Higher Education – Page 3

October 30, 2020 by Katherine D. Brodie

U.S. Department of Education Final Rule on Distance Education and Innovation: What You Need to Know

On September 2, 2020, the U.S. Department of Education (“Department”) published a Final Rule, available at https://ifap.ed.gov/federal-registers/FR090220, on distance education and innovation. The regulations are effective July 1, 2021; however, institutions are permitted to voluntarily implement any or all provisions as of September 2, the date of publication of the final rule. The Department states that the rule is intended to “strike a balance” between fostering increased innovation in distance education offerings while protecting students and taxpayers.The rule makes the following regulatory changes:

• Allowing asynchronous delivery of some courses or portions of courses delivered as part of clock hour programs (this significant change was made in response to public comments on the proposed rule);
• Providing flexibility to distance education, competency-based education (CBE), and other types of educational programs that emphasize demonstration of learning rather than seat time when measuring student outcomes;
• Clarifying the distinction between distance education and correspondence courses and more clearly defining the requirements of “regular and substantive interaction” between students and faculty and the permissibility of engaging instructional teams in the delivery of education through distance learning;
• Clarifying the requirements for direct assessment programs, including how to determine equivalent credit hours and how to distribute aid to simplify administration, reduce confusion, and protect taxpayers;
• Limiting the requirement for institutions with strong track records to obtain approval from the Education Secretary for only the first direct assessment program offered by the school at a given credential level;
• Requiring institutions to report to the Education Secretary when adding a second or subsequent direct assessment program or establishing a written arrangement for an institution or organization that is not eligible to participate in the title IV, HEA program to provide more than 25 percent, but no more than 50 percent, of a program;
• Recognizing the value of “subscription-based programs,” and simplifying rules regarding the disbursement of title IV funding to students enrolled in these programs; and
• Requiring prompt action by the Department on applications by institutions to the Education Secretary seeking certification or recertification to participate as an eligible institution in the HEA, title IV program.

The rule also adds a definition of “juvenile justice facility” to ensure that students incarcerated in a juvenile justice facility continue their eligibility for Pell Grants.

Additional regulatory changes include:

• Encouraging employer participation in developing educational programs by clarifying that institutions may modify their curricula based on industry advisory board recommendations without relying on a traditional faculty-led decision-making process;
• Simplifying clock-to-credit hour conversions and clarifying that homework time included in the credit hour definition do not translate to clock hours, including for the purpose of determining whether a program meets the Department’s requirements regarding maximum program length;
• Encouraging institutions to give students equal credit for time spent preparing for and participating in lecture and laboratory courses;
• Clarifying that an institution may demonstrate for purposes of participating in title IV, HEA programs, a reasonable relationship between the length of a program if the number of clock hours does not exceed either 150 percent of the minimum requirement to work in the State in which the institution is located or 100 percent of the minimum hours in an adjacent State;
• Providing that the Education Secretary will rely on the accrediting agency or State authorizing agency to evaluate an institution’s appeal of a final audit or program review determination by the Department that includes a finding about the institution’s classification of a course or program as distance education or the institution’s assignment of credit hours; and
• Encouraging closing institutions to offer quality teach-outs by permitting the application of sanctions to individuals or institutions affiliated with other institutions that closed without executing a viable teach-out plan or agreement.

The final rule culminated a rulemaking that began nearly two years ago, building on the Trump administration’s Rethink Higher Education agenda that “challenged past practices, assumptions, and expectations about what ‘college’ is, what it should do, and how it should operate.” It remains to be seen whether these regulations would be subject to amendment from a change in Secretary, but we view this set of rules as less controversial than others amended or rescinded by Secretary DeVos (such as Gainful Employment and Borrower Defense to Repayment) and not likely to be a priority for change by a new Administration. Institutions of higher education should familiarize themselves with these rule changes as they develop distance education programs.

October 12, 2020 by Deanna J. Lucci

COVID-Related College Tuition Refund Claims Dismissed

Since the global pandemic forced most college campuses to resort to online instruction in March 2020, college students across the country have filed more than 150 lawsuits against their schools seeking refunds of tuition and related fees.

