[Federal Register Volume 84, Number 212 (Friday, November 1, 2019)]
[Rules and Regulations]
[Pages 58834-58933]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-23129]
[[Page 58833]]
Vol. 84
Friday,
No. 212
November 1, 2019
Part II
Department of Education
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34 CFR Parts 600, 602, 603, et al.
Student Assistance General Provisions, The Secretary's Recognition of
Accrediting Agencies, The Secretary's Recognition Procedures for State
Agencies; Final Rule
Federal Register / Vol. 84 , No. 212 / Friday, November 1, 2019 /
Rules and Regulations
[[Page 58834]]
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DEPARTMENT OF EDUCATION
34 CFR Parts 600, 602, 603, 654, 668, and 674
RIN 1840-AD36, 1840-AD37
[Docket ID ED-2018-OPE-0076]
Student Assistance General Provisions, The Secretary's
Recognition of Accrediting Agencies, The Secretary's Recognition
Procedures for State Agencies
AGENCY: Office of Postsecondary Education, Department of Education.
ACTION: Final regulations.
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SUMMARY: The Secretary amends the regulations governing the recognition
of accrediting agencies, certain student assistance general provisions,
and institutional eligibility, as well as makes various technical
corrections.
DATES: These regulations are effective July 1, 2020.
Implementation date: For the implementation dates of the included
regulatory provisions, see the Implementation Date of These Regulations
section of this document.
FOR FURTHER INFORMATION CONTACT: For further information related to
recognition of accrediting agencies, Herman Bounds at
[email protected] or (202) 453-7615 or Elizabeth Daggett at
[email protected] or (202) 453-6190. For further information
related to State authorization, Scott Filter at [email protected] or
(202) 453-7249 or Sophia McArdle at [email protected] or (202) 453-
6318. For all other information related to this document, Barbara
Hoblitzell at [email protected] or (202) 453-7583 or Annmarie
Weisman at [email protected] or (202) 453-6712. If you use a
telecommunications device for the deaf (TDD) or a text telephone (TTY),
call the Federal Relay Service (FRS), toll-free, at (800) 877-8339.
SUPPLEMENTARY INFORMATION:
Executive Summary
Purpose of This Regulatory Action: Through this regulatory action,
the Department of Education (Department or we): (1) Strengthens the
regulatory triad by more clearly defining the roles and
responsibilities of accrediting agencies, States, and the Department in
oversight of institutions participating in the Federal Student Aid
programs authorized under title IV of the Higher Education Act of 1965,
as amended (title IV, HEA programs); (2) establishes ``substantial
compliance'' with regard to recognition criteria as the standard for
agency recognition; (3) increases academic and career mobility for
students by eliminating artificial regulatory barriers to work in a
profession; (4) provides greater flexibility for institutions to engage
in innovative educational practices more expeditiously and meet local
and national workforce needs; (5) protects institutional autonomy,
honors individual campus missions, and affords institutions the
opportunity to build campus communities based upon shared values; (6)
modifies ``substantive change'' requirements to provide greater
flexibility to institutions to innovate and respond to the needs of
students and employers, while maintaining strict agency oversight in
instances of more complicated or higher risk changes in institutional
mission, program mix, or level of credential offered; (7) clarifies the
Department's accrediting agency recognition process, including accurate
recognition of the geographic area within which an agency conducts
business; (8) encourages and enables accrediting agencies to support
innovative practices, and provides support to accrediting agencies when
they take adverse actions; and (9) modifies the requirements for State
authorization to clarify the responsibilities of institutions and
States regarding students enrolled in distance education programs and
students enrolled in programs that lead to licensure and certification.
Summary of the Major Provisions of This Regulatory Action
These regulations--
Revise the requirements for accrediting agencies in their
oversight of member institutions and programs to be less prescriptive
and provide greater autonomy and flexibility to facilitate agility and
responsiveness and promote innovation;
Revise the criteria used by the Secretary to recognize
accrediting agencies to focus on education quality and allow
competition;
Revise the Department's process for recognition and review
of accrediting agencies;
Clarify the core oversight responsibilities among each
entity in the regulatory triad--accrediting agencies, States, and the
Department--to hold institutions accountable;
Establish the roles and responsibilities of institutions
and accrediting agencies in the teach-out process;
Establish that the Department recognizes an institution's
legal authorization to operate postsecondary educational programs when
it is exempt from State authorization under the State constitution or
by State law as a religious institution with a religious mission;
Revise the State authorization requirements for
institutions offering distance education or correspondence courses; and
Remove the regulations related to the Robert C. Byrd
Honors Scholarship Program, which has not received funding in many
years.
Authority for this Regulatory Action: Section 410 of the General
Education Provisions Act provides the Secretary with authority to make,
promulgate, issue, rescind, and amend rules and regulations governing
the manner of operations of, and governing the applicable programs
administered by, the Department. 20 U.S.C. 1221e-3. Furthermore, under
section 414 of the Department of Education Organization Act, the
Secretary is authorized to prescribe such rules and regulations as the
Secretary determines necessary or appropriate to administer and manage
the functions of the Secretary or the Department. 20 U.S.C. 3474. These
authorities, together with the provisions in the HEA, permit the
Secretary to disclose information about title IV, HEA programs to
students, prospective students, and their families, the public,
taxpayers, the Government, and institutions. Further, section 431 of
the Department of Education Organization Act provides authority to the
Secretary, in relevant part, to inform the public about federally
supported education programs and collect data and information on
applicable programs for the purpose of obtaining objective measurements
of the effectiveness of such programs in achieving their intended
purposes. 20 U.S.C. 1231a.
Costs and Benefits: As further detailed in the Regulatory Impact
Analysis, the benefits of these regulations include increasing
transparency and improving institutional access for students, honoring
the autonomy and independence of agencies and institutions, restoring
focus and clarity to the Department's agency recognition process,
integrating risk-based review into the recognition process, improving
teach-outs for students at closed or closing institutions, allowing
accrediting agencies to focus greater attention on student learning and
the student experience, and restoring public trust in the rigor of the
accreditation process and the value of postsecondary education. These
regulations reduce regulatory burden on institutions that wish to
develop and implement innovative programs and on accrediting agencies
because of greater flexibility to
[[Page 58835]]
make low-risk decisions at the staff level. In addition, these
regulations significantly reduce the regulatory burden associated with
preparing and submitting accrediting agency petitions for recognition
or renewal of recognition since some of this review will now occur
through a site visit, thereby eliminating the need to upload perhaps
thousands of pages of documents.
The potential costs associated with the regulations include some
burden associated with required disclosures and the need for
accrediting agencies to develop new polices for accreditation decision-
making, enforcement of standards, and substantive change reporting
requirements. While not the anticipated or desired outcome, it is also
possible that agencies would avail themselves of reduced regulatory
burden without redeploying resources towards greater oversight of
program quality, student learning, and the student experience at
institutions and programs; or some agencies could lower their
standards. It is, therefore, incumbent on the Department and National
Advisory Committee on Institutional Quality and Integrity (NACIQI or
Advisory Committee) to use new accountability and oversight tools
provided for in these regulations to properly mitigate these risks and
monitor agencies to ensure they are upholding their mission-based
standards for educational quality.
Implementation Date of These Regulations: Section 482(c) of the HEA
requires that we publish regulations affecting programs under title IV
of the HEA in final form by November 1, prior to the start of the award
year (July 1) to which they apply. However, that section also permits
the Secretary to designate any regulation as one that an entity subject
to the regulations may choose to implement earlier and the conditions
for early implementation.
The Secretary is exercising her authority under section 482(c) of
the HEA to designate the following new regulations at title 34 of the
Code of Federal Regulations included in this document for early
implementation beginning on November 1, 2019, at the discretion of each
institution, or each agency, as appropriate:
(1) Section 600.2.
(2) Section 600.9.
(3) Section 668.43.
(4) Section 668.50.
The final regulations included in this document are effective July
1, 2020.
Public Comments: In response to our invitation in the notice of
proposed rulemaking (NPRM) published in the Federal Register on June
12, 2019 (84 FR 27404), we received 195 comments on the proposed
regulations. We do not discuss comments or recommendations that are
beyond the scope of this regulatory action or that would require
statutory change.
Analysis of Comments and Changes
We developed these regulations through negotiated rulemaking.
Section 492 of the HEA requires that, before publishing any proposed
regulations to implement programs under title IV of the HEA, the
Secretary must obtain public involvement in the development of the
proposed regulations. After obtaining advice and recommendations, the
Secretary must conduct a negotiated rulemaking process to develop the
proposed regulations. The negotiated rulemaking committee reached
consensus on the proposed regulations that we published on June 12,
2019. The Secretary invited comments on the proposed regulations by
July 12, 2019, and 195 parties submitted comments. An analysis of the
comments and of the changes in the regulations since publication of the
NPRM follows.
