Office of General Counsel

Summary of Federal Laws

Financial Aid Programs

Higher Education Act of 1965 as amended

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

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

General Information on the Higher Education Act

The 1976 amendments require the university 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. If an institution causes a Federal Stafford, Federal SLS, or Federal PLUS Loan to be disbursed to an ineligible student or Federal PLUS Loan borrower for which it is not liable in accord with 34 C.F.R. § 668.138, it shall assist the Secretary in recovering the funds by notifying the lender that the student has failed to establish eligibility. See 34 C.F.R. § 668.139.

Per the 1998 amendments, if a student is convicted of a federal or state offense involving possession or sale of a controlled substance, the student will be ineligible to receive student aid for specified periods of time. Beginning in academic year 2000-01, the Department of Education will collect information from each school regardin costs incurred by the university in providing education, the cost of attendance, the amount of financial assistance received, and the number of students receiving the same. Information collected will be made available to parents and students. Federal financial aid is not subject to garnishment. See 20 U.S.C. § 1095(a) (Section 490 of the Higher Education Amendments of 1998, 112 Stat. 1753); 34 C.F.R. § 668.161(b).

April 25, 2013 Committee on Education and the Workforce: Letter seeking input from stakeholders on Higher Education Reauthorization Act. The letter asks for responses to be sent by August 2, 2013 via HEA.Reauth@mail.house.gov and encourages citation to specific statutory sections and language, and the details and rationale for suggested changes.

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.

DCL ID: GEN-13-10 March 19, 2013 Letter on Applying for Title IV Eligibility for Direct Assessment (Competency Based Programs)

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

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.

Deadline Extended for Campuses to Sign VA's Principles of Excellence For Serving Veterans and Service Members:

On July 2, 2012 VA notifed campuses that they have until August 1st to express intent to comply with the Principles of Excellence. See the ACE summary with a link to the ACE/NACUBO June 22 letter expressing concern about lack of clarity in how the Principles are expressed.

May 31, 2012 Dept. of Veterans Affairs  letter sent requesting that institutions affirm by June 30 their intent to comply by the end of academic year 2012-2013 with the Principles of Excellence for Educational Institutions Serving Service Members, Veterans, Spouses and Other Family Members set forth in Executive Order 13607.

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.

March 30, 2012 DoD announcement stating DoD had revised its earlier Memorandum of Understanding (MOU) governing institutional participation in the Department’s military tuition assistance program, and that the revised memorandum will soon be posted to the Department’s MOU web page

See also the 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.

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

These new rules, effective July 1, 2011  define the requirement of “state authorization” to offer post-secondary education, including authorization to operate in other states, and including 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. See the Department of Education summary for a version shorter than the 145 page version of the rules.

State Authorization/Distance Education Rules 

Negotiated Rulemaking Committee, Public Hearings, 78 Fed. Reg. 22467, April 16, 2013. This announcement sets times and places for public hearings on a number of Title IV topics, including state authorization. The meeting in DC is set for May 21, 2013 at the U.S Department of Education from 9:00 am to 4:00 pm. Those wishing to present comments at the hearing must register at negreghearing@ed.gov.For the summary of the variety of topics to be addressed, see Chronicle article dated 4/15/13 titled Education Dept. to Renew Efforts at Gainful Employment and State-Authorization Rules.

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

Jan. 23, 2013 GEN-13-02 State Authorization Regulations Effective Date Extension-Final Year

A reminder to postsecondary institutions and states that schools are required to have certain types of State oversight and approvals in order to participate in Title IV programs. The stay of enforcement until July 1, 2013 will expire on that date, and after that date the University may lose its eligiblity for financial aid.

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

Each survey is updated at the top iwth the date of the latest update for the survey, with changes highlighted in yellow.

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[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.

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.
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• 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.
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• An application to a State, even if it is not yet approved.
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• 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.

Authorization and Screening Hurdles for Distance Ed program, short summary by Alan Contreras

 1. The state you are in. In your case this is DC, so you have a Congressional charter or an operational license from the DC government, probably a very old one that everyone has forgotten is there. That document, and that document alone, is your legal authority to issue degrees. It's not your educational authority, it's your degree authority.
 2. Your institutional accreditation. (i.e. Middle States)
 3. Any accreditation that is the norm for a program, e.g. ABA for the law school, APA for professional psychology.
 4. A license or authorization to offer courses or degrees in each other state in which you do so, unless that state's own laws exempt such activity. Some states regulate distance ed, some don't.
 5. Approval (in the case of a program leading to licensure and practice) of your program AND its clinicals/ placements by the proper professional licensing board in each state.
 6. Approval as in (5) above for actual licensure in each state, which can involve slightly different issues than in (5) above.

See Mr. Contera's 2009 paper on the legal basis of degree authority, available on the SHEEO web site.
(book on state authorization forthcoming)
 

Gainful Employment

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).
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• 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).
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• 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).
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• 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).
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• Is a Direct Assessment program. See 34 CFR 668.10(b).
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• 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.
 

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 

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.

See also the ACENET Summary and a link to other commentary, the ACE two page write up of the new rules, and the ACE GE Program Q and A and decision tree at the end of the Q and A.

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.
  
  

June 7, 2011 CUA OGC memo on Gainful Employment requirements generally

June 21, 2011 CUA OGC follow up memo on Gainful Employment on disclosure; advertisements and new programs***

Credit Hour Rules

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.

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.

Resources

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

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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.

updated 4/9/13 CCR

updated 4/15/13 to add  Final Report of Commission on Regulation of Postsecondary Distance Ed

updated 4/17/13 to add neg reg public hearings

updated 5/13/13 by mlo to add 4/25/13 Committee Letter seeking input on reauthorization of HEA