On July 1, 2019, the U.S. Department of Education published a final rule rescinding the Department’s gainful employment (GE) regulations (2014 Rule) in the Federal Register. Institutions were given the option to early implement the rescission of the GE rule. Institutions that did not early implement the rule are still required to comply with the 2014 rule until the rescission becomes effective on July 1, 2020, and are expected to report GE data for the 2018–19 Award Year to National Student Loan Data System (NSLDS) by October 1, 2019. Compliance with the GE rule would be monitored via annual Title IV compliance audits and Title IV program reviews.
The Jeanne Clery Disclosure of Campus Security Policy and Campus Crime Statistics Act, or Clery Act, 20 U.S.C. § 1092(f) (34 C.F.R. § 668.46), requires all schools, colleges and universities that participate in federal student financial aid programs to:
Maintain and disclose to the public statistics, policies and programs about certain crimes occurring on and/or near a campus; and
Have in place and be able to demonstrate implementation of specific campus safety policies, including those related to crimes of sexual violence.
Educational institutions must provide and distribute this information in a Clery Act Annual Security Report (ASR) by October 1, 2019. The U.S. Department of Education guidance specifies that this is a firm deadline; there is no grace period and no exemptions exist.
The California Consumer Privacy Act of 2018 Webinar Series will be hosting its third installment, “How the CCPA Impacts the Higher Education Industry,” to be held on September 5, 2019. The webinar will be presented by Duane Morris attorneys Brandi A. Taylor and Michelle Hon Donovan.
This session provides an overview of the new law and how it applies to schools and companies in the education sector. Nonprofit educational institutions are exempt from the new law. However, it will apply to any for-profit education institutions, service providers and technology companies that collect any information on California residents and meet any of the following criteria:
Have an annual gross revenue of $25 million or more;
Collect, sell or share for commercial purposes the personal information of at least 50,000 consumers, households or devices annually; or
Derive at least 50 percent of annual revenue from selling consumers’ personal information.
Late on Friday, August 2, 2019, the U.S. Department of Education sent a letter to the California Department of Consumer Affairs that rejected California’s proposed complaint process for Californians attending online programs offered by out-of-state public and nonprofit institutions, but provided a clear path to compliance and a promise not to disrupt federal student aid, assuming California takes the steps outlined in the letter. We previously summarized aspects of the 2016 State Authorization Rule in our July 23, 2019, and July 26, 2019,Alerts.
Here are four key takeaways from the Department’s letter.
1. Federal student aid to Californians will not be disrupted IF California takes the steps outlined in the letter to meet the 2016 State Authorization requirements.
The Department’s August 2letter “assumes” California will do three things: (1) modify its plan to refer student complaints to a California state agency for adjudication, (2) require a California state agency to oversee the investigation of the student complaints and resolve them, according to applicable California state law, and (3) receive complaints regarding issues starting from at least May 26, 2019, the date that the 2016 regulations went into effect.
We reported earlier this week on the U.S. Department of Education’s July 22, 2019, announcement, which clarified that California students attending online programs offered by out-of-state nonprofit and public institutions are not currently eligible for Title IV Federal Student Aid because of lack of a student complaint process. This issue is not limited to California students and could similarly impact students in many states across the country attending online programs offered by all California colleges and universities, including nonprofit, public and for-profit schools. California-based colleges and universities offering online programs in other states must seek state-by-state authorization or exemption because California does not participate in SARA (State Authorization Reciprocity Agreement). Many of these states do not provide a complaint process for exempt institutions.
The U.S. Department of Education on July 22, 2019, clarified that the 2016 State Authorization Rule, which applies to online educational programs offered across state borders, among other topics, is undoubtedly now in effect. As this Alert explains, there are significant and immediate consequences for schools deemed to be noncompliant, even if through no fault of their own.
Here are the top three things schools need to know…
A package of seven interrelated bills proposing tighter regulation of for-profit and private colleges in California moved closer to becoming law this week — but not fully intact.
One of the bills, a proposal to create the nation’s first state-level gainful-employment rule, was watered down to require only the collection and disclosure of data around employment outcomes of graduates at for-profit colleges.
On July 1, 2019, the US Department of Education published a Final Rule addressing Program Integrity: Gainful Employment (“GE”) in the Federal Register. The regulations rescind the 2014 GE regulations and remove them from subpart Q (gainful employment programs) of the Student Assistance and General Provisions in 34 CFR part 668. The regulatory action also rescinds subpart R (program level cohort default rates) of the Student Assistance and General Provisions in 34 CFR part 668. The regulations are effective July 1, 2020, however, the Secretary is exercising her authority to allow any entity subject to the regulations to choose early implementation.
On June 28, 2019, the Department published Electronic Announcement #122 to provide additional guidance to institutions regarding early implementation of the rule. If an institution chooses early implementation, they must document the early implementation decision internally. An institution does not have to publish its decision to do so; however, it must make such documentation available upon request by the Department. Institutions that do not early implement the rule are expected to comply with the 2014 GE regulations until the rescission becomes effective on July 1, 2020. Continue reading Gainful Employment Rescinded with Option for Early Implementation→
On June 3, 2019, the U.S. Department of Education issued a Q&A document regarding compliance with the BDR Rule that confirmed that the reporting requirements for certain “triggering” events will be enforced atallinstitutions, including public colleges and universities. This information supplements the Department’s March 15, 2019, guidance regarding the 2016 BDR Rule.
The Department’s Q&A makes clear that public institutions are required to report, pursuant to 34 C.F.R. 668.171(h), the following events within the stated time periods:
Borrower-defense-related lawsuits brought by a federal or state authority: within 10 days after the institution is served with the complaint and then again within 10 days after the suit has been pending for 120 days.
All other lawsuits: within 10 days after the institution is served with a complaint, then again within 10 days after the court sets certain deadlines relating to motions for summary judgment (MSJ) or disposition, and then a third time within 10 days after certain events relating to an MSJ or dispositive motion occur.
Any debt or liability arising from a final judgment in a judicial or administrative proceeding: within 10 days after a payment was required or the liability was incurred.
Any settlement, including settlements reached prior to the initiation of a formal legal proceeding: within 10 days after a payment was required or a liability was incurred.