We group major issues according to subject, with appropriate
sections of the regulations referenced in parentheses. We discuss other
substantive issues under the sections of the regulations to which they
pertain. Generally, we do not address minor, non-substantive changes,
recommended changes that the law does not authorize the Secretary to
make, or comments pertaining to operational processes. We also do not
address comments pertaining to issues that were not within the scope of
the NPRM.
General Comments
Comments: Several commenters supported the Department's proposals
to amend the regulations governing the recognition of accrediting
agencies, certain student assistance general provisions, and
institutional eligibility. Specific support was conveyed regarding
regulations that advance innovation, strengthen student protections
through enhanced disclosures and teach-out requirements, preserve State
reciprocity agreements, and mitigate the unjustified stigma that has
been associated with attending nationally accredited institutions and
the impact that has had on the transferability of credits students
earned at these institutions. One commenter opined that trade schools,
community colleges, apprenticeships, and other programs that are
significantly shorter and less costly than a traditional bachelor's
degree are alternative pathways for students' financial stability and
success. The commenter stated that these programs deserve the same
respect as programs at prestigious institutions, and that the proposed
regulations would make dramatic steps forward for this often-overlooked
form of higher education.
Discussion: We appreciate the commenters' support.
Changes: None.
Comments: Many commenters expressed general opposition to the
proposed regulations, suggesting that the Department was weakening both
its oversight of accrediting agencies and the accrediting agencies'
oversight of institutions, reducing transparency, and putting students
and taxpayers at risk. Others stated that we should withdraw the
proposed regulations. The commenters were concerned that the proposed
changes would erode the value of accreditation, make it difficult for
prospective students to assess the quality of an institution of higher
education, render postsecondary credentials and degrees meaningless,
and negatively impact the competitiveness of the United States in the
global economy.
Discussion: In response to the commenters requesting that the
proposed regulations be strengthened, completely revised, or withdrawn,
we believe these final regulations strike the right balance between our
goals of encouraging innovation and ensuring accountability,
transparency, clarity, and ease of administration, while providing
sufficient oversight of accrediting agencies and institutions and, at
the same time, protecting students, the Federal government, and
taxpayers. These regulations enable accrediting agencies and
institutions to be nimbler and more responsive to changing economic
conditions and workforce demands, and they permit agencies to convey
their intention to take negative action earlier by providing a period
of time during which an institution may remain accredited and still
participate in title IV programs in order to graduate students near the
end of their programs or help students transfer to new institutions.
The changes to the criteria used by the Secretary to recognize
accrediting agencies by placing increased focus on education quality
strengthen the value and effectiveness of accreditation. Additional
tools available to accrediting agencies to hold institutions and
programs accountable will also increase the value of accreditation. We
believe that the regulations are in the best interest of students,
consumers, and taxpayers, and will improve the quality of the education
offered at institutions by ensuring that all institutions and
[[Page 58836]]
programs meet a threshold of quality. Finally, we have taken heed of
the Academy of Arts and Sciences recommendation in The Future of
Undergraduate Education, that ``while the most vigorous critique of
regulation has focused on federal rules, state agencies and accrediting
bodies should also engage in a thoughtful review to identify
regulations and other policy barriers that may impede the spread of
innovation across colleges and universities. We should review and roll
back, where possible, regulations that do not contribute to protecting
students by insisting that providers meet rigorous quality standards.
Conversely, we should direct greater regulatory attention and
compliance at institutions that are chronically poor performers. A
better relationship between important regulatory protections and the
promotion of innovation can be achieved through thoughtful action at
the State, Federal, accreditation, and institutional level.'' \1\ This
sentiment is endorsed by the Task Force on Federal Regulation of Higher
Education, a group of college and university presidents and
chancellors, created by a bipartisan group of U.S. Senators, who
recently released an analysis recommending that regulation not related
directly to institutional quality and improvement be identified and,
where possible, eliminated.\2\
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\1\ amacad.org/sites/default/files/academy/multimedia/pdfs/publications/researchpapersmonographs/CFUE_Final-Report/Future-of-Undergraduate-Education.pdf.
\2\ acenet.edu/news-room/Documents/Higher-Education-Regulations-Task-Force-Report.pdf.
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Changes: None.
Comments: Several commenters stated that the negotiated rulemaking
process, by which we developed the proposed regulations, was flawed.
Many commenters opined that condensing an expansive agenda with over a
dozen topics into a single negotiated rulemaking provided inadequate
time for the full negotiated rulemaking committee to meaningfully
discuss the complete scope of regulatory changes. Some commenters
objected to the Department's decision to use subcommittees, with some
objecting specifically to the use of a subcommittee to develop
definitions that informed the proposed changes to the accreditation
regulations. Others objected to the simultaneous scheduling of
subcommittee meetings, asserting that this made it impossible for
negotiators to physically attend all meetings, and opined that the
subcommittee meetings were not open to the public, as required by the
HEA. Another commenter wrote in support of the Department's use of
subcommittees, noting that they served to provide a foundation on the
issues for which the negotiating committee was able to thoughtfully
consider and develop the language found in the proposed regulations.
Discussion: We disagree with the commenters who said that the
Department's rulemaking process was flawed. It is not uncommon for the
Department to address multiple topics with a single negotiated
rulemaking committee,\3\ nor was this the first time that the
Department utilized non-voting subcommittees to delve more deeply into
a specific topic and provide recommendations to the main committee. The
recommendations of the subcommittees were not binding on the members of
the main committee who were free to discuss the issues in as much
detail as they required to come to agreement. For example, the members
of the main committee discussed in detail and made edits to the
recommended definitions of terms provided to them by the subcommittee
before reaching consensus.
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\3\ www.federalregister.gov/documents/2013/11/20/2013-27850/negotiated-rulemaking-committee-negotiator-nominations-and-schedule-of-committee-meetings-title-iv and www.federalregister.gov/documents/2014/12/19/2014-29734/negotiated-rulemaking-committee-negotiator-nominations-and-schedule-of-committee-meetings-william-d.
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Although the subcommittee meetings were scheduled simultaneously,
the negotiators and the public were provided both live-streamed and
recorded access to the subcommittees' deliberations, fulfilling the
legal requirements of HEA section 492. Finally, we believe that there
was enough time for the full negotiated rulemaking committee to
meaningfully discuss the complete scope of regulatory changes.
Specifically, the committee voted to extend the meeting times of each
of the four days in the third session by two hours. The committee also
voted to extend negotiations to include a fourth session of four
additional days, which also included extended hours.
Changes: None.
Comments: Some commenters expressed concern that States lacked
adequate representation on the negotiating committee, noting that a
representative from the State Higher Education Executive Officers
(SHEEO) was added following self-nomination, and that the Department
cast the sole dissenting vote on the self-nomination of a
representative of State attorneys general (AGs), suggesting that a
critical consumer protection and State enforcement voice was omitted
from the discussion. A group of commenters echoed this complaint,
adding that the omission of State AGs prevented a critical voice for
protecting students from being heard. Other commenters asserted that
the interests of students, student veterans, and consumers were not
adequately represented. Another commenter stated that no single member
of the committee had expertise on all topics under consideration,
asserting that section 492 of the HEA, 20 U.S.C. 1098a(b)(1), requires
negotiators to have expertise in all subjects under negotiation.
Discussion: The negotiated rulemaking process ensures that we
consider a broad range of interests in the development of regulations.
Specifically, negotiated rulemaking is designed to enhance the
rulemaking process through the involvement of all parties significantly
affected by the topics for which we will develop the regulations.
Accordingly, section 492(b)(1) of the HEA, 20 U.S.C. 1098a(b)(1),
requires that the Department choose negotiators from groups
representing many different constituencies. The Department selects
individuals with demonstrated expertise or experience in the relevant
subjects under negotiation, reflecting the diversity of higher
education interests and stakeholder groups, large and small, national,
State, and local. In addition, the Department selects negotiators with
the goal of providing adequate representation for the affected parties
while keeping the size of the committee manageable.
Students, student veterans, and consumers were all ably represented
by non-Federal negotiators on the negotiating committee with primary
and alternate representatives for each of these constituencies, as well
as in the subcommittees.
The Department's decision to not include a representative of State
AGs on the main committee was predicated on the fact that the topics
for negotiation did not include issues that are specifically related to
their work. In addition, several negotiators commented that adding a
State AG to the full committee would have created conflicts and perhaps
even silenced discussion, since some negotiators were the subject of
one or more State AG inquiries or investigations. In fact, there were
multiple members of the committee who rejected the idea of adding a
State AG to the committee during the first two attempts to vote on the
self-nomination of a State AG. In some prior rulemakings, the
Department has determined that State AGs were an affected constituency.
In those cases, the Department has included them as
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negotiators. However, the Department did not believe that State AGs
were a particularly relevant constituency group for this rulemaking
effort and determined that SHEEOs were the more appropriate
representative of State interests, especially with regard to the topics
negotiated. However, at the request of an AG who nominated himself and
an additional AG, the committee voted to add a representative of State
AGs to the Distance Education and Innovation subcommittee and provided
the opportunity for that representative to contribute to the
deliberations that informed the main committee's work.
