The Catholic University of America


Summary of Federal Laws

Financial Aid Programs

Higher Education Act of 1965 as amended

Compliance Partners

Director of Financial Aid
VP and Dean of Undergrad Studies
Dean of Graduate Studies
Manager of the Federal Work Study Program

20 U.S.C. §§ 1070-1099; 34 C.F.R. § 668.1et seq;

34 CFR 668.6 (b) Gainful Employment

(click here for accounting and reporting requirements not specifically about the financial aid program)

General Information on the Higher Education Act

The Higher Education Act, as amended, requires  universities to give all students and prospective students information about the academic program and standards that must be met, as well as accreditation information. Costs and refund policies must be listed. Detailed information about financial aid must be provided, including information on how to contact the university's financial aid officer. Exit counseling must be made available to those who have incurred student loans. In 1991, Congress deleted the six-year statute of limitations for collecting student loans. See 20 U.S.C. § 1091a.
There has been a significant growth in regulations related to the HEA. This page will capture the highlights and latest issues.

Program Integrity and Improvement, Final Rule, Dept. of Education, 81 Fed. Reg. 92232, Dec. 19, 2016

In this final rule, effective July 1, 2018, the Dept. of Education amends the State authorization sections of the Institutional Eligibility regulations issued under the Higher Education Act of 1965, as amended (HEA). In addition, the Secretary amends the Student Assistance General Provisions regulations issued under the HEA, including the addition of a new section on required institutional disclosures for distance education and correspondence coursesThe new rule would do the following: 


  • Require an institution offering distance education or correspondence courses to be authorized by each State in which the institution enrolls students, if such authorization is required by the State, in order to link State authorization of institutions offering distance education to institutional eligibility to participate in the title IV, HEA programs, including through a State authorization reciprocity agreement. 
  • Define the term “State authorization reciprocity agreement” to be an agreement between two or more States that authorizes an institution located and legally authorized in a State covered by the agreement to provide postsecondary education through distance education or correspondence courses to students residing in other States covered by the agreement and does not prohibit any State in the agreement from enforcing its own statutes and regulations, whether general or specifically directed at all or a subgroup of educational institutions. 
  • Require an institution to document the State process for resolving complaints from students enrolled in programs offered through distance education or correspondence courses. 
  • Require that an additional location or branch campus located in a foreign location be authorized by an appropriate government agency of the country where the additional location or branch campus is located and, if at least half of an educational program can be completed at the location or branch campus, be approved by the institution's accrediting agency and be reported to the State where the institution's main campus is located. 
  • Require that an institution provide public and individualized disclosures to enrolled and prospective students regarding its programs offered solely through distance education or correspondence courses.

The defintion of *state authorization reciprocity agreement* was changed as follows:

Changes: We have revised the definition of State authorization reciprocity agreement by deleting the words “consumer protection laws” and adding in their place “statutes and regulations, whether general or specifically directed at all or a subgroup of educational institutions.” In addition, we have replaced the word “participating” with reference to a participating State with the word “any” so that a State authorization reciprocity agreement does not prohibit any State from enforcing its own statutes and regulations, whether general or specifically directed at all or a subgroup of educational institutions. We add the word “residing” after the word “students” to clarify that the agreement authorizing and institution to provide postsecondary education through distance education or correspondence courses is to students residing in other States covered by the agreement. We also add the words “in the agreement” after “any State” to clarify that the agreement does not prohibit any State in the agreement from enforcing its own statutes and regulations.

Failure to obtain authorization in a particular state results in denial of Title IV aid for that particular state.  Institutions should not market to, nor enroll students in, a program in a State unless the institution has met applicable State authorization requirements. An institution should be providing the student with information about its State authorization status and should be informing the student that, if the student relocates to a State where the institution is not authorized, the institution cannot disburse Federal student aid to the student as long as the student continues to reside in that State.

All Institutions must perform the due diligence of learning what additional requirements a foreign government may put on an institution to offer educational programs in their jurisdiction and comply with those requirements as a basic price of doing business in that foreign country.

While these regulations provide an exemption for branch campuses that is physically located on a military base, facility, or area that a foreign country has granted the U.S. military to use, the Department declines to publish a complete listing of these areas. These areas would be decided by a Status of Forces agreement between the U.S. and a foreign country.

Complaint process and other required disclosures

The Department added new § 668.50(b) and (c), which requires disclosures to enrolled and prospective students in the institution's distance education programs. Up to eight disclosures will be made publicly available, and up to three disclosures will require direct communication with enrolled and prospective students when certain conditions have been met. These disclosures will not change any other required disclosures of the Student Assistance General Provisions regulations.

Public Disclosures
§ 668.50(b)(1) Whether the program is authorized in the state in which the enrolled student resides; 

§ 668.50(b)(2)(i) Process for submitting complaints to the appropriate State agency in the State in which the main campus of the institution is located;

§ 668.50(b)(2)(ii) Any complaint process established by the reciprocity agreement;

§ 668.50(b)(3) Process for submitting complaints to the appropriate State agency in the State in which enrolled students reside, including contact information for those State agencies that handle consumer complaints;

§ 668.50(b)(4) Disclose any adverse actions a State entity has initiated related to the institution's distance education programs or correspondence courses for a five calendar year period prior to the year in which the institution makes the disclosure. 

§ 668.50(b)(5) Disclose any adverse actions an accrediting agency has initiated related to the institution's distance education programs or correspondence courses for a five calendar year period prior to the year in which the institution makes the disclosure;

§ 668.50(b)(6) Disclose any refund policies for the return of unearned tuition and fees with which the institution is required to comply by any State in which the institution enrolls students in a distance education program or correspondence courses. This disclosure requires publication of the State-specific requirements on the refund policies as well as any institutional refund policies that would be applicable to students enrolled in programs offered through distance education or correspondence courses with which the institution must comply.

§ 668.50(b)(7) Disclose the applicable educational prerequisites for professional licensure or certification which the program offered through distance education or correspondence course prepares the student to enter for each State in which students reside. The institution must also make this disclosure for any other State which the institution has made a determination regarding such prerequisites as well as if the institution's program meets those requirements. For any State for which an institution has not made a determination with respect to the licensure or certification requirement, an institution will be required to disclose a statement to that effect. 

