Duane Morris will present the third session of our Boot Camp for Education Legal Leadership webinar series, Plan for Change: Regulations and Guidance with Significant Operational Impact, to be held on Wednesday, March 20, 2024, from 2:00 p.m. Eastern/11:00 a.m. Pacific.
Webinar Replay: The Regulatory Landscape ‒ A Dynamic and Disruptive 12 Month
Webinar: The Regulatory Landscape ‒ A Dynamic and Disruptive 12 Month
Duane Morris will present Boot Camp for Education Legal Leadership, Session 1: The Regulatory Landscape ‒ A Dynamic and Disruptive 12 Months, on Wednesday, January 24, 2024, at 2:00 p.m. Eastern time/11:00 a.m. Pacific time.
The past 12 months have been one of the most active in recent memory for the U.S. Department of Education in publishing new regulations and issuing new policy guidance in the area of Title IV, Higher Education Act compliance. Join the Education Industry Group at Duane Morris for review and analysis of these developments and how they impact your institution, both now and in the near future.
Continue reading “Webinar: The Regulatory Landscape ‒ A Dynamic and Disruptive 12 Month”
Department of Education’s Final Rule on Financial Value Transparency and Gainful Employment Published
On October 10, 2023, the U.S. Department of Education published the final rule on financial value transparency and gainful employment (88 Fed. Reg. 70004). The regulation restores and expands an accountability framework for career-specific training programs. At the same time, the regulation creates, for the first time, a new disclosure framework applicable to educational programs offered by all institutions participating in the Title IV, Higher Education Act (HEA) federal student aid funding programs.
This summary provides an overview of important facts and key elements of the final rule.
Read the full Alert on the Duane Morris LLP website.
Department of Education Expands Regulatory Jurisdiction Over Service Providers for Institutions of Higher Education
Institutions of higher education (IHEs) and companies providing services to IHEs (including so-called online program managers or OPMs) should take careful note of two announcements by the U.S. Department of Education that could significantly impact the institution/service provider relationship and the Department’s oversight of that relationship.
First, and most immediately effective, the Department has revised its subregulatory guidance regarding the activities that make an entity providing services to an IHE a “Third Party Servicer” (TPS) for Title IV purposes. In a significant expansion over prior guidance, an OPM providing services to an IHE related to student recruiting and retention, providing software products and services involving Title IV administration activities, or providing educational content and instruction are now defined as a TPS. Being defined as a TPS comes with significant increased risk and compliance obligations by the third party and the institution. There is an open public comment period on this change through March 17, 2023.
Read the full text of this Alert on the Duane Morris website.
Important Update: On February 28, 2023, the Department published an update to Dear Colleague Letter 23-03 that makes clear the guidance does not become effective until September 1, 2023. The reporting deadline for institutions and third-party servicers to report to the Department is also extended until September 1, 2023. Further, the Department extended the comment period through March 30, 2023.
Consumer Financial Protection Bureau Proposes Mandatory Registration of Terms and Conditions: Nonbank Student Loan Servicers Among Those Potentially Impacted
On January 11, 2023, the Consumer Financial Protection Bureau (“CFPB” or the “Bureau”) announced designs to create a public registry of terms and conditions in form contracts. Under the proposed rule (“Rule”), certain nonbank entities, including nonbank student loan servicers, would be required to register and submit information related to its terms and conditions that purport to waive or limit consumer rights and protections, along with identifying company information. The Bureau has opened up the Rule for a sixty-day comment period (closing on March 13, 2023), after which decisions will be made on its final form. Continue reading “Consumer Financial Protection Bureau Proposes Mandatory Registration of Terms and Conditions: Nonbank Student Loan Servicers Among Those Potentially Impacted”
Webinar Replay: What the Midterm Election Results Mean for Higher Education
A video replay is now available for the webinar “What the Midterm Election Results Mean for Higher Education,” recently presented by Duane Morris’ Education Team.
For more information, please visit the event page.
Temporary Expanded SNAP Benefits for College Students
Expanding access to postsecondary education for low income students includes more than just assistance with tuition and fees. Many low income students also need help with daily food costs while they pursue higher education. That need can adversely impact academic progress if not addressed. Needs have been exacerbated by the pandemic and high unemployment, and impact students whether they study on ground or online. Food insecurity among college students is gaining more attention, with the opening of college food pantries and other community support initiatives. The federal government is also stepping up. The U.S. Department of Education, in coordination with the U.S. Department of Agriculture, has issued new guidance to postsecondary institutions to raise awareness about temporarily expanded Supplemental Nutrition Assistance Program (SNAP) eligibility for students and urges institutions to make students aware of this resource. The expansion of benefits will be in effect until 30 days after the COVID-19 public health emergency is lifted. The new guidance can be found here: https://ifap.ed.gov/electronic-announcements/022321SNAPbenefitseligiblestudsCOVID19pandemic
FY 2018 Draft Cohort Default Rates Released to Title IV Participating Institutions of Higher Education – Time Frame for Appeal Begins March 2, 2021
On Feb. 22, 2021, the U.S. Department of Education distributed the FY 2018 draft cohort default rate (CDR) notification packages to all eligible domestic and foreign schools for those schools enrolled in the Electronic Cohort Default Rate (eCDR) notification process. Any school not enrolled in eCDR may download their cohort default rates and accompanying Loan Record Detail Reports from the National Student Loan Data System (NSLDS®) via the NSLDS Professional Access website.
The time frame for appealing the FY 2018 draft cohort default rates under 34 C.F.R Part 668, Subpart N begins on Tuesday, March 2, 2021 for all schools.
Under the Title IV financial responsibility regulations at 34 C.F.R. 668.171(d)(6), the Department has discretion to determine that a Title IV institution is not able to meet its financial or administrative Title IV obligations (which can lead to a letter of credit requirement or other potential adverse action) if the institution’s two most recent official cohort default rates are 30 percent or greater and such circumstance is likely to have a material adverse effect on the financial condition of the institution, unless the institution has a challenge, adjustment or appeal pending or successfully finalized.
Note that any school that did not have a borrower in repayment, during the current or any of the past cohort default rate periods, will not receive a FY 2018 draft cohort default rate notification package. These schools are considered to have no cohort default rate data and no cohort default rate.
https://ifap.ed.gov/electronic-announcements/022221FY2018DraftCDRDistributedFeb222021
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.