Summary of Federal Laws
Financial Aid Programs
Higher Education Act of 1965 as amended
|Director of Financial Aid|
|Assistant Director Financial Aid|
|Assistant Director, FA, Law School|
|Manager of the Federal Work Study Program|
|Senior Associate Director of Financial Aid|
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.
Increase in Civil Monetary Pentalties, 77 Fed. Reg. 60047, Oct. 2, 2012
Effective October 2, the Department’s civil monetary penalties increase pursuant to the Federal Civil Monetary Penalties Inflation Adjustment Act. The Department increased seven civil monetary penalties, including an increase in the maximum fine for violations of the Higher Education Act or its implementing regulations from $27,500 to $35,000. The increases apply only to violations that occur after the effective date of the adjustments.
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)
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.
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.
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.
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.
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.
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
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.
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, et.al, 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 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.
 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.”
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.
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.
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.
How to Project Gainful Employment Rates: By Thompson Coburn LLP, 12-15-14 White Paper.
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.
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
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.
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.
Gainful Employment Notice of Proposed RuleMaking (issued March 14, 2014) to be published in Federal Register at a later date. 841 pages. For a shorter summary, see the March 17, 2014 Chronicle of Higher Education Article titled "Gainful Employment: What's New? What's Missing? And to Whom does that Matter?" by Goldie Blumenstyk. The key cut off for application of the rule is whether or not the program has 30 or fewer recipients of federal student aid in a particular program.
Also note: So is there anything in the new version that advocates for a stricter rule will be cheering about?
Yes. According to the department, the new rule would require colleges to certify that each of their gainful-employment programs "meet applicable institutional or program-level accreditation requirements and state or federal licensure standards." That was a priority for veterans groups and other student-advocacy groups concerned that students were finding themselves unable to enter certain careers because the program they had enrolled in wasn't properly licensed. Soonest this would take effect is July 1, 2015.
DOE web page with Notice of Negotiated Rulemaking on Gainful Employment, new proposed rules. See the 2011 Final Rule v. the 2013 Draft Regulation. See also Chronicle article August 30, 2013 titled Education Dept. Releases Draft Language for New Gainful Employment Rule.
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.
Gainful Employment Electronic Announcement #41-Requirements for Adding New Educational Programs, Nov. 21, 2012. Summarizes covered gainful employment programs and reinstate program regulations in place prior to July 1, 2011. For Title IV institutions, this includes the following:
- Does not lead to an associate, baccalaureate, professional, or graduate degree; and the program does not prepare students for gainful employment in the same or related recognized occupation as an education program that has previously been recognized as an eligible program by the Secretary. See 34 CFR 600.10(c)(2).
- Is a short-term program of at least 10 weeks of instructional time and between 300 and 599 clock hours in length and that is required to meet additional eligibility requirements for completion and placement rates. See 34 CFR 668.8(d), (e)(2) (requiring programs to submit an attestation).
- Will be offered by an institution that the Department has notified must apply for approval of an additional educational program or a location. See 34 CFR 600.20(c)(1)(v).
- Will lead to a higher, previously unapproved, level. For example, a Bachelor's degree program at an institution that previously offered only certificates and Associates degrees. See 34 CFR 600.20(c)(2).
- Is a Direct Assessment program. See 34 CFR 668.10(b).
- Is a Comprehensive Transition and Postsecondary (CTP) Program. See 34 CFR 668.232.
Gainful Employment Electronic Announcement #42 - 2011-2012 Disclosures for Gainful Employment Programs, Nov. 23, 2012.
States that institutions must now update their Gainful Employment program disclosures for the 2011-2012 award year not later than January 31, 2013 and provides additional information regarding the content, format and method of GE program disclosures.This must include a disclosure on each program website with a linkback to the main consumer disclosure page, and disclosures must be on all promotional material, or must include a link to the web page. Note also the disclosure must be ADA compliant and in an open format that is platform independent and machine readable.
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
Gainful Employment Operations Manual (may 2012)
This manual contains information about the 2010 and 2011 gainful employment regulations, and includes guidance regarding implementation and compliance. Geared toward data reporters.
Gainful Employment Electronic Announcement # 31-Gainful Employment Placement Rates and NCES Methodology, Dec. 22, 2011
Until further notice institutions do not have to disclose placement rate information unless they are required by an accreditor or state agency to calculate a placement rate. This is due to the fact that NCES has been unable to develop a job placement rate methodology.
Proposed Rule on Application and Approval Process for Gainful Employment Programs, 76 Fed. Reg. 59864, Sept. 27, 2011.
The proposed rule would amend the application process for new gainful employment programs set forth in the rule issued by the Department on October 29, 2010 by limiting the new gainful employment programs for which an institution must apply to the Department to those programs that are (1) the same as, or substantially similar to, failing programs that the institution voluntarily discontinued or programs that became ineligible under the debt measures for gainful employment programs, and (2) programs that are substantially similar to failing programs. The proposed rule would also revise the documentation that must be included in an institution’s application to establish eligibility of a new gainful employment program.
Gainful Employment Reporting Date for 2010-2011 Reporting Year, Notice of Deadline Date, 76 Fed. Reg. 46282, August 2, 2011. This notice establishes November 15, 2011 as the deadline for reporting to the Department required information on Gainful Employment Programs pertaining to the 2010-2011 award year. The Notice also states that while information for earlier award years is due to the Department by October 1, 2011, the Department will continue to accept information for those years through November 15, 2011.