Individual Disclosures

NB: These are federally required individual disclosures. Some states have their own unique disclosures. 

Under § 668.50(c)(1)(i), an institution will be required to provide an individualized disclosure to prospective students when it determines a program offered solely through distance education or correspondence courses does not meet licensure or certification prerequisites in the State of the student's residence.

Under § 668.50(c)(1)(ii), an institution will be required to provide an individualized disclosure to both enrolled and prospective students within 30 days of when it becomes aware of any adverse action initiated by a State or an accrediting agency related to the institution's programs offered through distance education or correspondence courses; or within seven days of the institution's determination that a program ceases to meet licensure or certification prerequisites of a State.

For prospective students who receive any individualized disclosure and subsequently enroll, § 668.50(c)(2) will require an institution to obtain an acknowledgment from the student that the communication was received prior to the student's enrollment in the program.

For summaries/comments of/on the new final rule, see the following: 

NC SARA response; 

WCET posts: 

December 21st post

December 16th post. 

See also the Dec. 21, 2016 Inside Higher Ed summary

Schools should not rely upon a repeal of the rules by a new administration. While this new rule is not in place until July 2018, much of what is in the rule mirrors or supplements current requirements in place by states that will continue to exist and apply regardless of federal action or inaction. 


Borrower Defense Final Rules November 1, 2016*

Published by DOE. See 10-28-16 article by Inside Higher Ed on the rules. Here is the Dept. Summary of the final rules. For greater detail, see the Hogan Lovells Education Alert dated Nov. 7, 2016 titled U.S. Department of Education Publishes Final Rule Regarding Student Loan Borrower Defenses and Institutional Financial Responsibility

Proposed Regulations, 81 Fed. Reg. 39330, June 16, 2016 Borrower Defenses to Repayment of Federal Loans 

This proposed rule would amend the regulations governing the Direct Loan Program to establish a new Federal standard and process for determining whether a borrower has a defense to repayment on a loan based on an act or omission of the institution that the student attended. It would also prohibit participating institutions from using certain contractual provisions regarding dispute resolution processes, revise financial responsibility standards, and add disclosure requirements for institutions, among other amendments.

See ACE letter of August 1, 2016 on proposed rule. 

Final Regulations; Program Integrity Rules, 80 Fed. Reg. 73991, Nov. 27, 2015.

The Department of Education has now issued rules that clarify the incentive compensation ban. Recruiters may be compensated based upon graduation or completion of educational programs. However, no commissions are allowed tied to minority enrollments, and the rules continue to bar compensation of recruiters based upon the number of students they enroll, irrespective of the student's minority or other status, such as athletes. This clarification is published after litigation by the for profit colleges over the initially published regulations on October 29, 2010. The Department changed its mind as it had no evidence that graduation rate compensation was being used as a proxy for enrollment based compensation. See On Recruiter Pay, For Profit Colleges Win One, Lose One, by Kelly Field, Chronicle of Higher Education, Nov. 25, 2015.See also Cooley Client Alert- ED Issues New Incentive Compensation Guidance.


Final Regulations; Program Integrity Rules, 80 Fed. Reg. 67125, October 30, 2015

Effective July 1, 2016. These regulations are intended to ensure that students have convenient access to their title IV, HEA program funds, do not incur unreasonable and uncommon financial account fees on their title IV funds, and are not led to believe they must open a particular financial account to receive their Federal student aid. In addition, the final regulations update other provisions in the cash management regulations and
otherwise amend the Student Assistance General Provisions. The final regulations also clarify how previously passed coursework is treated for title IV eligibility purposes and streamline the requirements for converting clock hours to credit hours.

Final Regulations, Program Integrity Rules, 75 Fed. Reg. 66831 (October 29, 2010)

Effective July 1, 2011 These rules define the requirement of “state authorization” to offer post-secondary education, including authorization to operate in other states, and include a requirement that a State have a process to review and appropriately act on complaints concerning the institution; prescribe a federal definition of “credit hour” for purposes federal financial aid programs and require accrediting agency review of credit hour allocation; eliminate the twelve safe harbors contained in the previous rule prohibiting incentive compensation for student recruiting, admission, or matriculation; and prohibit false or misleading statements concerning the nature of educational programs, the nature of financial charges, or the employability of graduates. 

Final Regulations, Technical Amendments, Program Integrity Issues, 78 Fed. Reg. 57798, Sept. 20, 2013. These technical  amendments were made in response to the DC Circuit Court decision of June 2012 in APSCU v. Duncan. (See below) The technical amendments made were to remove the words "or confuse" from the definition of misrepresentation, which the court had found to be overbroad; remove the categories of misrepresentation "regarding an eligible institution" and the one with reference to an institution's "relationship with the Department of Education", and finally, amdend the rules so that now only provisionally certified institutions lack the due process protections that apply to fully certified schools when it comes to the issue of substantial misrepresentation.

Department of Defense (DoD) and Tuition Assistance Policy and MOUs

DOD FAQ on Voluntary Education Partnership MOU. See question 29 re state authorization.

Update on DOD Tuition Defense Program provided by NAICU, July 9, 2014. A new version of the MOU has been issued, which must be signed by Sept. 5th. If you have already signed the May MOU, a certification is required.

Voluntary Education Programs, 79 Fed. Reg. 27732, Final Rule, May 15, 2014  Effective July 14, 2014

The new policies discussed in the rule include the following: All educational institutions providing education programs through the DoD Tuition Assistance (TA) Program will provide meaningful information to students about the financial cost and attendance at an institution so military students can make informed decisions on where to attend school; not use unfair, deceptive, and abusive recruiting practices; and provide academic and student support services to Service members and their families. MOUs for various brances of service are included in the Appenices.

