Education Department Issues New Guidance on July 1 Regulations
Two FAQs on the new financial responsibility and certification procedures regulations set to go into effect on July 1 were released this week by the Department of Education. The new guidance provides additional information about compliance with gainful employment program hours, licensure and disclosure requirements, and transcript withholding provisions that were included in the large set of accountability rules published last October.
In addition to the two FAQs, the Department issued a document summarizing the changes to the accountability rules that will go into effect during the 2024-25 academic year. NAICU has also developed resources to aid institutions as they implement the new requirements, including a dedicated resources page and an analysis of the new regulatory provisions.
Below is a summary of some of the key provisions in the new guidance.
Financial responsibility. The Department’s guidance clarifies several aspects of the new financial responsibility standards that institutions must comply with beginning July 1, 2024. Among the highlights, the guidance clarifies that financial audits must include the expanded related party footnote disclosures for all audits submitted to the Department on or after the rule’s effective date. In addition, institutions with conditions or circumstances prior to July 1 that meet any of the new reportable mandatory or discretionary triggers must report the issues within 21 days of the rule’s effective date, even if they were not reportable under the previous rule. The FAQs also provide several examples of provisions within loan agreements that would trigger a mandatory or discretionary report to the Department.
Gainful employment program hours. The FAQs provide additional compliance information concerning the limits on the number of hours in gainful employment programs for new students once the new rules go into effect on July 1, 2024. The guidance clarifies that programs that exceed the state’s minimum required hours are ineligible in their entirety for Title IV funds. In addition, a state’s minimum number of required hours for a program takes precedence for Title IV eligibility over an accreditor’s requirements. Thus, if a program would lose eligibility for Title IV funds because the state requires too few hours to meet the accreditor’s standards, then either the state or the accreditor would be expected to adjust their requirements to preserve the program’s eligibility.
Licensure and disclosure requirements. The FAQ on certification procedures contains additional details and various scenarios about compliance with new provisions governing programs that prepare students for occupations requiring programmatic accreditation or state licensure. For all programs eligible for Title IV funds, institutions are required to meet state educational requirements for licensure in: 1) the states where the institution is located; 2) the states where each student is located upon initial enrollment; or 3) the states where students attest that they intend to seek employment. If the licensure requirements are either unmet or undetermined in a given state, then institutions cannot enroll students in that state in the program. Among other things, the guidance clarifies that institutions must make location determinations only upon initial enrollment and is not responsible for tracking subsequent changes in location, unless the student changes programs. Institutions also must disclose to both prospective and enrolled students whether a program meets or does not meet applicable educational requirements for licensure in a given state.
Transcript Withholding. The FAQ on certification procedures also provides additional information about new requirements prohibiting institutions from withholding transcripts for balances owed due to school error or for any credits funded, in whole or in part, with Title IV funds. As a result, institutions must provide an official transcript that shows all the credits for payment periods in which the student received Title IV funds and for which all institutional charges were paid (or included in an agreement to pay) at the time the request was made. The guidance clarifies that a student will be considered to be fully paid if an institutional payment plan has been established and is current, although institutions may wait for the first payment under the agreement before releasing the transcript.
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