Client Alert: Department of Education Issues Proposed Regulations on Distance Education and Innovation

On April 1, 2020, the U.S. Department of Education (“ED”) issued a notice of proposed rulemaking on distance education and innovation in higher education. Institutions of higher education that closely monitored the work of the Negotiated Rulemaking Committee last year will find familiar language in the proposed regulations. Meanwhile, institutions that recently transitioned their on-campus classes to distance learning in response to COVID-19—and which remain uncertain about when on-campus classes will resume—will want to track this regulatory development closely.

To assist clients in their review, we’ve summarized the key changes to Section 600 (pertaining to institutional eligibility under the Higher Education Act) and Section 668 (pertaining to student assistance general provisions) from the proposed rule:

Section 600.2 Definitions

Creates a definition for “academic engagement” by incorporating activities recognized as “academic attendance” and “attendance at an academically-related activity” from § 668.22. Academic engagement in an online course includes student activities with opportunities for interaction, such as an interactive tutorial, webinar, or other interactive computer-assisted instruction, including the use of artificial intelligence or other adaptive learning tools that provide feedback from technology-mediated instruction. Academic engagement does not include simply logging into an online platform.
Defines “clock hour in a distance education program” as 50 to 60 minutes in a 60-minute period of attendance in a synchronous class or lecture where there is an opportunity for direct interaction between the instructor and students. A “clock hour” in distance education must meet accrediting and State agency requirements; a “clock hour” does not meet this definition if it exceeds an agency’s restrictions on the number of clock hours that may be offered through distance education.
Modifies the definition of “correspondence course” to refer to plural instructors instead of a singular instructor, and removes the sentence suggesting that correspondence courses are typically self-paced.
Modifies “credit hour” so that the appropriate amount of student work defined by the institution is approved by its accrediting agency or State approval agency. Additionally, the definition now incorporates the standards outlined in ED’s Dear Colleague Letter GEN–11–06 2 for determining the amount of work associated with a credit hour.
Modifies the definition of “distance education” to refer to plural instructors instead of a singular instructor, while deferring to an accrediting agency’s qualifications for instruction when recognizing an “instructor.” The proposed rule also adds a paragraph requiring institutions to ensure “regular interaction” between an instructor and student by providing opportunities for substantive interactions on a predictable, regular basis over the duration of the course, while monitoring the student’s academic engagement and success to ensure that an instructor is responsible for proactively engaging in substantive interaction with the student when needed. “Substantive interaction” is recognized as at least two of the following: (1) providing direct instruction, (2) assessing or providing feedback on a student’s coursework, (3) providing information or responding to questions about the content of a course, (4) facilitating group discussion on the course content, or (5) other activities approved by an accrediting agency.

Section 600.7 Conditions of Institutional Eligibility

Proposes that a student is considered to be “enrolled in correspondence courses” if correspondence courses constitute more than 50 percent of the student’s enrolled courses during an award year.

Section 600.10 Date, Extent, Duration, and Consequences of Eligibility

Requires the Secretary’s approval for an institution’s first direct assessment program at each credential level.

Section 600.20 Notice and Application Procedures for Establishing, Reestablishing, Maintaining, or Expanding Institutional Eligibility and Certification

Requires prompt action by ED on any materially complete applications submitted by participating institutions seeking approval for new programs.
Removes the requirement that an institution obtain approval to offer additional educational programs, unless the Secretary alerts the institution that a program must be approved.

Section 600.21 Updating Application Information

Adds reporting requirements for the addition of a second or subsequent direct assessment program at the same credential level, and for the establishment of a written arrangement for an ineligible institution or organization to provide 25 percent or more of an eligible program pursuant to § 668.5(c).