This month, a federal judge in Boston made the first dispositive ruling in such a case against Northeastern University – tossing out most of the claims asserted by the students in a putative class-action matter. Judge Richard G. Stearns of the District of Massachusetts found in Chong v Northeastern University, 20-10844-RGS, that the contract between the university and its students (the Financial Responsibility Agreement, “FRA”) did not specifically include a right to in-person instruction. The Judge noted that the FRA ties the payment of tuition to the registration for courses, “not to the receipt of any particular method of course instruction.”

The Judge also dismissed the students’ claims seeking a refund of certain student fees, such as student activity fees, finding that they paid the fees to support certain campus facilities – not necessarily to gain access to them. Thus, the Court gave no credence to the students’ claims that they should receive a refund of activity fees because the school prevented them from accessing those facilities due to the pandemic.

However, the Court did allow the students’ claims seeking a refund of campus recreation fees to go forward, finding that the students’ payment of those fees may have implicitly created a right to attend home athletic events and use the campus gym and fitness facilities, which ceased on March 12.

Judge Stearns’ ruling may be a sign of things to come for the many similar lawsuits currently pending against colleges and universities throughout the country. However, as in this case or any breach of contract action, these rulings will likely turn on the specific language of the applicable contract between the institution and the student.

September 28, 2020September 27, 2020 by Valentine A. Brown

Proposed Student Visa Rules will Upend Decades of U.S. Policy and Practice

On September 25, Immigration and Customs Enforcement (ICE), the DHS agency with jurisdiction over F-1 foreign student visa holders, published new proposed regulations that would end the long time U.S. practice of issuing “Duration of Status” to F-1 students. Instead, F-1 visa holders would be limited to 2 or 4 year visa terms depending upon their country of origin, and be required to reapply for F-1 Status through USCIS to obtain extensions, or to leave the United States and apply for an extension . The proposed regulations were immediately criticized by the higher education community. The rules were called ill-conceived, misguided, unnecessary, and a burden to an industry that has already seen a steady decline in international student admissions. Continue reading “Proposed Student Visa Rules will Upend Decades of U.S. Policy and Practice”

September 22, 2020 by Duane Morris

COVID-19 Can Change Everything—If We Let It

According to Dave Clayton, senior vice president of consumer insights at Strada Education Network, hybrid education “was a consistently popular option” throughout a recent survey taken by his organization. It beat out both online and in-person when it came to which option Americans were likely to recommend, as well as which option offered the best preparation for joining the workforce.

Will this change higher education? Of course it will. The market to find students gets more competitive for colleges every year. That trend is predicted to continue long into the future. If today’s junior high schoolers already know that they want “both,” this shift in consumer demand won’t go unnoticed. If college leadership wants the freshman class of 2026 to enroll in their institution, they would be foolish not to adapt.

To read the full text of this article by Duane Morris partner Edward M. Cramp, please visit the University Business website.

June 22, 2020June 22, 2020 by Katherine D. Brodie

Foreign Gifts: New Online Portal Emphasizes DeVos “No Excuses” Approach to Reporting

On June 22, 2020, the U.S. Department of Education published an electronic announcement reminding institutions of higher education of their mandatory reporting obligations under Section 117 of the Higher Education Act (“Section 117”) (20 U.S.C. § 1011f) and launched a new reporting portal to streamline the mandatory reporting process: https://partners.ed.gov/ForeignGifts.

Secretary DeVos has explained that foreign gift reporting under Section 117 is essential to the “transparency and accountability” necessary to “protect academic freedom and our country’s national security and economic future.”

The Department has at least ten ongoing investigations of major universities underway regarding Section 117 compliance, and more are expected. With this clear signal from the Department that this is a significant enforcement priority, colleges and universities should evaluate their past and current disclosures, past and current interpretation of Section 117 requirements, and make determinations about the extent of any additional reporting required or recommended.

Section 117 requires institutions of higher education to disclose to the U.S. Department of Education information about ownership and control by foreign sources, contracts with foreign sources, and gifts from foreign sources. The reporting obligation applies to any institution, public or private, or, if a multi-campus institution, any single campus of such institution, in any State, that is legally authorized within such State to provide a program of education beyond secondary school, that provides a program for which the institution awards a bachelor’s degree (or provides not less than a two-year program which is acceptable for full credit toward such a degree) or more advanced degrees, and is accredited by a nationally recognized accrediting agency or association and to which institution Federal financial assistance is extended (directly or indirectly through another entity or person), or which institution receives support from the extension of Federal financial assistance to any of the institution’s subunits.