It would be highly unusual for any individual negotiator to have
expertise on all the topics under consideration in any negotiated
rulemaking. The Department relies upon the collective expertise of the
non-Federal negotiators to inform the discussions and deliberations,
recognizing that some members of the committee will be more
knowledgeable about certain topics or elements of topics than others
based on their area of expertise and the constituency they represent.
The HEA does not require the Department to select specific entities or
individuals to be on the committee, nor does it require non-Federal
negotiators be an expert in all areas under discussion, but rather,
that they are ``individuals with demonstrated expertise or experience
in the relevant subjects under negotiation, reflecting the diversity in
the industry, representing both large and small participants, as well
as individuals serving local areas and national markets.'' \4\ Non-
Federal negotiators representing students, student veterans, and
consumers, for example, provide important perspectives on this and
other negotiated rulemaking committees, but are unlikely to have the
same kind of expertise as financial aid administrators. The Department
agrees that it overlooked an important member of the triad by
inadvertently neglecting to include a representative of the SHEEOs as
one of the categories of negotiators required for this rulemaking. The
Department appreciates the nomination of a representative of this
constituency and the support of the other negotiators to include him as
a non-Federal negotiator.
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\4\ HEA section 492, 20 U.S.C. 1098a(b)(1).
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Changes: None.
Comments: A group of commenters stated that the negotiated
rulemaking process failed to provide students and consumers with enough
opportunity to be heard.
Discussion: We believe that the negotiated rulemaking process
provided students and consumers with sufficient opportunity to be
heard. The negotiated rulemaking committee included primary and
alternate negotiators representing students, student veterans, and
consumer advocates. Moreover, the Department conducted three public
hearings before the negotiated rulemaking began and provided time for
public comment on each of the 12 days the main committee met.
Changes: None.
Comments: Several commenters asserted that the Department failed to
provide evidence to support the need for the proposed regulatory
changes during the negotiated rulemaking. Several commenters objected
to the proposed changes that affect religious institutions of higher
education, asserting that the Department had failed to adequately
substantiate the need for such changes. Another commenter stated that
the Department failed to present enough evidence that accreditation is
a barrier to innovation. One commenter petitioned for correction and
disclosure under the Information Quality Act (IQA), arguing that the
Department failed to disclose underlying sources or methodologies to
support our policy proposals.
Discussion: We disagree with the commenters who stated that the
Department failed to provide data or evidence to support the need for
the proposed regulatory changes during the negotiated rulemaking. We
acknowledge that the Department was unable to fulfill several of the
specific data requests made by negotiators because they sought
information that is not available. The changes to the regulations are
based on many factors, including feedback we received from the public,
studies conducted by higher education associations, and emerging trends
in postsecondary education. Specifically, the Department developed a
list of proposed regulatory provisions based on advice and
recommendations submitted by individuals and organizations as testimony
in a series of three public hearings in September of 2018, as well as
written comments submitted directly to the Department. Department staff
also identified topics for discussion and negotiation. We developed the
proposed regulations that we negotiated during negotiated rulemaking
with specific objectives for improvement, including updating the
requirements for accrediting agencies in their oversight of member
institutions or programs; establishing requirements for accrediting
agencies to honor institutional mission; revising the criteria used by
the Secretary to recognize accrediting agencies, emphasizing criteria
that focus on educational quality; encouraging accrediting agencies and
States that collect job placement data to do so using publicly
available administrative datasets to increase their reliability and
comparability; simplifying the Department's process for recognition and
review of accrediting agencies; and promoting greater access for
students to high-quality, innovative programs.
Changes: None.
Comments: An association and other commenters asserted that the
decision to publish three separate NPRMs, rather than a single NPRM
encompassing the entirety of the consensus language, made it impossible
to submit informed comments on the partial provisions included because
the public is unaware of other changes the Department intends to
propose to related provisions on the agenda from this rulemaking.
Another commenter asserted that there is no guarantee that the
Department will propose the remaining regulations from the
negotiation's consensus, suggesting that this would prevent the
proposed regulations from functioning coherently.
Discussion: It is possible for members of the public to submit
informed comments on the provisions that we included in the NPRM. We
discussed and negotiated the topics in the proposed regulations
included in the NPRM in their entirety during negotiated rulemaking. As
the rulemaking sessions considered numerous topics, we separated the
subject matter into groups. We included one set of topics in the first
NPRM and plan to publish two additional NPRMs including the remaining
topics within the next few months. Moreover, because the negotiated
rulemaking committee reached consensus, the totality of the proposed
regulatory changes was available to the public at the conclusion of the
negotiations.
We appreciate commenters' concerns about how these regulations
would function without the other regulatory pieces moving forward.
However, since we achieved consensus on all topics included in
negotiated rulemaking, we anticipate that the other regulations that
were part of this rulemaking effort will similarly become final
regulations soon.
The preparation of the NPRM included a review of other regulations
in the consensus language that were dependent on the accreditation
regulations, and those sections of the amended regulations were
included in this regulatory package. These included any regulatory
changes to definitions and regulations pertaining to State
[[Page 58838]]
authorization of institutions and programs.
Changes: None.
Comments: One commenter noted that the final vote occurred with
little time left to negotiate, rushing a consensus vote.
Discussion: The final vote in negotiated rulemaking frequently
occurs at the end of the last day of negotiations. Negotiators who are
not satisfied with the proposed regulations when the final vote occurs
may vote against consensus or withhold their support.
Changes: None.
Comments: Some commenters alleged that negotiators who opposed the
Department's proposed regulations were coerced into reaching consensus
by other negotiators who suggested that, absent consensus, the
Department would propose regulations that were less reflective of the
negotiators' interests.
Discussion: The Department acknowledges that negotiated rulemaking
can be a stressful endeavor, as each member of the committee works hard
to represent the best interests of their constituency, and, by virtue
of its design, consensus requires a give-and-take from all parties.
However, primary committee members have independent authority to vote
and should do so in keeping with their assessment of the proposed
regulatory changes. Although it is true that, absent consensus, the
Department may propose regulations that differ from the language
developed by the negotiating committee, those proposed regulations
would still be subject to public comment and could change based on that
input.
Changes: None.
Comments: Some commenters opined that the public comment period was
too short and did not permit a meaningful opportunity to comment,
noting that when a proposed regulation--such as this one--is classified
as ``economically significant'' and ``major'' by the Office of
Information and Regulatory Affairs, section 6(a) of Executive Order
12866 requires the Department to ``afford the meaningful opportunity to
comment on any proposed regulation, which in most cases should include
a comment period of not less than 60 days.'' These commenters noted
that the comment period included a Federal holiday and eight weekend
days.
Discussion: We believe that the 30-day public comment period was an
adequate time period for interested parties to submit comments. Because
we reached consensus during negotiated rulemaking, the proposed
regulatory language was available to the public at the conclusion of
the final negotiating session, which afforded interested parties
additional time to begin formulating their comments.
Prior to issuing the proposed regulations, the Department conducted
two public hearings and four negotiated rulemaking sessions, where
stakeholders and members of the public had an opportunity to weigh in
on the development of much of the language reflected in the proposed
regulations. In addition, we believe that the 30-day public comment
period was necessary to allow us to meet the HEA's master calendar
requirements. Under those requirements, the Department must publish
final regulations by November 1, 2019, for them to be effective on July
1, 2020. The recognition process for accrediting agencies is lengthy
and the changes to these regulations will require significant planning
and coordination on the part of agencies and Department staff. Delaying
the effective date of these regulations would unnecessarily delay the
realization of the benefits associated with these changes.
Changes: None.
Institutional Eligibility
Definitions (Sec. 600.2)
Comments: Several commenters expressed support for the Department's
proposed addition of a definition of ``additional location'' and its
proposed revision of the term ``branch campus,'' indicating that the
clarifications provided in those definitions resolved confusion
regarding the two terms.
Several other commenters expressed support for the student
protections included in the proposed definitions of ``teach-out'' and
``teach-out agreement,'' including prohibitions on misrepresentation of
the nature of teach-out plans, teach-out agreements, and transfer of
credit. The commenters also supported the proposed stipulation in the
definition of ``teach-out'' that we should always permit a student to
access a closed school discharge if the student chooses not to pursue
the teach-out option.
Discussion: The Department thanks the commenters for their support.
After further review, the Department is making minor clarifications to
the definition of ``teach-out'' in Sec. 600.2. First, we are
clarifying that a teach-out is a process rather than a time period.
Because teach-outs can continue for years to allow every enrolled
student the opportunity to complete his or her program, it is important
to clarify that it is the set of activities that define a teach-out,
not necessarily the period of time.
We are also removing from the definition language that asserts that
a student who chooses at the time of the teach-out announcement to
leave the school and pursue a closed school loan discharge is able to
do so, as this is not a definitional issue. Students who withdraw from
a closing school may still be eligible for a closed school loan
discharge when the formal teach-out is not completed until well after
the 180 days generally associated with closed school loan forgiveness.