Section 600.52 Definitions (Related to Foreign Institutions)

Amends the definition of “foreign institution” to allow an eligible foreign institution to enter into a written agreement with an eligible institution within the U.S. to provide up to 25 percent of the courses required for a student’s eligible program. The proposed rule also clarifies that students enrolled in eligible foreign institutions may complete up to 25 percent of an eligible program by enrolling in coursework, research, work, internship, externship, or special studies offered by an eligible institution in the U.S. ED seeks specific comments on whether doctoral students should be permitted to complete coursework in the U.S. and conduct an additional full academic year of independent research in the U.S., which otherwise would cumulatively exceed 25 percent of the program.

Section 600.54 Criteria for Determining Whether a Foreign Institution is Eligible to Apply to Participate in the Direct Loan Program

Permits an eligible foreign institution and ineligible entity to enter into a written arrangement to provide 25 percent or less of the educational program.

Section 668.2 Definitions

Amends the definition of ‘‘full-time student’’ to include students enrolled in subscription-based programs and clarifies requirements for subscription-based programs, as well as prevents an institution from offering repeated courses to a student who has already received a passing grade in their enrollment status.
Defines ‘‘subscription-based program’’ for Title IV disbursement purposes as standard or non-standard term direct assessment program in which an institution charges a student for a term with the expectation that the student completes a specified number of credit hours during that term. No specific timeframe shall apply for the terms, so long as students complete a cumulative number of credit hours before receiving another disbursement of Title IV funds.
Requires institutions to establish a single enrollment status that applies to a student throughout their enrollment in a subscription-based program, with the student able to change their enrollment status once in an academic year.
Explains the method for determining the number of credit hours that must be completed by a student before subsequent disbursements of Title IV funds.

Section 668.3 Academic Year

Revises the definition of ‘‘week of instructional time’’ in reference to an institution’s ‘‘academic year’’ by dividing it into two parts: (1) one unchanged definition relevant to traditional postsecondary programs, and (2) one definition relevant to programs using asynchronous coursework through distance education or correspondence courses, which is defined as a week in which the institution ‘‘makes available the instructional material, other resources, and instructor support necessary for academic engagement and completion of course objectives’’.

Section 668.5 Written Arrangements to Provide Educational Programs

Clarifies that institutions using written arrangements may align or modify their curriculum to meet requirements of industry advisory boards or other industry-recognized credentialing bodies rather than going through a mandatory shared governance decision-making process.
Provides a calculation for determining the percentage of a program that could be provided by an ineligible institution.
Clarifies that written arrangements are not necessary for certain other interactions with outside entities. Specifically, the limitations in § 668.5 do not apply to the transfer of credits, use of prior learning assessment or other non-traditional methods of providing academic credit, or the internship or externship portion of a program.
Removes the 50 percent limitation on written arrangements between two or more eligible institutions under joint ownership.
Ineligible entities must demonstrate experience in the delivery and assessment of the program or portion of the program they will be contracted to deliver, as well as effectiveness of the program in meeting the stated learning objectives.

Section 668.8 Eligible Programs

Reduces the minimum number of clock hours that must be included in a semester or trimester credit hour from 37.5 to 30 clock hours of instruction (25 to 20 hours for quarter credit hours).
Eliminates consideration of work outside of class for purposes of performing clock-to-credit conversions.

Section 668.10 Direct Assessment Programs

Requires an institution to establish a methodology to reasonably equate each module in the direct assessment program to credit or clock hours. The methodology must be consistent with the institution’s accrediting agency or State approval agency requirements.
Recognizes eligible direct assessment programs based on the institution’s accrediting agency’s evaluation (based on its standards and criteria), inclusion in the accreditation or pre-accreditation approval, and review and approval of the direct assessment program’s equivalence in terms of credit or clock hours.
Permits institutions to forgo submission to the Secretary for approval of additional direct assessment programs where the institution has already submitted a direct assessment program at an equivalent or lower academic level. Previously prohibited coursework for direct assessment may be eligible if the Secretary has already approved one or more direct assessment programs at the institution and the institution’s offering is consistent with their accreditation and State authorization, if applicable.