Institutions that are owned or controlled by a foreign source must file two disclosure reports per year—one no later than January 31 and the other no later than July 31. All other institutions that receive a gift from or enter into a contract with a foreign source, the value of which is $250,000 or more, considered alone or in combination with all other gifts from or contracts with that foreign source within a calendar year, must file a disclosure report no later than January 31 or July 31, whichever is sooner.

The announcement makes clear that foreign gift reporting is considered by the Department to be an “information collection” process subject to 18 U.S.C. § 1001, which provides that whoever knowingly and willfully falsifies, conceals, or covers up by any trick, scheme, or device a material fact; makes any materially false, fictitious, or fraudulent statement or representation; or makes or uses any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry, may be subject to fines and imprisonment.

The Department also states that if an institution fails to report as required, the Secretary may request that the Department of Justice initiate a civil action in federal district court.

The Electronic Announcement is available at: https://ifap.ed.gov/electronic-announcements/062220ReminderRprtOwnerContrlContrctsGiftsForeignSrc

May 18, 2020 by Katherine D. Brodie

U.S. Department of Education Releases Additional CARES Act and COVID-19 Guidance

On March 15, 2020, the U.S. Department of Education published additional guidance for postsecondary institutions extending and clarifying regulatory flexibilities contained in the CARES Act and related to COVID-19.

Key components of the guidance include:

Extension of the time frame for authorization by the Department of temporary distance education approval for previously on-ground programs to include payment periods that overlap March 5, 2020, or that begin on or between March 5, 2020, and December 31, 2020.
Waiver of the Department’s requirement that an institution offering at least 50% of a program by distance education to be accredited for distance education by an accrediting agency that has distance education in the scope of its recognition. The waiver is effective for payment periods that begin on or before December 31, 2020.
Six month extension of the Title IV financial statement and compliance audit deadlines.

The guidance also includes important new information concerning:

Accreditation site visit extension flexibilities and requirements.
Extension by six months of the “materially complete application” requirements following a Title IV change of ownership and control to allow additional time for the institution to remain TItle IV certified while secure state and accreditor approvals as well as the audited same day balance sheet.
Waiver of MCAT score requirement for foreign graduate medical school admissions for students admitted to medical school during an admissions year in which the MCAT was unavailable to students for some period of time during that year due to COVID-19 related interruptions.
Additional flexibilities concerning verification of high school (or equivalent) completion status that applies until December 31, 2020, for both the 2019-2020 and 2020-2021 award years.
Treatment of the PPP loan forgiveness amount in calculating the institution’s composite score.
Treatment of student workers when determining the number of employees for PPP loan eligibility.
Tax treatment of HEERF and emergency financial aid grants to students.
Clarifications regarding Campus-Based Waivers/Reallocation and FSEOG Emergency Aid Grants.
Clarifications regarding Leaves of Absence (LOA) flexibilities.
Return of Title IV Funds (R2T4) guidance and processing detail.
Clarifications regarding Satisfactory Academic Progress (SAP) flexibilities.
Clarifications regarding Teacher Education Assistance for College and Higher Education (TEACH) Grant Program flexibilities.

Institutions should carefully analyze the full guidance document and related Q&A , available here: https://ifap.ed.gov/electronic-announcements/051520UPDATEDGuidanceInterruptStudyRelCOVID19May2020

April 21, 2020April 21, 2020 by Katherine D. Brodie

U.S. Department of Education Makes Available CARES Act Funds for Institutions of Higher Education

On April 21, 2020, the Department made available the institutional portion of the Higher Education Emergency Relief Fund (HEERF) under Section 18004(a)(1) and 18004(c) of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

By statute, the institutional HEERF funds are to be used to cover any costs associated with significant changes to the delivery of instruction due to the coronavirus so long as such costs do not include payment to contractors for the provision of pre-enrollment recruitment activities, including marketing and advertising; endowments; or capital outlays associated with facilities related to athletics, sectarian instruction, or religious worship.