Section 685.214(c) affirms that a borrower may be eligible for a closed
school loan discharge when the borrower's school closes and the
borrower does not complete the program of study or a comparable program
through a teach-out at another school or by transferring academic
credits or hours earned at the closed school to another school.
While not a change, we are emphasizing in Sec. 668.26(e)(2) that
an institution is prohibited from misrepresenting the nature of its
teach-out plans, teach-out agreements, and transfer of credit, and that
any such misrepresentation may provide the basis for a borrower's claim
of defense to repayment.
Changes: We have modified the wording of the definition of ``teach-
out'' in Sec. 600.2 to clarify that it is an activity, rather than a
period of time. The teach-out activity may be conducted by the closing
institution in order to provide an opportunity to enrolled students to
complete their programs or may be conducted by other institutions who
permit students from the closing or closed institution to complete
their programs at their institution.
Comments: Several commenters requested additional clarification
regarding the definition of ``additional location,'' indicating that
confusion remained regarding how to apply the definition to an urban
campus where buildings are located close together, but not directly
adjacent to one another. One commenter noted as an example that some
buildings on an urban campus might be on the same city block, others
might be nearby, while still others could be a 30-minute drive or more.
The commenter offered another example of a location that was in a
different State than the main campus yet separated from the main campus
by only a few miles. The commenter stated that it was unclear whether
the Department would consider any of those locations a ``facility that
is geographically apart'' from the main campus.
Another commenter noted that the regulations did not require State
authorizing agencies to adopt similar definitions of the terms ``branch
[[Page 58839]]
campus'' and ``additional location'' and noted that any such
requirements could have significant impacts on States' authorizing and
approval processes.
Discussion: The Department relies upon the reasonable judgment of
the institution and its accrediting agency to determine whether a
facility is ``geographically apart'' from the institution's main
campus. The Department agrees that its regulations do not require State
authorizing agencies to define ``branch campus'' or ``additional
location'' the same way the defines Department defines those terms. The
Department does not have the authority to impose its definitions for
these terms on States but encourages States to adopt conforming
definitions to reduce confusion.
Changes: None.
Comments: One commenter requested that the Department explain the
connection between an institution's main campus and a ``branch
campus.'' The commenter noted that the definition contains many
requirements that are characteristic of an independent institution,
including an independent fundraising and corporate structure, and
stated that it was therefore unclear what relationship such a campus
should have with its parent institution.
Discussion: A ``branch campus'' is a type of additional location
that meets specific criteria, including retaining permanence and
autonomy with respect to faculty, administration, and budgetary and
hiring authority. The Department does not require any specific type of
connection between a main campus and a branch campus except that both
campuses must be accredited as a single entity and both must share the
fiduciary responsibility for administration of the title IV, HEA
programs. We consider a campus that is separately accredited to be a
standalone institution for purposes of eligibility for the title IV,
HEA programs. Coordination between a main campus and a branch campus
remains at the institution's discretion and is subject to any
applicable standards set by its accrediting agency or State authorizing
agency.
Changes: None.
Comments: One commenter objected to the proposed definitions of
``additional location'' and ``branch campus'' on the grounds that the
Department has failed to provide any examples of ``occasional
inconsistent usage,'' or any data about the problems caused by such
usage that would warrant making these revisions to current regulations.
Discussion: As explained in the preamble to the NPRM (page 27411),
the Department's reason for adding a definition of ``additional
location'' and revising the definition of ``branch campus'' was to
avoid confusion caused by inconsistent usage among the Department,
States, and various accrediting agencies. Clear definitions of
``additional location'' and ``branch campus'' will promote consistency,
improve the efficiency of Department, State, and accrediting agency
review of applications to add additional locations or branch campuses,
and ensure fair and equitable treatment of those applications.
Regarding the commenter's assertion that the Department should
provide examples of where inconsistencies in the review of additional
locations or branch campuses occurred, as well as other unspecified
data, the Department does not characterize specific eligibility
decisions related to additional locations and branch campuses as
``inconsistencies'' for inclusion on a database (or other list) that we
could query for this purpose. However, we are aware of accrediting
agencies that use the term ``branch campus'' for campuses that the
Department considers to be additional locations, though we are not sure
how many campuses this impacts. Notwithstanding the absence of such
data, we do not believe a report such as the one requested by the
commenter is necessary to justify these proposed revisions, which will
codify long-established Department practices. We further seek to
promote consistency in terminology, as accrediting agency use of these
terms varies.
Changes: None.
Comments: One commenter recommended we revise the proposed
definition of ``teach-out'' to limit access to a closed school
discharge, as provided in Sec. 685.214, to eligible borrowers who are
not afforded the opportunity or are unable to avail themselves of
teach-out options to complete their programs. The commenter argued that
it is important for the Department to clarify that the best policy
course when closing an institution is for the institution's leadership
to take all appropriate steps to provide a student with a soft landing
and clear path to completion. In the commenter's opinion, permitting
borrowers who attended an institution that offered a proper teach-out
to seek a closed school discharge disincentivizes institutions from
offering teach-outs.
Discussion: We agree with the commenter that it is in the best
interest of students for a closing institution to provide a well-
designed teach-out structured to offer a clear path to program
completion. However, while those borrowers who accept a teach-out are
not then eligible for a closed school discharge under the provisions of
Sec. 685.214, the mere availability of a teach-out, however robust, is
not a disqualifying factor for such a discharge. Although the
Department is firmly committed to the concept of teach-outs as the best
option for students affected by an impending school closure to complete
their programs of study, we believe it is appropriate that the choice
to accept a teach-out in lieu of a closed school discharge rest with
each student and that our regulations make clear the availability of
that choice. However, we also agree that when an institution commits
the time and expense required to conduct an orderly teach-out, a
student who chooses to participate in that teach-out is not also
eligible for a closed school loan discharge unless the institution
fails to provide a teach-out that is materially consistent with what is
described in the teach-out plan.
Changes: None.
Comments: One commenter asserted that the Department has failed to
explain the reasoning associated with proposed revisions to the
definition of ``teach-out plan'' and ``teach-out agreement.''
Citing as an example in the current Sec. 668.14(b)(31), requiring
an institution to submit a ``teach-out plan'' to an accrediting agency
in compliance with Sec. 602.24(c) upon the occurrence of certain
events, the commenter further contended that the Department has failed
to explain how the modified definition of ``teach-out plan'' will
impact other regulations that presently use that term. Finally, the
commenter questioned whether the Department has considered the
ramifications of amending the definition of ``teach-out plan,''
including whether it will have a positive, negative, or neutral impact
on students and suggests that, taken together, this has deprived the
public of a meaningful opportunity to comment on the Department's
proposals.
Discussion: We disagree that the Department has failed to explain
its proposal to revise the definitions of ``teach-out plan'' and
``teach-out agreements.'' In the preamble to the June 12, 2019 NPRM
(page 27411) the Department explained its proposal to revise the
definition of ``teach-out plan'' to clearly distinguish a teach-out
plan from a teach-out agreement and to clarify that teach-outs can be
conducted by the closing institution as well as another continuing
institution. A teach-out agreement is a written contract between two or
more institutions; a teach-out plan is developed by an
[[Page 58840]]
institution and may or may not include agreements with other
institutions. The Department also believes that the definition of
``teach-out plan'' should include plans for teaching-out students
during orderly closures in which an institution plans to cease
operating but has not yet closed.
We are uncertain of the commenter's point in suggesting that the
Department has failed to explain how the modified definition of
``teach-out plan'' will impact other regulations that presently use
that term. In the example cited by the commenter, per Sec.
668.14(b)(31), where an institution must submit a ``teach-out plan'' to
an accrediting agency in compliance with Sec. 602.24(c) upon the
occurrence of certain events, the teach-out plan submitted by the
institution must, upon the effective date of these final regulations,
meet the revised definition of ``teach-out plan.'' The same logic
applies throughout the regulations wherever we reference the term
``teach-out plan.'' With regard to whether the Department considered
the ramifications of amending the definition of ``teach-out plan,'' we
carefully considered the potential ramifications, including the impact
on students, and this was in the forefront both in the development
stage of the proposed regulations and during negotiated rulemaking. We
believe that students are best served when their institution engages in
an orderly closure that permits students who are close to completing
their programs an opportunity to do so. Students who are close to
completing their programs may find it particularly challenging to
transfer all of their credits to another institution because receiving
institutions may require that a student completes a minimum number of
credits at the institution awarding the credential. We also believe an
orderly teach-out provides more opportunities for students to complete
the term in which the teach-out announcement is made and receive
assistance from the institution, the State, or the Department to find a
new institution to attend.