Section 668.13 Certification Procedures

Automatically renews an institution’s certification if the Secretary does not make a decision on an application for recertification, where the application is submitted no later than 90 calendar days before its PPA expires within 12 months.
Clarifies the requirements the Secretary will use to certify a location as a branch campus (i.e. “if it satisfies the definition of ‘branch’ in § 600.2”).

Section 668.14 Program Participation Agreement

Clarifies requirements related to making data available to prospective students about the most recent employment statistics, graduation statistics, or other information to substantiate the truthfulness of its advertising that uses job placement rates to attract students.
Removes the requirements to provide the source of such statistics, associated timeframes, and methodology.
Aligns program length to occupational requirements. Limits program length to 150 percent of minimum program length for the State in which the institution is located or 100 percent of the minimum program hours for licensure in an adjoining State.
Requires updates to teach-out plans after specified negative events (e.g. the Secretary initiates the limitation, suspension, or termination of the institution’s participation in Title IV, HEA programs; the institution’s accrediting agency withdraws, terminates, or suspends the accreditation or pre-accreditation; the institution’s State licensing or authorizing agency revokes the institution’s license; or the institution otherwise intends to cease operations.”
Provide additional flexibility to programs described in 20 U.S.C. 1001(b)(1), in demonstrating a reasonable relationship between the length of the program and licensure requirements associated with the recognized occupation for which the program prepares students.

Section 668.15 Factors of Financial Responsibility

Changes the section title to “Factors of financial responsibility for changes in ownership or control” to mirror the current practice of requiring factors of financial responsibility to be addressed when there is a change in ownership or change in control of an institution.

Section 668.22 Treatment of Title IV Funds When a Student Withdraws

Adds exceptions to the requirements for determining whether a student has withdrawn: (1) early completion of requirements for graduation, (2) completion of modules containing 50 percent or more of the days in the payment period, and (3) completion of coursework equal to or greater than the institution’s requirements for a half-time student for the payment period.
Applies a 45-day time limit on delaying withdrawal for students who cease attendance to standard term programs. For non-term and subscription-based programs, the student can change their date of return if the student’s program permits the student to resume attendance no later than 60 calendar days after they ceased attendance.

Section 668.28 Non-Title IV Revenue (90/10)

Removes references to net present value when including institutional loans in the 90/10 calculation.

Section 668.34 Satisfactory Academic Progress

Changes pace requirements for satisfactory academic progress for subscription-based programs to be measured in demonstrated competencies rather than the passage of time.
Allows the maximum timeframe for undergraduate programs measured in credit hours to be expressed in calendar time in addition to being measured in credit hours.

Section 668.113 Request for review of Satisfactory Academic Progress

For final audit or program review determinations related to classification of a program as distance education or the assignment of credit hours, clarifies that the Secretary will rely on the institution’s accrediting agency or State agency requirements to evaluate the institution’s compliance.

Section 668.164 Disbursing Funds

Excludes subscription-based programs from current provisions on early disbursement and establishes disbursement requirements specific to subscription-based programs to clarify the earliest an institution may disburse funds to students in such a program (e.g. the later of 10 days before the first day of classes or the date that the student completed the cumulative number of credit hours associated with their enrollment status in all prior terms attended).

Section 668.171 General

Allows the Secretary to deny an institution’s application for certification or recertification to participate in Title IV, HEA programs if the institution is not “financially responsible” or does not timely submit its financial and compliance audits as required under § 668.23.

Section 668.174 Past Performance

Provides that an institution is not “financially responsible” if a person who exercises substantial ownership or control over the institution also exercised substantial ownership or control over another institution that closed without a viable teach-out plan or agreement approved by the institution’s accrediting agency and faithfully executed by the institution.

Interested stakeholders may submit comments on the proposed rule on or before May 4, 2020. HMBR is available to provide specific advice on how this regulatory development may affect your campus policies and procedures or to provide other assistance, including drafting public comments or reviewing current policies, procedures and practices. Should you like assistance, please contact HMBR’s Higher Education Group at 312-946-1800.

Apr 3, 2020 | By Linh Nguyen | On Client Alerts