Through an associated FAQ, the Department has provided further guidance and limitations on use of the institutional HEERF funds:

An institution must enter into the Funding Certification and Agreement with the U.S. Department of Education to receive and distribute Emergency Financial Aid Grants to Students in order to be eligible to receive the institutional HEERF portion of the funds. In other words, institutions cannot select only to receive the institutional, but not student, portion of the HEERF funds provided by Congress.
Institutions that have provided refunds to students for room and board, tuition, and other fees (such as activities fees) may use the institutional HEERF funds to reimburse themselves, so long as the institution can demonstrate that such costs were incurred as a result of significant changes to the delivery of instruction, including interruptions in instruction, due to coronavirus. Institutions will need to be able to document how those reimbursements are related to the COVID-19 interruption.
Institutions may reimburse themselves for refunds previously made to students on or after March 13, 2020, but only if they can demonstrate that such refunds were necessitated by significant changes to the delivery of instruction, including interruptions in instruction, due to coronavirus.
Institutions may use institutional HEERF funds for costs incurred by the institution to purchase laptops, hotspots, or other IT equipment and software necessary to enable students to participate in distance learning as a result of the coronavirus interruption.
Institutions that purchased computers or other equipment to donate or provide to students on or after March 13, 2020 may reimburse themselves for those costs, again if tied to need arising from the coronavirus interruption.
The institutional HEERF funds can be used to make additional emergency financial aid grants to students (to supplement the student HEERF funds), provided that such grants are for expenses related to the disruption of campus operations due to coronavirus (including eligible expenses under a student’s cost of attendance, such as food, housing, course materials, technology, health care, and child care). Only students who are or could be eligible to participate in programs under Section 484 in Title IV of the Higher Education Act of 1965, as amended (HEA), may receive emergency financial aid grants.
At institutions that provide both online and ground-based education, students who were enrolled exclusively in online programs on March 13, 2020 are not eligible for emergency financial aid grants, as the Department’s position is that students who were enrolled exclusively in online programs would not have expenses related to the disruption of campus operations due to coronavirus. Fully 100% online institutions were already ineligible for HEERF funding.
Institutional HEERF funds may be used to award scholarships or to provide payment for future academic terms only if the institution can demonstrate that such grants are needed for expenses related to the disruption of campus operations due to coronavirus. If provided to students in the form of emergency financial aid, such uses are allowable.
Institutional HEERF funds can be used to pay a per-student fee to a third-party service provider, including an Online Program Manager (OPM), for each additional student using the distance learning platform, learning management system, online resources, or other support services; however, institutions may not use institutional HEERF funds to pay third-party recruiters or OPMs for recruiting or enrolling new students at the institution.
The Funding and Certification Agreement that institutions must sign also makes clear that institutional HEERF funds cannot be used for: senior administrator and/or executive salaries, benefits, bonuses, contracts, incentives; stock buybacks, shareholder dividends, capital distributions, and stock options; and any other cash or other benefit for a senior administrator or executive.

More information on CARES Act grant resources and guidance can be found on the Office of Postsecondary Education’s webpage: https://www2.ed.gov/about/offices/list/ope/caresact.html

April 9, 2020 by Katherine D. Brodie

U.S. Department of Education Q&A on Use of Federal Grant Funds During COVID-19

On April 8, 2020, the U.S. Department of Education published a Q&A that answers questions related to use of Department grant funds during the novel Coronavirus Disease 2019 (COVID-19) with respect to compensation, travel, and conference costs that are otherwise allowable costs under applicable program statutes and regulations. factsheet-fiscal-questions

April 9, 2020 by Kristina Gill

May 4, 2020 Deadline for Public Comment on Important Distance Education Rulemaking

On April 1, the U.S. Department of Education (“USDE”) published a long-awaited Notice of Proposed Rulemaking (NPRM) for Distance Education and Innovation in the Federal Register. The proposed regulations are the final part of the consensus negotiated rulemaking that occurred in 2019. This regulation comes at an important time as institutions across the country are transitioning to varying forms of distance education due to COVID-19, albeit temporary or longer term. The NPRM represents the next step in the Department’s agenda to modernize its distance education regulations to promote innovation and reflect technological advancements, while protecting program quality. One key component of the NPRM is the new proposed definition of “regular” and “substantive” interaction between instructors and students for Title IV eligibility purposes. In the past, Title IV institutions have been assessed multi-million dollar fines for violating substantive and regular interaction requirements that were not well-defined in regulation. The NPRM also proposes revised credit and clock hour definitions directly addressing distance education and makes changes to recognize subscription based delivery of online education.