Finally, we disagree with the commenter's conclusion that we failed
to justify proposed revisions to the definitions in Sec. 600.2 and,
accordingly, deprived the public of a meaningful opportunity to comment
on the Department's proposals. We have provided our rationale in the
NPRM for all changes the Department proposed to part 600 of the current
regulations.
Changes: None.
Comments: One commenter stated that the Department has failed to
explain why it proposes to move the definitions of ``teach-out
agreement'' and ``preaccreditation'' from the accreditation regulations
in part 602 to Sec. 600.2 rather than inserting a cross-reference to
those definitions in parts 600 and 668. The commenter further noted
that the Department failed to propose changes to the current cross-
references to those definitions in part 602.
Discussion: The Department explained its proposal to move the
definitions of ``teach-out agreement'' and ``preaccreditation'' to
Sec. 600.2 in the June 12, 2019 NPRM (page 27411) where we stated,
``The Department proposes to move the definitions of ``teach-out
agreement'' and ``preaccreditation'' from the accreditation regulations
in Sec. 602.3 to the institutional eligibility regulations in Sec.
600.2 for consistency, and because the use of those terms extends to
regulations in Sec. Sec. 600 and 668.''
With respect to the commenter's assertion that the Department
failed to propose changes to the current cross-references in part 602,
we note that the amendatory text in Sec. 602.3 states, ``The following
definitions are contained in the regulations for Institutional
Eligibility under the Higher Education Act of 1965, as amended, 34 CFR
part 600.'' ``Teach-out agreement'' and ``preaccreditation'' are
included among the definitions listed in this section.
Changes: None.
Comments: Several commenters stated that the definition of
``religious mission'' is overly broad and would prohibit accrediting
agencies from enforcing any provisions, including well-established
standards and nondiscrimination protections, against religious
institutions. Commenters indicated that the definition, in combination
with other provisions in the regulations, would allow an institution to
overcome barriers to accreditation by including a reference to religion
in its mission statement. One commenter indicated that religious
missions are no more important than secular missions and that we should
not elevated them to a higher status under the law. Another commenter
indicated that this definition will undermine the separation of
religion and government. Several commenters speculated that these
regulations will encourage secular institutions to adopt religious
missions and for religious institutions to expand the religious
components of their missions to avoid scrutiny by accrediting agencies.
Commenters also indicated that institutions will be allowed to adopt
discriminatory practices and policies, especially towards LGBTQ
students and women, which are justified by the institution's religious
mission, even if their accrediting agencies have standards barring such
practices. Commenters noted that the Department failed to provide
evidence of an institution denied accreditation because of its
adherence to its religious mission, and that there is therefore no
legitimate reason to include the proposed definition.
Discussion: In light of the United States Supreme Court decision in
Trinity Lutheran Church of Columbia, Inc. v. Comer, and the United
States Attorney General's October 7, 2017 Memorandum on Federal Law
Protections for Religious Liberty pursuant to Executive Order 13798,
the Department believes that it should provide protection for faith-
based institutions in situations in which their ability to participate
in Federal student aid programs may be curtailed due to their religious
mission or policies, practices, and curricular decisions that enact or
are consistent with the tenets of the faith. Allowing accrediting
agencies to make negative decisions because of the institution's
exercise of religion could violate the Free Exercise Clause of the
United States Constitution. In addition, under the Religious Freedom
Restoration Act of 1993 (RFRA) the government may only substantially
burden a person's exercise of religion if the application of that
burden to the person is the least restrictive means of furthering a
compelling governmental interest. If access to Federal student aid
depends upon accreditation decisions that do not respect the religious
mission of an institution, the religious institution's exercise of
religion could be substantially burdened, and removing Federal aid may
not be the least restrictive means of furthering a compelling
governmental interest. Thus, both the Constitution and RFRA protect
religious activities in ways that they do not protect other
institutional missions. Based on recent Supreme Court decisions, the
Department believes that protections such as the ones in these
regulations are advisable given the Free Exercise Clause and RFRA and
that the Establishment Clause of the Constitution does not prohibit
them. Institutions will continue to be subject to anti-discrimination
laws, unless they are otherwise exempt. While we do not believe that
institutions will change their missions to evade oversight by
accrediting agencies, we believe that it would raise constitutional
concerns if the Federal government were to decide whether a religious
mission is legitimate or whether the reason that an institution
[[Page 58841]]
decides to exercise its religious rights is appropriate.
Changes: None.
State Authorization Reciprocity Agreement (Sec. 600.2)
Comments: Commenters generally supported the Department's proposal
to maintain the definition of a ``State authorization reciprocity
agreement'' as promulgated in the Program Integrity and Improvement
regulations published in the Federal Register on December 19, 2016 (81
FR 92232). However, commenters had differing views regarding the part
of the definition that requires reciprocity agreements to permit a
member State to enforce its own statutes and regulations, whether
general or specifically directed at all or a subgroup of educational
institutions. Some commenters felt that this language supports the
States' consumer protection role in the triad and enables States to
provide the same protections to online students in their States as they
provide to students attending brick-and-mortar institutions. Commenters
noted that allowing for reciprocity agreements that do not protect the
State's authority would undermine the regulatory triad and create a
race to the bottom in consumer protections and that the Department
should stress that online institutions are subject to a State's
consumer protection laws. Other commenters were concerned that the
language undermines reciprocity agreements by allowing a State to
enforce additional requirements regardless of an agreed-upon set of
requirements established in a reciprocity agreement and that we should
not allow States to override a reciprocity agreement's regulations.
Some of these commenters recommended that the regulations provide that
a State authorization reciprocity agreement may require a State to meet
requirements and terms of that agreement so that the State could
participate in that agreement. A couple of commenters stated that if
the concern about a State authorization reciprocity agreement is that
it could be interpreted to supplant all of a State's laws, then the
most direct way to prevent this from happening would be to revise the
definition of ``State authorization reciprocity agreement'' to provide
that the agreement cannot prohibit any member State of the agreement
from enforcing its own general-purpose State laws and regulations
outside of the State authorization of distance education. Commenters
suggested that their proposed definition of ``State authorization
reciprocity agreement'' referencing ``general-purpose State laws and
regulations'' should replace the language in the current definition
that maintains a member State's authority to enforce its own statutes
and regulations, whether general or specifically directed at all or a
subgroup of educational institutions, while still maintaining a State's
authority to enforce its other, non-State authorization related,
statutes and regulations. The commenters stated that failure to
streamline the definition in this way would continue to cause confusion
about the definition, and since the Department has recognized State
authorization reciprocity agreements as a method by which State
authorization distance education requirements can be met, adjusting the
definition in their proposed way is a needed clarification. In
addition, the commenters said that, with respect to the concern that
the scope of a State reciprocity agreement could be interpreted to
extend beyond the scope of State authorization of distance education
and impact a State's exercise of its other general oversight
activities, by clarifying that States could continue to enforce their
general purpose laws--those that do not relate to the State
authorization of distance education programs--in addition to the
reciprocity agreement, those concerns should be alleviated.
One commenter stated that there needs to be an appropriate due
process in place when a State authorization reciprocity organization
acts against an institution and this should be a factor that the
Department considers regarding the acceptance of reciprocity
agreements.
Discussion: The Department appreciates the comments in support of
the proposal to maintain the definition of ``State authorization
reciprocity agreement.'' However, we are persuaded by the commenters
who suggested that we modify the definition to clarify that such an
agreement cannot prohibit any member State of the agreement from
enforcing its own general-purpose State laws and regulations outside of
the State authorization of distance education. A reciprocity agreement
may supersede a State's own requirements related to State authorization
of distance education and may prohibit a State voluntarily
participating in that agreement from adding additional requirements on
institutions that also participate in the agreement. It would not be
acceptable, for example, for a State to participate in a reciprocity
agreement in order to advantage its own public institutions and yet
apply additional or alternate requirements related to State
authorization of distance education to institutions that participate in
the reciprocity agreement but may be located in a different State.
Adopting this suggestion will alleviate confusion about the definition,
clarify that the scope of a State authorization reciprocity agreement
cannot be interpreted to extend beyond the scope of State authorization
of distance education or to impact a State's exercise of its other
general oversight activities, and permit a member State of the
agreement to enforce its own general-purpose State laws and regulations
outside of the State authorization of distance education, while
replacing the confusing and potentially conflicting language in the
current definition that maintains a member State's authority to enforce
its own statutes and regulations, whether general or specifically
directed at all or a subgroup of educational institutions.
We decline the recommendation regarding due process when a State
authorization reciprocity organization acts against an institution, as
we believe that this is a function of the reciprocity agreement, and
thus, the members of the reciprocity agreement should address it.
In addition, we note that the definition of ``State authorization
reciprocity agreement'' was unintentionally omitted from the NPRM. At
the time, this definition had not been added to the U.S. Code of
Federal Regulations due to the delayed implementation of the
Department's 2016 State Authorization regulations. However, the 2016
definition of a State reciprocity agreement was published in the
Federal Register on July 29, 2019 (84 FR 36471) and was discussed
during the negotiated rulemaking that led to this final regulation. The
comments we received on this definition indicate that the public was
aware of the proposed definition based on the consensus language made
available to the public on the Department's website.