New Complaint System for Recipients of Military/Veteran's Education Benefits (Jan. 30, 2014)

Press Release**

DOD Postsecondary Education Complaint System**

ACE Comments on Voluntary Education Programs Proposed Rule

Voluntary Education Programs, Department of Defense, Proposed Rule, 78 Fed. Reg. 49382, August 14, 2013.
All educational institutions providing education programs through the DoD Tuition Assistance (TA) Program must provide meaningful information to students about the financial cost and attendance at an institution so military students can make informed decisions on where to attend school; not use unfair, deceptive, and abusive recruiting practices; and provide academic and student support services to Service members and their families.

Draft Memo of Understanding (Dec. 6, 2012) for colleges to sign to participate in military tuition assistance program. MOU is to be signed by March 1, 2013 for participation in tuition assistance programs.

Department of Education DCL dated July 13, 2012 providing guidance on how to comply with EO 13607.

 Financial Aid Shopping Sheet: Press Release, Letter to Colleges re purpose, and actual form.

The letter states that use of the format will meet the requirements of Executive Order 13607 requiring institutions receiving federal funds under military and veterans educational benefits programs to provide prospective veteran and service member students with a personalized and standardized form describing the costs of the educational program and the amount of that cost that may be covered by Federal education benefits and financial aid.


4/27/12 Executive Order Establishing Principles of Excellence for Educational Institutions Serviing Service Members, Veterans, Spouses and Other Family Members. The Executive Order directs the Departments of Defense, Veterans Affairs and Education to develop Principles of Excellence to apply to educational institutions receiving funding from Federal military and veterans’ educational benefits programs, including benefits programs provided by the Post-9/11 GI Bill and the Tuition Assistance Program.  The order directs that the Principles incorporate eight specific elements, including:  use of a personalized, standardized pre-enrollment form developed by the Department of Education to understand, among other items, the total cost of the student’s educational program, the amount covered by federal educational benefits, and their estimated student loan debt upon graduation; informing eligible students of their potential eligibility for federal financial aid before arranging private student loans; ending fraudulent and aggressive recruiting techniques on and off military installations and requiring compliance with the misrepresentation, incentive compensation and state authorization rules issued by the Department of Education; re-admitting and otherwise accommodating service members temporarily absent from a program due to service requirements; and the provision of individual education plans for aid recipients showing how they will fulfill graduation requirements and an estimated timeline for graduation.

Executive Order-Establishing Principles of Excellence for Educational Institutions Serving Service Members, Veterans, Spouses, and Other Family Members, April 27, 2012.

The EO is also found at 77 Fed. Reg. 25861, May 2, 2012. See the Education Law Review summary titled Executive Order Impacts Institutions Serving Active Duty Military and Veterans.

State Authorization/Distance Education Rules 

Notice of Proposed Rulemaking, 81 Fed. Reg. 48597, July 25, 2016

This is the redo (in part) of the rule that was struck down in 2010 by the U.S. Court of Appeals for D.C. This proposed rule will fix the procedural errors found to exist in the rulemaking process at that time. Many schools are now participating in State Authorization Reciprocity Agreements (SARA) which reduces some but not all of the burdens associated with offering distance education. This establishes requirements for institutional disclosures to prospective and enrolled students in programs offered solely through distance education. This includes disclosures that reflect actions taken against a distance education program, how to lodge complaints against a program that has misled them, and whether the program will lead to certification or licensure. If a state in which a University offers an online program is not covered by a SARA agreement, it still has to meet any existing regulatory requirements of the state where the online program is offered. A state may enforce its own consumer protection laws. Any additional location or branch campus in a foreign country must be authorized by an appropriate agency of that country. The proposed rule is summarized by Russ Poulin in a WCET post titled Department of Education State Authorization for Distance Ed Regulations-A First Look. The good news is the proposed rule recognizes SARA as a valid way of meeting state authorization requirements. As noted above, in non SARA states where the institution is offering distance education, institutions would have an ongoing to identify/document/disclose the complaint process in those states that their distance education students could use. 

Inside Higher Ed Article dated June 6, 2016: Final Push for State Authorization Rule

See also the Cooley LLP Media Alert dated 7-25-16 titled ED's Proposed Rules for Online Learning Presents New Compliance Challenges. This article has a good summary of the consumer disclosure requirements that will not be resolved by membership in SARA. 

June 19, 2015 Dear Colleague Letter on State Authorization, noting regulations effective July 1, 2015 on state oversight. See the Department website for more, and for clarification see Russ Poulin note below.

Update on the Five Types of State Authorization Regulations, July 2015 by Russ Poulin

Cooley LLP Client Alert on June 19, 2015 DCL on State Authorization

2013: Grade Change: Tracking Online Education in the United States. A report released by the College Board and the Babson Survey Research Group, sponsored by the Online Learning Consortium. Released Jan. 2015.

New web page for SARA/State Authorization

Final Regulations, Delay in  Implementation Date (State Authorization Enforcement by Federal Government), 79 Fed. Reg. 35692, June 24, 2014
The Department delays until July 1, 2015 the state authorization regulations for IHEs whose state authorization does not meet the requirements of the regulations. The Department provides this further extension for institutions in order to provide States with additional time to finalize processes for those institutions to be able to comply with the State authorization provisions in Sec. 600.9(a) and (b). Those provisions apply to an institution separately with respect to each State in which the institution has a main or additional location offering at least 50 percent of an eligible educational program.

See also the Russ Poulin write up titled U.S. Department of Education *Pausing* on State Authorization. He clarifies the difference between the notice above in the 6-24 Federal Register, which goes to authorization of institutions within a state and announcements by Ted Mitchell about the delay in the timeline for the Department to issue proposed distance education regulations. Russ notes that state regulations are still in place.

Also adding clarity is the Inside Higher Education article dated 6-26-14 Education Department will Pause on State Authorization Rule.

See also his updated post titled State Authorization: Education Pauses, Defense Follows and we Webcast it all.

6-3-14 Letter from WCET et al to Secretary Duncan criticizing the Department's latest draft of the state authorization rule which would require online programs to obtain approval in every state, even if state did not have an authorization requirement.