If your institution offers distance education and/or direct assessment programs, you should strongly consider analyzing and commenting on the proposed regulations. The Department has indicated that the Final Rule will be published by November 1, 2020, to allow an effective date of July 1, 2021. Comments are due by May 4, 2020 and must be submitted through the Federal eRulemaking Portal or via postal mail, commercial delivery, or hand delivery. The Department will not accept comments submitted by fax or by email or those submitted after the comment period.

Summary of the Major Provisions

As provided in the NPRM, the proposed regulations would:

Clarify that when calculating the number of correspondence students, a student is considered ‘‘enrolled in a correspondence course’’ if correspondence courses constitute 50 percent or more of the courses in which the student enrolled during an award year;
Limit the requirement for the Secretary’s approval to an institution’s first direct assessment program at each credential level;
Require institutions to report to the Secretary when they add a second or subsequent direct assessment program or establish a written arrangement for an ineligible institution or organization to provide more than 25 percent, but no more than 50 percent, of a program;
Require prompt action by the Department on any applications submitted by an institution to the Secretary seeking a determination that it qualifies as an eligible institution and any reapplications for a determination that the institution continues to meet the requirements to be an eligible institution for HEA programs;
Allow students enrolled in eligible foreign institutions to complete up to 25 percent of an eligible program at an eligible institution in the United States; and clarify that, notwithstanding this provision, an eligible foreign institution may permit a Direct Loan borrower to perform research in the United States for not more than one academic year if the research is conducted during the dissertation phase of a doctoral program;
Clarify the conditions under which a participating foreign institution may enter into a written arrangement with an ineligible entity;
Provide flexibility to institutions to modify their curriculum at the recommendations of industry advisory boards and without relying on a traditional faculty-led decision-making process;
Provide flexibility to institutions when conducting clock-to-credit hour conversions to eliminate confusion about the inclusion of homework time in the clock-hour determination;
Clarify the eligibility requirements for a direct assessment program;
Clarify, in consideration of the challenges to institutions posed by minimum program length standards associated with occupational licensing requirements, which vary from State to State, that an institution may demonstrate a reasonable relationship between the length of a program, as defined in 20 U.S.C. 1001(b)(1), and the entry-level requirements of the occupation for which that program prepares students;
Clarify that a student is not considered to have withdrawn for purposes of determining the amount of title IV grant or loan assistance that the student earned if the student completes all the requirements for graduation for a non-term program or a subscription based program, if the student completes one or more modules that comprise 50 percent or more of the number of days in the payment period, or if the institution obtains written confirmation that the student will resume attendance in a subscription-based or non-term program;
Clarify satisfactory academic progress requirements for non-term credit or clock programs, term-based programs that are not a subscription based program, and subscription-based programs;
Remove provisions pertaining to the use and calculation of the Net Present Value of institutional loans for the calculation of the 90/10 ratio for for-profit IHEs, because the provisions are no longer applicable;
Clarify that the Secretary will rely on the requirements established by an institution’s accrediting agency or State authorizing agency to evaluate an institution’s appeal of a final audit or program review determination that includes a finding about the institution’s classification of a course or program as distance education, or the institution’s assignment of credit hours;
Clarify that the Secretary may deny an institution’s application for certification or recertification to participate in the title IV, HEA programs if an institution is not financially responsible or does not submit its audits in a timely manner; and
Clarify that an institution is not financially responsible if a person who exercises substantial ownership or control over an institution also exercised substantial ownership or control over another institution that closed without executing a viable teach-out plan or agreement.

April 3, 2020 by Katherine D. Brodie

U.S. Department of Education Posts Updated COVID-19 Guidance for Institutions Following Enactment of CARES Act

Late on Friday, April 3, the Department posted updated guidance for institutions that recognizes the regulatory flexibilities authorized by Congress in the CARES Act, but also addresses other areas including Clery Act, Distance Education, Foreign Schools and FERPA, among other issues relevant to the COVID-19 interruption. The guidance is effective through June 30, 2020 unless otherwise extended by the Department. The Higher Education Relief Fund portion of CARES ACT is not addressed and will be the subject of future guidance.