In the proposed regulations, as part of the amendments to the State
authorization regulations under Sec. 600.9(c), we removed the concept
of a student's ``residence'' and replaced it with ``location'' (see
discussion under State authorization in the preamble to the NPRM and
under Sec. 600.9(c) below). To ensure consistency between these
amendments to Sec. 600.9(c) and the definition of ``State
authorization reciprocity agreement,'' which also refers to students
``residing'' in other States, we are making a conforming change to the
``State authorization reciprocity agreement'' definition and replacing
the word ``residing'' with ``located.''
Changes: We revised the definition of ``State authorization
reciprocity
[[Page 58842]]
agreement'' in Sec. 600.2 to define a State authorization reciprocity
agreement to be an agreement between two or more States that authorizes
an institution located and legally authorized in a State covered by the
agreement to provide postsecondary education through distance education
or correspondence courses to students located in other States covered
by the agreement. We further revised this definition to provide that it
does not prohibit any member State of the agreement from enforcing its
own general-purpose State laws and regulations outside of the State
authorization of distance education. Finally, we have replaced the word
``residing'' with the word ``located.''
Institution of Higher Education, Proprietary Institution of Higher
Education, and Postsecondary Vocational Institution (Sec. Sec. 600.4,
600.5, and 600.6)
Comments: One commenter supported the Department's proposed
clarification of initial arbitration requirements but stipulated that,
in the interest of transparency, arbitration proceedings should be
public.
Discussion: We appreciate the support of the commenter. However, we
do not agree that the Department should require that arbitration take
place in public and such a requirement is not contained in HEA section
496(e), 20 U.S.C. 1099b(e), the statutory section to which this
regulatory provision is closely tied. As we explained in the NPRM,
although arbitration hearings are less transparent than court
proceedings, the Department believes that existing and proposed
requirements for notice to students and the public in Sec. Sec. 602.26
and 668.43 will ensure both are timely made aware of accreditation
disputes and their resolutions.
Changes: None.
Comments: Two commenters expressed opposition to proposed changes
regarding initial arbitration. One of those commenters asserted that by
relying on arbitration, the Department potentially ``extends the
clock'' for a problem institution, because that arbitration may be
followed by a likely costly lawsuit, and suggested that the Department
has failed to show evidence either that institutions have routinely not
followed the statutory requirement of initial arbitration prior to
initiating any other legal action, or that initial arbitration, when
used, has resulted in fewer lawsuits. The commenter expressed the
opinion that it is incumbent upon the Department to present evidence
based on data acquired from agencies on the frequency of arbitration in
the event of adverse actions, the percentage of lawsuits that have
occurred without first going through arbitration, the percentage of
lawsuits that have occurred after arbitration, and the relative costs
of both arbitration and lawsuits to agencies. Additionally, the
commenter requested that the Department explain how the final rule will
ensure that institutions and agencies are meeting the requirements
under this section. Finally, the commenter asked that the Department
protect students by placing restrictions on enrollment or receipt of
Federal financial aid in the event of arbitration proceedings, since
the accrediting agency has already ruled the institution should not be
accredited at all.
Another commenter asserted that current initial arbitration
requirements do not adequately account for issues and concerns raised
by the United Negro College Fund (UNCF) about the fairness of the
accreditation review process in a May 9, 2019 white paper (Biases in
Quality Assurance: A Position Paper on Historically Black Colleges and
Universities and SACSCOC).\5\ Specifically, they noted the lack of
black peer reviewers, the lack of transparent or unambiguous financial
standards, a faulty peer reviewer selection process, and problems with
inter-reviewer reliability and bias among peer reviewers. Arguing that
proposed changes to Sec. Sec. 600.4, 600.5, and 600.6 would exclude
the litigation option as the only means of redress available to
Historically Black Colleges and Universities (HBCUs) in the face of the
bias inherent in the accreditation review process, the commenter asked
that these changes not be made until such time as the issues identified
in the UNCF white paper can be addressed.
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\5\ uncf.org/wp-content/uploads/Biases-in-Quality-Assurance_UNCF-Accreditation-White-Paper-Updated.pdf.
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Discussion: HEA section 496(e) provides that the Secretary may not
recognize the accreditation of any institution of higher education
unless it agrees to submit any dispute involving the final denial,
withdrawal, or termination of accreditation to initial arbitration
prior to any other legal action. As a result, the proposed changes need
not be substantiated with data from accreditation agencies indicating
the exact number of initial arbitration proceedings or the number of
adverse actions that resulted in litigation without recourse to initial
arbitration. We made these changes to align with statutory
requirements. Current regulations in Sec. Sec. 600.4(c), 600.5(d), and
600.6(d), consistent with the HEA, already require institutions to
submit to initial arbitration before initiating any other legal action.
The proposed regulations establish no additional requirements with
respect to initial arbitration. As we explained in the NPRM, the
statutory requirement has not changed; however, the Department's
regulations heretofore have neglected to fully implement the statutory
requirement, which we are correcting with these final regulations.
Through the final regulations, the Department seeks to highlight the
initial arbitration requirement to raise awareness of it and to clarify
the current regulations.
Concerning the question of what additional measures the Department
might take to ensure that institutions and agencies comply with the
requirements of this section, the Department does not intend to
establish a new compliance or enforcement protocol. As previously
noted, the statute and current regulations already require institutions
to enter initial arbitration with their accrediting agencies before
taking additional legal action. We expect institutions and agencies to
comply with those requirements. Certainly, when we know an institution
or accrediting agency ignored or refused to comply with applicable
statutory and regulatory guidelines relevant to initial arbitration,
the Department will act under its current authority. We do not believe
that restricting student enrollment at an institution involved in
initial arbitration or limiting an institution's access to title IV,
HEA funds is either appropriate or beneficial to students. Such
measures would constitute an adverse action against the institution
before it has had the benefit of due process with respect to the
potential revocation of its accreditation.
In response to the commenter who expressed concerns over the
fairness of the accreditation review process as it has been applied to
HBCUs, the Department does not, in any way, dismiss the issues raised
in the UNCF white paper on this matter cited by the commenter. We
believe that where bias is shown to have been a factor in any aspect of
the accreditation process, including initial arbitration, it should be
brought to the Department's attention. Moreover, the use of arbitration
could prove to be a lower-cost and quicker way for an institution that
believes it was treated unfairly by its accrediting agency to seek and
achieve resolution. However, the breadth of what the UNCF white paper
addressed far exceeds the largely procedural issue of initial
arbitration discussed among negotiators
[[Page 58843]]
and clarified in these regulations. Finally, it is not the case, as
suggested by the commenter, that the regulations would restrict or
foreclose any of the legal options available to institutions in
opposing adverse actions taken by an accrediting agency.
Changes: None.
Comments: Regarding the proposed changes to the definition of a
``program leading to a baccalaureate degree in liberal arts'' in Sec.
600.5(e), one commenter expressed concern that the definition would
allow the Department to bypass accrediting agencies, making it possible
for institutions to designate as ``liberal arts programs'' those
composed partially of courses that are not taught by faculty.
Specifically, the commenter cited a Bachelor of General Studies program
offered at a public four-year university, the requirements of which
permit students to earn credits by passing College Level Examination
(CLEP) or similar exams in lieu of attending classes taught by faculty.
Another commenter contended that the Department has not offered
adequate explanation or justification for the proposed changes, in
violation of the Administrative Procedure Act (APA). The commenter
elaborated that the Department proposes to substitute its own judgment,
as well as remove a descriptive list of the categories of ``general
instructional program[s]'' that typically qualify, including programs
in the ``liberal arts subjects, the humanities disciplines, or the
general curriculum.''
Discussion: One commenter may have misinterpreted the context and
applicability of Sec. 600.5(e). The commenter opposed the proposed
changes to the definition of a ``program leading to a baccalaureate
degree in liberal arts,'' based on concerns that the revised definition
will facilitate the introduction of liberal arts programs at the
baccalaureate level that permit alternative means of earning credits
(including successful completion of a test). This definition applies
only to the extent that a liberal arts program offered by a proprietary
institution of higher education may potentially be an exception to the
general requirement that all programs offered by this type of
institution lead to gainful employment in a recognized occupation. The
change does not expand the ability of proprietary institutions to offer
liberal arts programs; rather, it more clearly defines the breadth of
programs that a proprietary institution could not offer without first
qualifying for the statutory exception. A program leading to a degree
at a public or private not for profit institution, such as the one
cited by the commenter, would not be subject to the definition of a
``program leading to a baccalaureate degree'' in current or proposed
Sec. 600.5(e). The applicability of Sec. 600.5(e) notwithstanding,
whether a student may earn credits through testing, life experience, or
some other alternative means, or how many, is not subject to regulation
by the Department.