Issue Paper 2 State Authorization of Distance Education Providers as a Component of Institutional Eligibility: Released March 20, 2014

What Are Institutions Doing (or Not doing) about State Authorization Revisited. March 2013, a Joint Project of UPCEA, WCET, and Sloan-C

December 12,  2013 Powerpoint Update on State Authorization for Distance Education: Regulations and Reciprocity: By Russ Poulin, WICHE, presented in conjunction with UVM webinar series Legal Issues in Higher Education.

 Negotiated Rulemaking, Notice of Intent to Establish, 78 Fed. Reg. 69612, Nov. 20,2013
The committee will prepare proposed regulations to address program integrity and improvement issues. This is a request for nominations for negotiators who represent key stakeholder constituencies. Committee Topics are likely to be as follows: 
• Cash management of funds provided under the title IV Federal Student Aid programs, including the
use of debit cards and the handling of title IV credit balances.
• State authorization for programs offered through distance education or correspondence education.
• State authorization for foreign locations of institutions located in a State.
• Clock to credit hour conversion.
• The definition of ‘‘adverse credit’’ for borrowers in the Federal Direct PLUS Loan Program.
• The application of the repeat coursework provisions to graduate and undergraduate programs.
These topics are tentative. Topics may be added or removed as the process continues.

GEN-13-20 State Authorization Regulations: Documentation of Other Actions

Delay of Implementation Date for certain State authorization regulations, 78 Fed. Reg. 29652, May 21, 2013
This document provides for a further delay until July 1, 2014 of the implementation date for certain State authorization regulations, but only 34 CFR 600.9 (a) and (b)  which relates to the complaint process and authorization by name.  The delay is contingent upon the School obtaining an explanation from the State of how another one year extension will permit the State to modify its procedures to comply with Section 34 CFR 600.9. Note that 34 CFR 600.9(c) on state authorization was the subject of the court case below and at the present time, is undergoing the negotiated rulemaking process. This is the distance education portion of state authorization.

Final Report of The Commission on Regulation of Postsecondary Distance Education: On SHEEO page, includes Press Release, FAQ and Report

NACUANOTES: Vol. 11, No. 8 - Status of Federal Regulation of State Authorization March 29, 2013

WCET overview page on State Authorization

Dear Colleague Letter dated July 27, 2012 Guidance on Program Integrity Regulations Relating to Legal Authorization by a State (DCL: GEN-12-13) This guidance restates rules post APSCU case below.

Version 2.0 of the SHEEO Compendium of State Regulations

Fees by State as of Sept. 2012 (SHEEO survey)

Student Complaint Process by State (SHEEO survey Sept. 2012)

Association of Private Sector Colleges and Universities v. Arne Duncan,, Case No. 1:1-cv-00138,  (U.S. Ct. Appeals, D.C. Cir.) June 5th, 2012
In a sweet little decision, the Court of Appeals for the DC Cir. affirmed the viability of the Administrative Procedure Act, holding it had not been followed when promulgating the rules relating to distance education. While the victory may be short lived, and the damage may already be done, it was nice for schools to see the APA upheld.The state laws are still in place and must be followed.

The case was brought by APSCU in response to the Program Integrity Rule adopted by the U.S. Department of Education in 2010. These regulations became effective July 1, 2011, and addressed what colleges and universities must do to remain eligible for federal financial aid. The regulations affected a number of areas, including, schools’ accountability for the “gainful employment” of their graduates, incentive payments for recruiters, and federal oversight with respect to state regulation of distance education. A full summary of the rules can be found on the Department of Education web page.

The court overturned the rule[1] not based on its merits but because the rule was “not a logical outgrowth of the Department’s proposed rules.”  In other words, the notice-and-rulemaking process was flouted, in that colleges that might be affected  had no reason to believe that DOE was contemplating a set of regulations along the lines that they finally published – and therefore they had no reasonable opportunity to comment.

The incentive compensation provisions were upheld with the case sent back to the District Court so that the Department of Education can explain some technical matters, including how the regulation would affect recruitment of minority students.

The misrepresentation regulations were found to exceed the authority of the Secretary by covering students not subject to the Higher Education Act and by proscribing merely “confusing” statements. The court noted the law only applies to misrepresentations about the nature of a school’s educational program, financial charges or employability of graduates, and does not allow the promulgation of rules dealing with the institution’s relationship with the Department of Education or the broader category of “misrepresentation regarding the eligible institution”.

Other parts of the misrepresentation regulations were upheld,  so schools must still vigilantly monitor employees and contractors that could be  in the position of making false or misleading statements, especially to students or potential students.

[1] The text of the rule:  “If an institution is offering postsecondary education through distance or correspondence education to students in a State in which it is not physically located or in which it is otherwise subject to State jurisdiction as determined by the State, the institution must meet any State requirements for it to be legally offering postsecondary distance or correspondence education in that State.”

April 30th, 2012 SHEEO State Authorization Webinar

State Authorization Reciprocity Agreement: April 2012 Working Draft

Draft State Authorization Reciprocity Agreement (SARA) developed by the Council of State Governments (CSG). The Reciprocity Agreement seeks to establish a system whereby an institution’s authorization to offer educational programming by its home state would be recognized by other states in which it seeks to offer distance education programming and similar activity.

NAICU March 1, 2012  paper titled "State Authorization and Distance Education NAICU Background Information" by Susan Hattan

Excellent summary and roadmap of the many twists and turns and what steps schools should be considering now if they wish to position themselves to be in compliance by 2014 (for federal financial aid purposes) with the wide variety of state codes.

October 20, 2011 Dear Colleague Letter from Dept. of Education on Financial Aid Fraud and Distance Education

 Dear Colleague Letter on State Authorization Rules, April 20, 2011.
This Dear Colleague Letter sets back the enforcement date (effective date does not change from July 2011) on  the Distance Education/State Authorization rules until July 1, 2014 as long as the school offering distance ed is making a good faith effort to undertake any one or more of the following: 

  • Documentation that an institution is developing a distance education management process for tracking students' place ofresidence when engaged in distance education.
  • Documentation that an institution has contacted a State directly to discuss programs the institution is providing to students in that State to determine whether authorization is needed.
  • An application to a State, even if it is not yet approved.
  • Documentation from a State that an application is pending.