Career College Association v. Duncan, Case filed July 20, 2011 in U.S. District Court challenging the constitutionality of the gainful employment rules.
Final Regulations, Program Integrity: Gainful Employment-Debt Measures, 76 Fed. Reg. 34386, June 13, 2011. Effective July 1, 2012. These rules apply to programs that provide training related to gainful employment and thus apply to both for profit institutions and to certificate programs at not for profit and public institutions. The rule requires disclosure to the public how the program leads to gainful employment, by meeting one of three metrics: at least 35 percent of former students are repaying their loans (defined as reducing the loan balance by at least $1); the estimated annual loan payment of a typical graduate does not exceed 30 percent of his or her discretionary income; or the estimated annual loan payment of a typical graduate does not exceed 12 percent of his or her total earnings. See the Press Release on this rule.
Final Regulations, Program Integrity: Gainful Employment--New Programs, 75 Fed. Reg. 66665, (October 29, 2010)
Effective July 1, 2011, this new rule establishes a process through which institutions must apply for approval of new educational programs designed to lead to gainful employment in recognized occupations (as distinguished from Associates, Bachelor’s, Graduate or Professional degrees). Under the rule, institutions must notify the Secretary at least 90 days before the first day of class when it intends to add such an educational program. In the notice, the institution must describe how it determined the need for the program and how it is designed to meet local, regional or national market needs; describe how the program was reviewed, approved by or developed in conjunction with external advisory committees or agencies; and submit documentation that the program has been approved by its accrediting agency or is otherwise encompassed in the institution’s current accreditation.
Final Regulations, Program Integrity Issues, 75 Fed. Reg. 66832, (Oct. 29, 2010) Includes information on Gainful Employment Reporting (October 1, 2011) and Disclosure Requirements (July 1, 2011).
Determining Whether an Educational Program is a Gainful Employment Program June 24, 2011 Gainful Employment Electronic Announcement #11
June 1, 2011 Gainful Employment Electronic Announcement #5-Procedures for Reporting New Educational Programs That Prepare Students For Gainful Employment in a Recognized Occupation
Department of Education Gainful Employment Resource Page:
This page will have information and updates as they become available. Note the disclosure of consumer information deadline is July 1, 2011, and the deadline for reporting is Oct. 1, 2011. See the FAQ on Gainful Employment.
Updated and Corrected May 20, 2011 Dear Colleague Letter on Gainful Employment Regulations, clarifying that only teacher certification programs that result in a certificate awarded by the institution are covered by the rule. See also the IFAP page on Gainful Employement.
Dear Colleague Letter: Implementation of Regulatory Requirements Related to Gainful Employment Programs, Dated 4-20-11.
This letter sets out the situations in which the new gainful employment regulations will apply to non-profit IHEs.
The IHE will be subject to this rule if it offers any of the following:
Nondegree programs, including all certificate programs. Certificate programs include undergraduate certificate programs, postbaccalaureate certificate programs, graduate certificate programs, and postgraduate certificate programs. Note that awarding students one or more certificates as part of a degree program does not create GE programs based upon the awarding of the certificate(s).
Teacher certification programs, including both programs that result in a certificate awarded by the institution and those where the institution itself does not provide a certificate but which consist of a collection of course work necessary for the student to receive a State professional teaching credential or certification.
Approved "Comprehensive Transition Programs" for students with intellectual disabilities.
If the answer is yes, then schools are required to report certain information about the students enrolled in each GE Program during an award year. However, these rules do not apply if any of the following exceptions apply:
The following educational programs offered by these institutions are not subject to the new GE Program regulations -
Programs that lead to a degree, including associate's degrees, bachelor's degrees, graduate degrees, and professional degrees.
Programs that are at least two years in length that are fully transferable to a bachelor's degree program.
Preparatory courses of study that provide course work necessary for enrollment in an eligible program.
The first reports are due no later than Oct. 1, 2011, and covers years starting with the 2006-2007 award year. The reporting is not limited to students receiving Title IV aid. If the school does not have an SSN for the student, they are not be included.
Schools are to use the Enrollment Reporting Process (the reporting system currently used to submit enrollment data to the National Student Loan Data System). A preliminary list of reportable data has been released by the Department.
The IHE must also update its Consumer Information Disclosure page to include a page with information about each of the GE programs so that prospective students have this information. This should also be included with promotional materials made available to students. There will be a specific form that must be used, to be distributed by DOE. The following information will have to be disclosed:
The name and U.S. Department of Labor's Standard Occupational Classification (SOC) code of the occupations that the program prepares students to enter, along with links to occupational profiles on the U.S. Department of Labor's O*NET Web site or its successor site.
The on-time graduation rate for students completing the program.
The tuition and fees the institution charges a student for completing the program within normal time.
The typical costs for books and supplies (unless those costs are included as part of tuition and fees), and the cost of room and board, if applicable.
The job placement rate for students completing the program.
The median loan debt incurred by students who completed the program (separately by Title IV loans and by other educational debt to include both private educational loans and institutional financing) as provided by the Secretary.
Other information the Secretary provided to the institution about the program.The IHE must also notify DOE when it intends to add a new GE Program. Specific information on this is contained in the regulations (34 CFR 6000.10(c) and 600.20(c) and (d) and also in the Dear Colleague Letter.
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.
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."
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.
Dear Colleague Letter on Third Party Servicer Institutional Requirements and Responsibilities, Jan. 9, 2015. GEN-15-01
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.
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.
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).
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.
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.
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.
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.
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)
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.
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.