We disagree with the commenter who believed the Department has
violated the APA by failing to provide an adequate justification for
proposing changes to Sec. 600.5(e). As explained in the NPRM, in Sec.
600.5(e), we propose to clarify the definition of ``program leading to
a baccalaureate degree in liberal arts'' to establish the Department's
responsibility for determining what types of programs qualify, and to
tighten up the regulatory definition of the term, while maintaining and
respecting the grandfathering requirements in the statute. The proposed
changes meet this stated objective.
We further disagree with the commenter that in establishing its
responsibility for determining what types of programs qualify, the
Department is substituting its judgment for what is in the current
regulations. The proposed regulations merely eliminate in this section
the redundant requirement that an institution's accrediting agency
determine a liberal arts program to fall within the generally accepted
instructional categories. Contrary to the assertions of the commenter,
we retained this requirement in proposed Sec. Sec. 600.5(e)(1) through
(4).
Changes: None.
State Authorization (Sec. 600.9)
State Authorization--Religious Institution (Sec. 600.9(b))
Comments: Some commenters agreed with the proposed changes to the
definition of ``religious institution'' used for purposes of Sec.
600.9(b). Others opined that the Department did not provide sufficient
justification for removing the current definition. Commenters expressed
concern that removing the Federal definition of ``religious
institution'' would create an inconsistent standard and would leave
each State to define the term independently, thus allowing institutions
with very little religious connection to qualify for favored treatment
under one State's definition while institutions in other States could
be held to a stricter definition under which they might not qualify as
a ``religious institution.'' In another vein, commenters expressed
concern that classification as a religious institution in a State could
allow the institution to evade consumer protection requirements. Other
commenters believed that the Department should not eliminate the
current regulations because they are limited enough in scope to
safeguard the separation of church and State (First Amendment
Establishment Clause), as well as prevent abuse of exemptions while
protecting students.
Discussion: The Department appreciates all comments in support of
the proposed regulations. We disagree, however, that we should maintain
the current definition. With respect to concerns expressed by
commenters who contended we should keep the current definition, the
current Federal definition of a religious institution for State
authorization purposes may conflict with a State's definition for the
same, which is troubling because State authorization is the mechanism
by which States oversee institutions and perform their role within the
triad. This disconnect has further required such institutions to seek
an alternative way to meet State authorization requirements. The
Department believes that, if the institution is physically located in
or operating in a given State, the State has the authority to
determine, for the purpose of State authorization, how that institution
will be authorized by the State. Furthermore, to meet State
authorization requirements and be legally authorized by a State, a
religious institution is subject to the requirements under 34 CFR
600.9(a)(1) that require the State to have a process to review and
appropriately act on complaints concerning the institution, which would
provide consumer protection. As States define ``religious institution''
in varied ways, we believe that the most effective approach to ensure
our State authorization regulations are aligned with the First
Amendment is to require States to meet the requirements based on their
existing definitions, rather than create a new one. We believe that,
for the purpose of State authorization, States have the right to make
their own decisions regarding whether an institution is a religious
institution or not. States continue to have an incentive to protect
their students, and students will have access to a State complaint
process.
Changes: None.
State Authorization (Sec. 600.9(c))
Student Location and Determinations of a Student's Location
Comments: Most commenters generally supported the proposed change
that specifies that institutions
[[Page 58844]]
should determine which State's authorization laws are applicable to an
institution based on a student's location and not a student's
residence. Commenters noted that using a student's location rather than
residency was more appropriate because this framework matches the
approach that States take. While residency requirements vary by State,
a State's authorization jurisdiction is based upon the location of the
educational activity. Commenters also felt that this change would allow
students who have not established a legal or permanent residency in a
State to benefit from State requirements for an institution to offer
distance education in that State. Some commenters noted, however, that
there is a risk that, because institutions already have to do more than
the proposed regulations would require to meet State or National
Council for State Authorization Reciprocity Agreements (NC-SARA)
reporting requirements, an institution would solely follow the Federal
standard, believing this standard supersedes State requirements, and
could thus be found to be out of compliance in a State or with NC-SARA.
On the other hand, other commenters felt that their existing process
and procedures allow them to comply with State and NC-SARA reporting
requirements.
Commenters generally supported the proposal to require institutions
to have policies or procedures to make determinations about the States
in which its students are located. Many commenters also agreed with
having policies and procedures that set how the institution will
determine a student's location at the time of initial enrollment, as
well as for updating its records if a student's location changes, in
order to ensure that the correct State authorization is obtained.
Commenters believed the proposed requirements would reduce confusion
about where the student is located for State authorization distance
education purposes. Many commenters noted their appreciation that the
proposed regulations allow institutions to develop the process for
determining location that is best suited to their organization and the
student population they serve. One commenter was concerned that the
Department's proposal would grant institutions the authority to
determine a student's location based on undefined policies or
procedures, and that since there is no mechanism for students or States
to learn how institutions determine which State laws apply, this could
result in institutions minimizing their regulatory burdens. The
commenter believed that the States alone should determine which State
laws apply, rather than rely on institutions to do so. Another
commenter believed that, instead of leaving it up to an institution's
discretion, there should be a definition for the concept of
``location'' but did not propose what the definition should be. Yet
another commenter felt the Department should require an institution to
determine a location for all enrolled students not less than annually
and that the institution update its determination of a student's
location when the institution should reasonably know about the change.
Many commenters believed that the proposed regulations simplify the
institutional processes needed to establish and document a student's
location at the time of initial enrollment and later through a formal
notification process for student change of address. Some commenters
sought clarification on how to determine ``time of enrollment'' for
determining a student's location because there could be a time lag
between when a student enrolls at a location and where the student is
located once the course begins. Other commenters also asked for
clarification on what constitutes a ``formal receipt of information.''
One commenter asked for clarification about whether the Department
would expect that institutions use a uniform location-reporting
procedure in all instances across all individual units within a single
institution.
Discussion: The Department appreciates the comments in support of
the proposed regulations. Regarding the concern that, because
institutions already have to do more than the proposed regulations
would require to meet State or NC-SARA reporting requirements, an
institution would solely follow the Federal standard, believing this
standard supersedes State requirements, and could thus be found to be
out of compliance in a State or with NC-SARA, these final regulations
do not absolve institutions from complying with State laws nor do they
require participation in reciprocity agreements or override the
requirements of such agreements. Furthermore, we disagree with the
comment that the States should determine which State laws apply rather
than institutions. It is an institution's responsibility to determine
in which State a student is located at the time of initial enrollment,
and based on this information, the institution determines which State's
authorization requirements apply.
We also disagree that an institution determines a student's
location completely at its discretion. The institution determines the
student's location at the time of initial enrollment based on the
information provided by the student, and upon receipt of information
from the student that their location has changed, in accordance with
the institution's procedures. Institutions may, however, develop
procedures for determining student location that are best suited to
their organization and the student population they serve. For instance,
institutions may make different determinations for different groups of
students, such as undergraduate versus graduate students. We also do
not believe it is necessary to determine location for all enrolled
students annually, but rather believe that determination at the time of
a student's initial enrollment and upon a formal notification by the
student of his or her change of address to another State, in accordance
with the institution's procedures, is sufficient to ensure that
students will receive information they need while not being overly
burdensome or costly to institutions. As discussed in the preamble to
the NPRM, we believe that we should avoid subjecting an institution to
unrealistic and burdensome expectations of investigating and acting
upon any information about a student's whereabouts that might come into
its possession. It is in the interest of both institutions and students
to have understandable, explicit policies that pertain to the
maintenance of student location determinations.
With respect to determining ``time of enrollment'' for determining
a student's location, we specify in the NPRM that the location is
determined at the time of a student's initial enrollment in a program
(as opposed to the time of a student's initial application to the
institution). We did not attach any further conditions to this
determination. We also provided that, with respect to a ``formal
receipt of information'' regarding change of location, this information
would come from the student to the institution in accordance with the
institution's procedures for changing their location to another State.
The institution would need to establish or maintain and document the
change of address process. Finally, as we discuss in the preamble to
the NPRM, we expect institutions to consistently apply their policies
and procedures regarding student location to all students, including
students enrolled in ``brick-and-mortar'' programs.
Changes: None.
[[Page 58845]]
State Requirements
Comments: Many commenters supported the requirement that distance
education programs should be required to meet any State authorization
requirements in States where they do not maintain a physical presence
but enroll students. Some commenters asked that the Department define
what an institution must do to meet the requirement in Sec.
600.9(c)(1)(i) that an institution must meet any of that State's
requirements for it to be legally offering postsecondary distance
education or correspondence courses in that State, as well as what
documentation is required. A couple of commenters were concerned about
the impact on the reciprocity agreement of the proposed requirement in
Sec. 600.9(c)(1)(ii), under which an institution would be ``subject to
any limitations in that agreement and to any additional requirements of
the State'' because, if States are able to require institutions to meet
State requirements outside of the reciprocity agreement, these
requirements could contradict or go beyond the scope of existing NC-
SARA provisions and institutions would have to engage in research and
fulfill any additional requirements, which would undermine a key
purpose of the reciprocity agreement. One commenter felt that the
Department should recognize a State's prerogative to establish
exemptions from formal approval and to consider exempt institutions as
authorized to offer distance education.