    The Department also promises to work with appropriate parties to develop a directory of appropriate parties to develop a comprehensive directory of State requirements. Note litigiation is still pending (as of the end of April 2011) on this entire issue.See WCET commentary on the Dear Colleague Letter. 

March 17, 2011 Dear Colleague Letter on Program Integrity

This letter addresses State authorization, incentive compensation, and misrepresentation. See question 15 and after for Distance Education information. A number of ambiguities remain unresolved.

See the ACE March 2, 2011 letter filed on behalf of 60 higher education associations and accrediting organizations, expressing concerns over the state authorization regulations on section 600.9 of the October 29, 2010 final program integrity rule. 

NACUA has created a Resource Page on the State Authorization rule.

Gainful Employment


NSLDS Gainful Employment User Guide issued June 2016

Gainful Employment Electronic Announcement #78: Providing Information on the process for calculation and release of GE Program Debt-to-Earnings (D/E) rates. May 31, 2016 

Gainful Employment User Guide Update posted October 15, 2015

Gainful Employment User Guide issued August 2015 by NSLDS

DCL ID: GEN-15-12 June 30, 2015 Regulatory Requirements Related to Gainful Employment Programs

Gainful employment rules generally apply to any educational program that leads to a certificate or other or other non-degree credential awarded by a public or private non-profit institution, regardless of the length of the program.

GE Electronic Announcement #55-Initial Chapters of Updated Gainful Employment Operations Manual Now Available June 15, 2015

 Association of Private Sector Colleges & Universities v. Duncan
Order from the United States District Court for the District of Columbia denying the plaintiff's motion for summary judgment and granting the defendant's cross-motion.

Gainful Employment Electronic Announcement 54 June 11, 2015*

Cooley LLP Client Alert 6/16/15 on EA 54

IFAP May 2015 FAQ on Gainful Employment Program Regulations**

How to Project Gainful Employment Rates: By Thompson Coburn LLP, 12-15-14 White Paper.

Step by Step Process for figuring out Gainful Employment new Rules and if they apply; published by Thompson Coburn LLP. November 2014.

Technical Corrections to Gainful Employment, Final Rule, 79 Fed. Reg. 71957, Dec. 4, 2014

Gainful Employment, Final Rule, 79 Fed. Reg. 64889, October 31, 2014

The reporting requirements set forth in 34 CFR § 668.6 are current through Dec. 31, 2016. For this year, due July 31, 2015. Due October 1 for subsequent years. Disclosures required will change from year to year. See Gainful Employment Electronic Announcement # 52, dated Feb. 11, 2105 for online reporting and user guide.

Under the new rules, programs will no longer be held accountable for their cohort default rates, and instead will only be evaluated based on their graduates' debt-to-earnings ratios. The regulations take effect on July 1, 2015. There is also a longer transition period for institutions seeking to use current debt to earnings to comply with the metrics.

The new rule ties gainful employment into state authorization. The expansion means that institutions will be required to inform students about programs licensure, certification, and accreditation for each GE program for each state in which it must meet the federal state authorization rules. However, at the moment there is not federal financial aid tie in to state authorization, so the rule as drafted is not yet enforceable. The final rules related to GE disclosures are effective on January 1, 2017. Current disclosure requirements apply through December 31, 2016. The CEO must certify, as part of the program participation agreement, that each of its eligible GE programs offered by the institution satisfies ED’s certification requirements, as follows:

(1) Each eligible GE program it offers is included in the institution’s accreditation by its recognized accrediting agency, or, if the institution is a public postsecondary vocational institution, the program is approved by a recognized State agency for the approval of public postsecondary vocational education in lieu of accreditation;

(2) Each eligible GE program it offers is programmatically accredited, if required by a Federal governmental entity or required by a governmental entity in the State in which the institution is located or in which the institution is otherwise required to obtain State approval under 600.9;

(3) For the State in which the institution is located and in all other States within the institution’s MSA, each eligible program it offers satisfies the licensure or certification requirements of those states so that a student who completes the program and seeks employment in those states qualifies to take any licensure or certification exam that is needed for the student to practice or find employment in an occupation that the program prepares students to enter; and

(4) For a new program, the program is not substantially similar to a program offered by the institution that, in the prior three years, became ineligible for title IV, HEA program funds under the D/E rates measure or was failing, or in the zone with respect to, the D/E rates measure and was voluntarily discontinued by the institution.

The school must receive written or other electronic acknowledgement of the prospective student’s or third party’s receipt of the disclosure template. See Gainful Employment Disclosure Template that was releasted in the GE Electronic Announcement #50. The generated output document has to be used by Jan. 31, 2015.

Noted in the final rule at pp. 64950-1:

As reflected in changes to Sec. 668.404(e), we do not issue D/E rates for a program if the number of
verified matches is fewer than 30. If the number of verified matches is  fewer than 30 but at least 10, we provide the mean and medium earnings data to the institution for disclosure purposes under Sec. 668.412. 

For a summary of the rules see the Chronicle article on October 30, 2014.

ACE Comments (May 27, 2014) on proposed Gainful Employment Rules
See also the Chronicle article titled For-Profit Colleges Decry Gainful Employment Rule as Arbitrary and Biased, May 27, 2014, which includes a link to a 100 page report commissioned by APSCU.


APSCU v. Duncan and U.S. Department of Education, Decision Action 11-1314 (U.S. Dist. Court (DC)(March 19, 2013) Opinion by U.S. Dist. Court denying motion by the Department of Education to amend the court’s earlier judgment contained in its opinion issued June 30, 2012 vacating the Gainful Employment-Debt Measures Rule issued by the Department. In its earlier decision, the court had also vacated the reporting requirements of the Gainful Employment Reporting and Disclosure Rule (75 Fed. Reg. 66,832, 66,835-66,844), (which among other items required institutions to report information needed to identify individual students enrolled in gainful employment programs and the institutions they attended) because absent the Debt Measures rule the Department could not demonstrate the reporting obligations were necessary for the operation of programs authorized by Title IV, as required by 20 U.S.C. §1015c.  

