USDE Proposes Regulations and Other Federal Issues

SPEAKERS AT CHEA 2016 SUMMER WORKSHOP ADDRESS RANGE OF ISSUES RELATED TO ACCREDITATION

The CHEA 2016 Summer Workshop, held July 21-22 in Washington, DC, featured speakers from Capitol Hill, the administration, accrediting organizations, higher education institutions and business. Titled Examining the Accreditation Space: Accreditation and Its Constituents, the workshop was built around six key questions for accreditation’s major constituents, with a number of speakers addressing federal policy and the relationship between accreditation and government. Sessions at the workshop addressed topics such as accreditation’s role in helping students, accountability and transparency, the importance of accreditation engendering trust and confidence and the challenge of change and innovation.

Speakers focusing on federal government-related issues included James Kvaal, former Deputy Director, White House Domestic Policy Council and Towsley Foundation Policymaker in Residence, Gerald R. Ford School of Public Policy, University of Michigan: Lynn Mahaffie, Deputy Assistant Secretary, Policy, Planning and Innovation and delegated Duties of Assistant Secretary for Postsecondary Education, U.S. Department of Education (USDE); Bryce McKibben, Education Policy Advisor for the U.S. Senate Health, Education, Labor and Pensions Committee; Cheryl Oldham, Vice President of Education Policy, U.S. Chamber of Commerce; and Susan Phillips, Chair, USDE’s National Advisory Committee on Institutional Quality and Integrity.

USDE PROPOSES RULE ON STATE AUTHORIZATION OF POSTSECONDARY DISTANCE EDUCATION AND FOREIGN LOCATIONS

On July 25, 2016, the USDE published a Notice of Proposed Rulemaking in the Federal Register clarifying the state authorization requirements for postsecondary distance education. Currently, the law requires institutions to have state authorization where they are physically located but does not require authorization in states where the institution has no physical presence. These rules would supplement the state authorization rules negotiated in 2010 and implemented last year.

Amendments to existing USDE state authorization requirements include:

• Institutions that offer distance education or correspondence courses would need to meet any state authorization requirements in each state in which the institution enrolls students. The proposed regulations recognize authorization through participation in a state authorization reciprocity agreement, as long as the agreement does not conflict with a state’s own consumer laws.
• Institutions would be required to inform students and prospective students how to submit complaints regarding distance education programs.
• Disclosures to enrolled and prospective students would be required regarding adverse actions taken against the school, the school's refund policies and whether each program meets applicable state licensure or certification requirements.
• Foreign branch campuses or locations would require authorization by the appropriate foreign government agency. If at least half of a program can be completed at the foreign location or branch campus, the program must be approved by the institution’s accreditor and reported to the state where the main campus is located.

Public comments may be submitted by email until August 24, 2016. After reviewing comments received, USDE will work to publish a final regulation by November 1, 2016, to take effect on July 1, 2017.

FY 2017 HOUSE AND SENATE APPROPRIATIONS BILLS FOR USDE PASSED BY COMMITTEES

At the same time that USDE proposed new rules concerning state authorization of distance education, 
FY 2017 appropriations bills for USDE, containing prohibitions for funding these new state authorization and other requirements, moved forward in the U.S. House of Representatives and Senate.

The House appropriations bill will prohibit USDE use of funding to implement or enforce state authorization, gainful employment, credit hour and teacher preparation program regulations.

The Senate appropriations bill will prohibit USDE use of funding for state authorization regulations, defining gainful employment, definition of a credit hour and federal evaluation of teacher preparation programs until the Higher Education Act (HEA) is reauthorized.

Both the House and Senate bills have passed in Committee but have not yet had a final vote in either Chamber.

NATIONAL ADVISORY COMMITTEE ON INSTITUTIONAL QUALITY AND INTEGRITY TO COMPLETE SUMMER MEETING ON AUGUST 23, 2016

USDE’s National Advisory Committee on Institutional Quality and Integrity (NACIQI) is scheduled to complete its June 22-24, 2016, meeting by teleconference on August 23, 2016 (see notice in the Federal Register). NACIQI is the advisory body that provides recommendations to the U.S. Secretary of Education on the recognition of accrediting organizations. Recognition by USDE affirms that the standards and processes of accrediting organizations and state accreditation approval agencies demonstrate compliance with USDE's criteria.

Accrediting organizations to be reviewed during the teleconference are the Accrediting Commission of Career Schools and Colleges, the American Osteopathic Association Commission on Osteopathic College Accreditation, the Council on Occupational Education, the Northwest Commission on Colleges and Universities and the Transnational Association of Christian Colleges and Schools Accreditation Commission. These accrediting organizations were scheduled for NACIQI’s June meeting but were not reviewed because of the length of discussion (see Federal Update #54).

Click here to view USDE staff reports on the accrediting organizations scheduled for review.

USDE ISSUES PROPOSED RULES ON BORROWER DEFENSE

On June 16, 2016, USDE published in the Federal Register a Notice of Proposed Rulemaking with additional defenses for student borrowers added to the rules governing the Borrower Defense to Repayment provision of HEA.

USDE has proposed triggers that could require institutions to post a letter of credit to assure that institutions are prepared to take responsibility for future claims and other liabilities. The triggers – intended to protect student loan borrowers from misleading, deceitful or predatory practices or failure to fulfill contractual obligations by institutions participating in student aid programs – include accrediting agency actions (such as an institution being placed on probation or issued a show-cause in the three prior award years) and gainful employment rates (if more than 50 percent of the school's Title IV-recipient students are enrolled in gainful employment programs that have failing rates of debt-to-earnings for graduates).

PARTY PLATFORMS ADDRESSES ACCREDITATION AND HIGHER EDUCATION

The Republican Party's platform presented at its convention speaks to accreditation, stating that the party will “protect accreditation of faith-based institutions” and that “accreditation should be decoupled from federal financing.” In addition, the platform says “states should be empowered to allow a wide array of accrediting and credentialing bodies to operate. This model would foster innovation, bring private industry into the credentialing market, and give students the ability to customize their college experience.”

The Democratic Party platform highlights making debt-free college a reality, providing relief from high levels of student debt, supporting minority-serving institutions and cracking down on “predatory” for-profit schools, but does not address accreditation specifically.

CFPB APPEALS JUDGE’S RULING ON INVESTIGATION OF ACCREDITING ORGANIZATION

As reported in Federal Update #53, the Consumer Financial Protection Bureau (CFPB) had been seeking information from the Accrediting Commission for Independent Colleges and Schools (ACICS) regarding some of the ACICS-accredited institutions and their financial practices. ACICS went to court to prevent having to release this information and the court agreed. CFPB is appealing the judge’s ruling.