once.

• Create an exemption for early withdrawals. The NPRM would remove the requirement that a school must complete an R2T4 calculation for students that never attended courses, or attended only a few days in a payment period, if the institution:
  • Treats the student as if they never began attending;
  • Returns the student’s Title IV funds for that period;
  • Refunds the student’s institutional charges for that period; and
  • Writes off or cancels any current year balance owed to the institution that results from the return of Title IV funds.

• Codify existing guidance on the deadline to document a student’s last date of attendance. The proposal would codify long-standing sub-regulatory guidance that an institution must document a student’s withdrawal date within 14 days of the student’s last date of attendance.

• Require attendance taking for distance education. The proposal would require courses offered solely through distance education, except doctoral dissertation research courses, to take attendance for the purposes of R2T4 calculations. Meeting the new standard would require satisfying the “academic engagement” definitions under 34 CFR 600.2.

• Establish a single method for calculating the percentage of the payment period completed by students who withdraw from clock-hour programs. When completing R2T4 calculations, institutions must determine how much of the payment period a withdrawn student completed. Current law is silent on procedure, but most institutions utilize one of two options: the cumulative method or the payment period method. The NPRM would require institutions to only use the payment period method, which the Department believes is more accurate.

• Establish a single method for calculating which days to use for students enrolled in modules. The NPRM would require modules to be included as part of the payment period calculation in the denominator only when a student begins attendance in the module. The current method for determining whether to include module days in the R2T4 calculation is complex, requiring analysis of the types of Title IV aid received and whether the institution uses freeze dates – optional, fixed points of time that aid in the R2T4 calculation.

• Provide flexibility for confined or incarcerated individuals returning from leaves of absence. The proposal would allow students enrolled in prison education programs who return from a leave of absence to return to programs at a different point than where they left off. Current law requires these students to restart their programs at the same point they departed.

Distance Education. The Department proposed very limited changes to institutional distance education regulations. The most significant changes would expand the definition of additional location to include virtual locations for online or correspondence courses, require schools to report on their distance education or correspondence courses, and eliminate the ability to offer asynchronous clock hour distance education programs. The changes are intended to provide better oversight of distance education programs.

TRIO. The NPRM proposes to expand eligibility for three TRIO programs – Talent Search, Educational Opportunity Centers, and Upward Bound – to all students who have enrolled in or who seek to enroll in a high school in the United States, territories, or Freely Associated States. Current regulations restrict access to these programs to citizens or permanent residents. Of note, the Upward Bound program conditionally provides cash stipends to individuals enrolled in the program, but this proposal would not extend that benefit to noncitizen students due to existing prohibitions under federal law.