APCU v. Duncan, No. 11-1314 (RC) U.S. Dist. Court for the District of Columbia, June 30, 2012. This decision vacated the gainful employment debt measures rule. The court finds that the “debt repayment” measure, requiring that at least 35% of a gainful employment program’s former students repay their federal loans was arbitrary and not a result of reasoned decision-making, because the Department’s proffered rationale for the rule could justify any percentage.Other debt measures aspect of the rule were overturned not for lack of sound reasoning, but because they were intertwined with the unsound rule.The court further vacates the Gain Employment Program Approval Rule (75 Fed. Reg. 66,665 (October 29, 2010) because the program approval process is centered on the debt measures; and also vacates the reporting requirements of the Reporting and Disclosure Rule (75 Fed. Reg. 66,832, 66,835-66,844). The court leaves intact the disclosure requirements of the Disclosure rule.The decision was followed up by a July 6th Announcement by the Department of Education stating IHEs are not required to submit gainful employment reports for the just ended 2011-2012 award year. See Judge's Ruling on Gainful Employment Gives Each Side Something go Cheer in the Chronicle on July 2, 2012 


Credit Hour Rules

NASFAA Getting it Right: Analyzying the Accuracy of Federal Burden Estimates for Title IV ComplianceThe paper points to an inverse relationship between administrative reporting requirements and one-on-one financial aid counseling—e.g. the more time aid administrators spend attempting to comply with regulations, the less time they have to attend to the needs of students and their families.Chart at end shows map for rulemaking, not always followed. Released Nov. 19, 2103. See the Chronicle note on same.

ACE Letter to US Senate Committee   April 26, 2011 American Council on Education letter to Congress on behalf of 70 organizations asking that the Committee assist with blocking two regulations issued as part of the program integity rule. The letter takes the postion that the distance education and credit hour rules invite inappropriate federal interference with campus decisions, in violation of the DOE's enabling legislation at 20 USC 3403.

Dear Colleague Letter: GEN--11-06, March 18, 2011, Guidance to Institutions Regarding Credit Hour Definition


ACE Letter Opposing Definition of Credit Hour in Program Integrity Rules and asking for rescission, Feb. 16, 2011. This portion of the program integrity rules dealing with credit hours was  dealt with in the negotiated rulemaking, but the consensus reached was abandoned in the draft regulation. ACE states the rule will "divert time and money from productive academic investment to detailed compliance reporting."


NCES and OPE Announce Release of the HEOA Net Price Calculator

The net price calculator is a template that schools can use to create the net price calculator that schools must have on their websites by Oct. 29, 2011. Schools may use the Department's template, or develop their own as long as it uses the data elements in the DOE template. Schools are encouraged to make this tool available sooner if possible. The net price calculator uses both student entered and school provided data to come up with an estimated price of attendance, which uses the formula of prince of attendance minus grant aid. Schools might want to note when posting that these estimate are not binding upon the institution, but rather a good faith estimate based upon price of attendance and financial aid provided to students in a given income category in a given year.

GAO Report on Incentive Compensation Violations (Feb. 23, 2010)
Issued pursuant to a study mandated by HEOA. Contains a good summary of the incentive compensation ban as applied to recruitment of students, as well as a summary of the safe harbor regulations. 

Final Regulations, Federal Perkins Loan Programs, Federal Family Education Loan Program, and Wm. D. Ford Federal Direct Loan Program, 74 Fed. Reg. 55972 October 29,2009

These final rules are effective July 1, 2010, but lenders, guarantee agencies and loan servicers may at their discretion implement then Nov. 1, 2009. There are no differences between final and proposed resulting from public comments.

Final Regulations; Institutional Eligibility Under the Higher Education Act of 1965, as Amended, and the Secretary's Recognition of Accrediting Agencies, 74 Fed. Reg. 55413 Oct. 27, 2009
Effective July 1, 2010. The Secretary amends its regulations governing institutional eligibility and the Secretary's recognition of accrediting agencies. These regs implement changes resulting from
enactment of the Higher Education Reconciliation Act of 2005 (HERA), and the Higher Education Opportunity Act (HEOA), and clarify, improve, and update the current regulations.

Final Regulations; Institutions and Lender Requirements Relating to Education Loans, Student Assistance General Provisions, Federal Perkins Loan Program, Federal Family Education Loan Program, and William D. Ford Federal Direct Loan Program, 74 Fed. Reg. 55625 Oct. 28, 2009
Effective July 1, 2010, some of the provisions may be implemented sooner by the institutions.

Department of Education Dear Colleague Letter December 2008: Provides a Summary (219 pages!) of the HEOA

ACE Analysis of Higher Education Act Reauthorization: This document contains a concise summary of the many new reporting, disclosure and other compliance requirements included in the Higher Education Equal Opportunity Act. (HR 4137) See also Section 1098 of the law as revised, which contains text requiring the Advisory Committee on Student Financial Assistance to develop and maintain an information clearinghouse to help institutions of higher education understand the regulatory impact of the Federal Government on institutions of higher education from all sectors, in order to raise awareness of institutional legal obligations and provide information to improve compliance with, and to reduce the duplication and inefficiency of, Federal regulations. See the AAU comparison of select provisions of the Act. See The Department of Education web page on implementation of the HEOA. ED must publish by Nov. 1, 2009 any Title IV and Federal Work Study regulations that will be in effect for the award year beginning July 1, 2010.

See the NACUA resource page on the HEOA for more information on the new regulations.

NAICU HEA 101 President's Quick Guide to the New Law: Includes a checklist of the 24 key issues that affect most colleges. Each quick take gives a brief summary of the new law; tells you when each provision goes into effect, suggests which offices might need to take action; and directs the reader toward additional information.

The Higher Education Opportunity Act: New Reporting and Disclosure Requirements for Universities Sept. 16, 2008 NACUANOTE by NACUA member Kate Tromble.

