This analysis was prepared by Venable, LLP, on behalf of AACOM.
On Tuesday, January 9, 2024, the U.S. Department of Education (the “Department”) hosted its second day of negotiated rulemaking to discuss proposals related to state authorization and distance education. A summary of each discussion follows.
State Authorization
The Department’s state authorization issue paper proposed changes to current regulations regarding state approval and licensure and state authorization reciprocity agreements. Regarding reciprocity agreements specifically, the Department expressed concerns related to the current complaint process and governance of reciprocity boards.
State Approval and Licensure (§ 600.9)
In their issue paper, the Department expressed concern with certain exemptions of state approval and licensure requirements for institutions under current regulations. In particular, current regulations allow states to exempt certain institutions from state authorization requirements if the institution is accredited by an accrediting agency recognized by the Secretary or if the institution has been in operation for 20 years. These exemptions, the Department argued, “do not ensure sufficient State oversight of those institutions.”
Negotiators addressed these concerns in a guided discussion using questions from the issue paper. Some committee members urged the Department to take actions to overhaul the higher education program integrity triad. Members also deliberated exemptions being made for schools who have been in operation for at least 20 years, highlighting that having been in existence for 20 years is less meaningful if ownership had changed in that time.
State Authorization Reciprocity Agreements (§§ 600.2 and 600.9)
The Department also suggested changes to state authorization reciprocity agreements, arguing that the current reciprocity system allows for the manipulation of state rules. Negotiators discussed two Department proposals to remedy this issue.
First, under the Department’s proposal, reciprocity agreements would have to require institutions to have a system in place to report student complaints directly to the state in which they reside.
While most negotiators supported the proposal, some, like John Ware from the Ohio State Board of Career Colleges and Schools, argued that the proposal is unnecessary and that state regulators are already in frequent contact regarding student complaints. JoEllen Price from San Jacinto College and Jillian Klein from Strategic Education, Inc. also questioned the proposal’s necessity, asking how this proposal differs from the current NC-SARA complaint process. The two noted that current protocols seem to be working fine and did not see the need for the additional requirement. Federal Negotiator Greg Martin responded that tighter mechanisms need to be in place to address student complaints and that this proposal would address current gaps. However, negotiators still had questions about who is in charge of making sure this information gets to the state, and to what state agencies this information should be reported.
Meanwhile, Carolyn Fast from the Century Foundation offered up additional language that would permit member states in these agreements to, at the state’s discretion, investigate unresolved complaints about an institution. Some negotiators, such as Scott Dolan from Excelsior University, expressed concerns about the complexity that could come from Carolyn’s proposal. He argued that the additional language could increase costs and undermine the voluntary authorization states entered into.
The second proposed change in the Department’s issue paper limits the makeup of governing boards that oversee state authorization reciprocity agreements so that they include representation from only state employees and members of the public. The change would also prohibit previous or current institutional representatives from serving on the board, which Department officials argued has the effect of states passing off their roles in the accountability triad to other parties.
Committee members, however, expressed concern over the proposed limits to the makeup of the governing boards, arguing that this change could prohibit willing service from members whose expertise could benefit the board. For this reason, Carolyn Fast proposed adding language that would create an advisory board role for members of the public that is separate from the governing board, which she proposed should only be for state employees. Members of the public could provide the board with insight in an advisory capacity which would ensure that state regulatory agencies are receiving different levels of expertise without delegating their responsibilities to nonstate actors, Carolyn argued. Department negotiators noted that they are open to the language and said they would review the proposed text.
Throughout these discussions, the Department noted that its reference to NC-SARA in the issue paper was not meant to target the entity, but rather merely to provide an example. The Department also underscored that its intent with the proposed changes was not to eliminate reciprocity agreements, but rather strengthen state authorization rules and “appropriately” regulate distance learning.
Distance Education
Later in the afternoon, the Committee reviewed the proposed regulatory text on distance education. In its issue paper, the Department sought feedback on virtual locations and “clock-hour” programs delivered through asynchronous learning.
Virtual Locations (§ 600.2)
On virtual locations, the Department proposed requiring programs offered exclusively by distance education to have their own two-digit suffix in the school’s OPE ID which would allow the Department to obtain more data on student outcomes that are currently unavailable. By designating programs entirely online as additional virtual locations, the Department would have individual student level data for Title IV recipients.
While most committee members supported the proposal, some argued that the Department should also find ways to collect data on students enrolled in programs that are hybrid, or both in-person and online. The Department said they are open to finding ways in which they can obtain that information, but expressed concerns that collecting that data could be a “reporting nightmare” and could potentially overburden institutions.
Clock-Hour Programs (§ 600.2)
The Department later turned to its second part of the issue paper that would remove the allowance for clock-hour programs provided via distance education to be offered through asynchronous learning. The Department highlighted the abuse it has seen in this area with programs not properly logging students’ time spent on certain academic activities. The Department clarified that the change would not prohibit clock-hour programs from offering distance education, but would no longer allow asynchronous work to count toward a student’s completed hours for purposes of Title IV aid disbursements. The Department concluded by noting that they have not yet mapped out a timeline for the roll out of this regulation, and that they would look to the committee for suggestions as to how to address a potential transition period.
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