The Higher Education Opportunity Act II: Student Lending Related Reporting and Disclosure Requirements, NACUANOTE Sept. 16, 2008 by NACUA member Kate Tromble (Drinker Biddle).

Additional Certification Requirement Under Higher Education Opportunity Act:

20 USC § 1011m Certification regarding the use of certain Federal funds. Effective August 14, 2008 each institution must annually "demonstrate and certify" to the Secretary of Education that it has not used any funds under the Higher Education Act to attempt to influence a member of Congress in connection with any federal grant, contract, loan, or cooperative agreement. No student aid funding under HEA may be used to hire a registered lobbyist or to pay for securing an earmark. See the NAICU Quick Guide on this new provision.

Student Loan Sunshine Provisions in the HEOA (Effective August 14, 2008)
A number of changes to the statute (45 pages) were made by this law that are intended to prevent conflicts of interest. Issues include prohibitied inducements, new disclosures to students, and a requirement for a code of conduct. Schools can be held liable for actions of the institution affiiated organizations, such as an alumni org, an athletic org, a professional organization, etc. See the NAICU HEA Quick Guide for more on this issue, and complete statutory text. Note that to the extent the new law conflicts with the November 2007 final regulations in this area the regulations are superseded by the new law.


72 Fed. Reg. 62014, (Nov. 1, 2007) Final Rule effective July 1, 2008 on electronic disbursement of Title IV Funds. Regulates the use of bank debit cards to disburse financial aid, along with other items. The final rule also amends the definition of full time student, academic year, graduate or professional student, and undergraduate student, among other terms. Section 668.164(b)(1)(ii) is amended to make clear that an institution may disburse Perkins Loan funds, within each payment period, at such time and in such amounts as it determines best meets the student's needs. Another change requires the use of the payment period that ends later for Return of Title IV Funds calculations for a student who withdrew from a credit hour program that is measured in nonstandard terms that are not substantially equal in length, when the student received aid under both payment period definitions--one for Title IV grant and Perkins Loan funds, and one for FFEL and Direct Loan funds.

These regulations require an institution to disburse directly to a student, as soon as possible, but no later than 45 days after the date of the institution's determination that the student withdrew, any amount of a post-withdrawal disbursement of grant funds that is not credited to the student's account. An institution may not delay its disbursement processes in order to ascertain whether a student wishes to receive the grant funds to which the student is entitled. However, while the institution is processing the disbursement it may, at its discretion, notify the student that it may be beneficial to turn down all or a portion of the grant funds to preserve the student's grant eligibility for attendance at another institution. Of course, if a student independently contacts the institution and declines receipt of a grant disbursement, the institution is not required to make the disbursement.

72 Fed. Reg. 61959 (Nov. 1, 2007) Final Rule to Strengthen and improve the administration of the Federal Perkins Loan Program, Federal Family Education Loan Program, and William D. Ford Federal Direct Loan Program. These final regulations, effective July 1, 2008, address preferred lender lists, prohibited inducements, and permissible activities.

Selected Case law

United States ex rel. Jeffrey E. Main v. Oakland City University, No. 05-2016 Amicus Brief of American Council on Education (ACE) filed in support of the Defendant/Appellee Oakland City University's petition for rehearing and rehearing en banc of the October 20, 2005 Seventh Circuit Court of Appeals opinion in this case. The case involves an alleged violation of the Title IV rules prohibiting incentive compensation. As the case was brought as a qui tam action, the holding by the court in favor of Main greatly increases the chance that universities accused of breaking one of the incentive compensation prohibition rules could also be accused of making a false claim against the government.



Checklist for Cash Management Compliance by NACUBO* 3-21-16

Cooley Client Alert: ED Adopts Changes to Clock and Credit Hour Rules 11-18-15

DCL ID : GEN-15-13 July 7, 2015 Undue Hardship Discharge of Title IV Loans in Student Bankruptcy Proceedings: Two step analysis by the holder of the note.

June 2, 2015 Letter from Department of Education on Enforcement of Statutory Prohibition on Incentive Compensation*

The Department may recover all Title IV funds received by an institution over a particular period if the funds were received through implementation of a policy through which an institution recruited students in violation of the incentive compensation prohibition. The Department may also impose fines or revoke an institution's eligibility to violate in Title IV programs.

Dear Colleague Letter on Third Party Servicer Institutional Requirements and Responsibilities, Jan. 9, 2015. GEN-15-01

Dear Colleague Letter on Competency Based Education Programs: Dec. 19, 2014. GEN14-23

NAICU comments August 28, 2014  on Harkin's  draft proposal to reauthorize the Higher Education Act of 1965, entitled the Higher Education Affordability Act (HEAA),


July 24, 2014 DLC ID: GEN 14-14 Additional Guidance on the S.Ct. Ruling on DOMA and Implications for the Title IV Student Financial Assistance Programs. The Letter states that, for all income-driven repayment plan purposes, the term "spouse" includes a same-sex spouse as long as the borrower and spouse were legally married in a jurisdiction that recognizes the marriage, regardless of where the couple resides. It also declares that a stepparent who is of the same sex as the dependent student's biological or adoptive parent, who is legally married to the biological or adoptive parent in a jurisdiction that recognizes the marriage, and who meets the definition of "parent" in 34 CFR 668.2 may apply for a Direct PLUS Loan.

ACE Letter dated 8-29-14 to Senator Tom Harkin commenting (pro and con) on the the HEA reauthorization discussion draft.

DCL ID: GEN-13-25 Supreme Court Ruling on DOMA and implications for Title IV
For purposes FAFSA and Title IV student financial aid programs, students or parents in same-sex unions are considered married if their marriage took place in a jurisdiction where it was considered legal.

Negotiated Rulemaking 2013-2014 U.S. Dept. of Education: See Issue Paper # 2 on State Authorization Distance Education

Net Price Calculator Template: Posted by DOE January 2014.

Each postsecondary institution that participates in Title IV federal student aid programs must post a net price calculator on its website that uses institutional data to provide estimated net price information to current and prospective students and their families based on a student's individual circumstances. Institutions can meet this requirement by using the U.S. Department of Education's Net Price Calculator template

Dec 13, 2013 Dear Colleage Letter from U.S. Dept. of Education on how the Supreme Court ruling on the Defense of Marriage Act will affect financial aid calculations. Under the guidance, the Department will recognize any marriage of a student or parent that is recognized as legal in the jurisdiction where the marriage was celebrated – regardless of where the relevant student lives or attends college.

ACE and other higher education associations August 2, 2013 letter submitting comments on Reauthorization of the Higher Education Act. See pages 19 forward for comments on the regulatory burden and confusion caused by subregulatory guidance. See ACE web page for background on letter.

GAO Study April 2013: Higher Education Experts Cited a Range of Requirements as Burdensome

The Heroes Act-Updated waivers and modifications of statutory and regulatory provisions governing the FSA programs, 77 Fed. Reg. 59311 (Sept. 27, 2012)

Information on handling financial aid (and granting discretion to make modifications) when the student is called to perform military service or is affected by a disaster, war or other military operation.

IFAP Consumer Information
web page: Great compliance tool.

This assessment describes the requirements for the consumer information that a school must provide to students, the Department of Education, and others. Contains resources and checklists for the numerous required financial aid disclosures (at least A-Z by now).

 Financial Aid Shopping Sheet: Press Release, Letter to Colleges re purpose, and actual form.

The letter states that use of the format will meet the requirements of Executive Order 13607 requiring institutions receiving federal funds under military and veterans educational benefits programs to provide prospective veteran and service member students with a personalized and standardized form describing the costs of the educational program and the amount of that cost that may be covered by Federal education benefits and financial aid.

Department of Education 4/25/12 letter by David Bergeron announcing the Department’s intent to establish a negotiated rulemaking committee to prepare proposed regulations for Federal Student Aid Programs under the Higher Education Act.  The committee would develop proposed regulations designed to prevent fraud and ensure proper use of Title IV funds, and to improve and streamline campus-based Federal Student Aid programs pursuant to the Department’s Plan for Retrospective Analysis of Existing Regulations.

DCL ID:  GEN-11-17 Oct. 20, 2011  Fraud in Postsecondary Distance Education Programs

State Higher Education Executive Officers (SHEEO) listing of the regulatory requirements for offering postsecondary education in each state. Very helpful for schools seeking licensing for out of state programs.

Dept. of Education Q and A on Program Integrity Regulations

Navigating the Regulatory Highway: A Practical Guide to Interpreting, Implementing and Complying with DOE's Program Integrity Rules: June 2011, updated July 26, 2011 in light of recent DOE guidance on gainful employment. Clarifications on incentive compensation were also included.

This paper was presented at the NACUA Annual Conference by Terry Hartle, American Council on Education, Laurence Pendleton, Tennessee Board of Regents, Laura Warren, DePaul University, and Jay Urwitz, Wilmer Cutler Pickering Hale and Dorr LLP. Posted with permission of the authors.

NACUA Notes June 23, 2011 U.S. Department of Education Program Integrity Rules - Part I

NACUA Notes June 24, 2011 U.S. Department of Education Program Integrity Rules - Part II

NACUA Notes August 9, 2011 U.S. Department of Education Program Integrity Rules - Part III

State Higher Education Executive Officers (SHEEO) State Authorization Resources and Directory

This page is created to assist with licensing to comply with the distance education rules.


2009 Program Review Guide


Implementing the HEOA: A checklist for Business Officers by NACUBO 12-1-09

College Costs Paper by Susan Hattan of NAICU (for NACUA Compliance Conference: Paper updated 11-17-09)

Student Loan Sunshine Provisions by Susan Hattan of NAICU created for NACUA Compliance Conference: Paper updated 11-17-09)

The Higher Education Opportunity Act of 2008

ACE Analysis of Higher Education Act Reauthorization: This document contains a concise summary of the many new reporting, disclosure and other compliance requirements included in the Higher Education Equal Opportunity Act. (HR 4137) See also Section 1098 of the law as revised, which contains text requiring the Advisory Committee on Student Financial Assistance to develop and maintain an information clearinghouse to help institutions of higher education understand the regulatory impact of the Federal Government on institutions of higher education from all sectors, in order to raise awareness of institutional legal obligations and provide information to improve compliance with, and to reduce the duplication and inefficiency of, Federal regulations.

IFAP Library: Information for Financial Aid Professionals for Dear Colleague Letters and presentations from the annual NASFAA Conference.

Federal Student Aid training for Financial Aid Professionals on HERA.



Higher Education Regulations Study: See the Press Release describing the Advisory Committee's plans to move beyond Title IV regulations and begin to examine the impact of all federal regulations within the Higher Education Act as a second phase of the congressionally mandated Higher Education Regulations Study. The Committee encourages the public to help identify regulations in higher education that are duplicative, no longer necessary, inconsistent with other federal regulations, and/or overly burdensome. Specifically, the Advisory Committee seeks to quantify the level of burden placed on institutions by such regulations. Comments will be taken by the Advisory Committee staff or through the Committee's public comment webpage or by telephone (202-219-2099).Section 1098 of the HEOA (2008) tasked the Department of Education with looking at the regulatory burden imposed on IHEs. Section 1106 of the HEOA mandated a study by the National Academy of Sciences to be entered into by the Secretary of Education.  To date this study remains unfunded.

Update 2/13/15 As of Feb. 2015, the National Academy of Sciences role had morphed into a focus on the regulatory burden for research universities. See the Committee on Federal Research Regulations and Reporting Requirements: A New Framework for Research Universities for the 21st Century.


At the same time, the overall regulatory burden was getting some attention by Congress.

The  Report of the Task Force on Federal Regulation of Higher Education was released on 2-13-15. This  report was a joint product funded by Lumina, hosted by ACE, and created by Senators Lamar Alexander and Barbara Mikulski.

See Congressional Report Blasts 'a Jungle of Red Tape' that Ensnares Colleges, by Kelly Field, in the Chronicle, posted 2-3-15.















updated 10-29-16 to add final Borrower Defense Rules 

updated 1-2-17 to add final Program Integrity Rules