Discussion: The Department appreciates the comments in support of
the proposed regulations. Institutions are required to know what State
requirements exist for an educational program to be offered to a
student in a particular State, and the required approvals that
constitute what is needed for the program to be authorized by that
State. Documentation should reflect that the institution has met these
applicable State requirements, which could include evidence that a
State waives direct authorization of the particular institution or
institutions of its type. These requirements would not have any bearing
on reciprocity agreements. As we stated in the preamble of the December
19, 2016, final regulations (81 FR 92232), each State in which an
institution is offering distance education remains the ultimate
authority for determining whether an institution is operating lawfully
in that State, regardless of whether a non-State entity administers the
agreement, including whether an institution in a reciprocity agreement
is operating in that State outside the limitations of that agreement.
The regulations further provide that an institution offering distance
education in a State in which the institution is not physically located
or in which the institution is otherwise subject to a State's
jurisdiction, as determined by the State, must meet any of that State's
requirements to be legally offering distance education in that State.
However, even if the State does not have any specific approval
requirements for an institution to be offering distance education in
that State, Sec. 600.9(a)(1) requires that, for an institution that
has physical presence in a State, that State must offer a process to
review and appropriately act on complaints concerning the institution,
including enforcing applicable State laws, for the institution to meet
the State authorization requirements. We agree with commenters that it
is important to revise Sec. 600.9(c)(1)(ii) for consistency with the
revised definition of the term ``State authorization reciprocity
agreement,'' in which we provide that a reciprocity agreement does not
prohibit any member State of the agreement from enforcing its own
general-purpose State laws and regulations outside of the State
authorization of distance education. Accordingly, we have revised the
provision to provide that, in the case of an institution covered by a
reciprocity agreement, the institution is considered to meet State
requirements for it to be legally offering postsecondary distance
education or correspondence courses in the State, subject to any
limitations in that agreement and to any additional requirements of the
State not relating to authorization of distance education.
Changes: We have revised Sec. 600.9(c)(1)(ii) to provide that, for
an institution covered by a reciprocity agreement, the institution is
considered to meet State requirements for it to be legally offering
postsecondary distance education or correspondence courses in the
State, subject to any limitations in that agreement and to any
additional requirements of the State not relating to authorization of
distance education.
State Complaint Process
Comments: Some commenters supported eliminating the State complaint
process requirement to protect the eligibility of students who are
located in States that do not offer a complaint process to receive
title IV, HEA assistance to attend distance education programs,
agreeing that Sec. 600.9(a)(1) already addresses the State complaint
process and that the State complaint process requirement under Sec.
600.9(c)(2) is duplicative of the requirements under Sec. 668.43(b).
Other commenters believed that the State complaint process requirement
is not redundant because, even though the Department states that
eliminating the requirement would allow students to receive Federal
student aid even if the State they are located in does not have a State
complaint process, this change would conflict with the definition of
``State authorization'' under Sec. 600.9(a)(1), which provides that
State authorization requirements include that the State have ``a
process to review and appropriately act on complaints concerning the
institution, including enforcing applicable State laws.'' Since the
only entity that can enforce a specific State's laws is that State,
institutions would not be able to comply with the State authorization
requirements if there is not a complaint process available to students
in their own States. The commenter argued that the final regulations
should reflect a State's authority to accept, investigate, and act on
complaints both from students located in that State and from students
enrolled at institutions physically located in that State. In a similar
vein, another commenter opined that nothing in Sec. 668.43(b) requires
that, as a condition of State authorization, an institution only be
permitted to operate in a jurisdiction in which there is a complaint
process. The commenter also indicated that States should collect
complaint records and make these publicly available in a central
database. Another commenter recommended that the Department require
States in which an institution is located to share a copy of complaints
with other States whose residents are enrolled in that institution.
Discussion: The Department appreciates the comments in support of
the proposed regulations. With respect to the other comments, nothing
in the regulations prevents a State from providing a State complaint
process that an institution offering distance education would have to
comply with in order to operate in that State, unless the State and
institution have joined a reciprocity agreement that provides an
alternate means for addressing student complaints. Furthermore, with
respect to the disclosures under Sec. 668.43(b), it follows that for
an institution to provide a student or a prospective student with
contact information for filing complaints with its State approval or
licensing entity and any other relevant State official or agency that
would appropriately handle a student's complaint, the institution would
need to have such information to provide or it would be out of
compliance with the regulations. Regarding the suggestion that States
collect complaint records
[[Page 58846]]
and house them in a publicly available central database and that States
in which an institution is located share a copy of complaints with
other States whose residents are enrolled in that institution, we
decline this suggestion. Such complaints generally fall under the
jurisdiction of the States and the accrediting agencies. Additionally,
the Federal Trade Commission maintains a database of consumer
complaints. While the Department declines to take these
recommendations, nothing in these regulations prevents States from
taking these actions if they wish to do so.
The Department clarifies that the contact information provided may
be for whichever entity or entities the State designates to receive and
act upon student complaints. Contact information is not necessarily
required for each of the following: A State approval entity, a State
licensing entity, and another relevant State official or agency. If the
State has only designated one of these types of entities, contact
information for that one entity is sufficient.
Changes: We have included an amendatory instruction to remove the
text of current Sec. 600.9(c)(2). We also have redesignated proposed
Sec. 600.9(c)(1)(ii)(A), (B), and (C) as Sec. 600.9(c)(2)(i), (ii),
and (iii).
Special Rules Regarding Institutional Accreditation or Preaccreditation
(Sec. 600.11)
Comments: One commenter expressed concern that the proposed changes
to the regulations would permit institutions to more easily switch to a
new accrediting agency or maintain a back-up agency, enabling them to
skirt enforcement. The commenter opined that this change is
inconsistent with the statutory requirement in HEA section 496(h), 20
U.S.C. 1099b(h), that the Secretary not recognize the accreditation of
an institution seeking to change accrediting agencies, unless the
institution can demonstrate reasonable cause and submits all relevant
materials; as well as the statutory requirement in HEA section 496(i),
20 U.S.C. 1099b(i), that the Secretary not recognize the accreditation
of an institution that maintains accreditation from more than one
agency unless the institution demonstrates reasonable cause and submits
all relevant materials, and designates one agency as its accrediting
agency for title IV purposes.
Discussion: We disagree with the commenter that the changes to
Sec. 600.11 are inconsistent with the statutory requirements of HEA
section 496(h) and (i).
HEA section 496(h) provides that ``The Secretary shall not
recognize the accreditation of any otherwise eligible institution of
higher education if the institution is in the process of changing its
accrediting agency or association, unless the eligible institution
submits to the Secretary all materials relating to the prior
accreditation, including material demonstrating reasonable cause for
changing the accrediting agency or association.'' The new regulations
in Sec. 600.11(a) continue to require an eligible institution to
submit to the Secretary all materials related to its prior
accreditation or preaccreditation. Moreover, the new regulations
require additional documentation, including substantiation of
reasonable cause for the change.
The ``dual accreditation rule'' provision in HEA section 496(i)
states that ``The Secretary shall not recognize the accreditation of
any otherwise eligible institution of higher education if the
institution of higher education is accredited, as an institution, by
more than one accrediting agency or association, unless the institution
submits to each such agency and association and to the Secretary the
reasons for accreditation by more than one such agency or association
and demonstrates to the Secretary reasonable cause for its
accreditation by more than one agency or association. If the
institution is accredited, as an institution, by more than one
accrediting agency or association, the institution shall designate
which agency's accreditation shall be utilized in determining the
institution's eligibility for programs under this chapter.'' The new
regulations in Sec. 600.11(b) continue to require the eligible
institution to submit to the Secretary all materials related to its
prior accreditation or preaccreditation, and clarify the conditions
under which the Secretary would not determine the institution's cause
for multiple accreditation to be reasonable, including when the
institution has had its accreditation withdrawn, revoked, or otherwise
terminated in the prior two-year period and when the institution has
been subject to a probation or equivalent, show cause order, or
suspension. The new regulation does provide that the Secretary may
consider an institution's interest in obtaining multiple accreditation
to be reasonable if it is based on geographic area, program-area focus,
or mission, but the institution must provide evidence to explain or
substantiate its request.
Changes: None.
Comments: Two commenters objected to the provisions in this
section, arguing that they create a loophole in violation of the HEA
and are contrary to law and in excess of the Department's statutory
jurisdiction within the meaning of section 706 of the APA. The
commenters note that under HEA section 496(j), an institution ``may not
be certified or recertified'' for purposes of title IV if the
institution has had its ``accreditation withdrawn, revoked, or
otherwise terminated for cause,'' unless such action has been
``rescinded by the same accrediting agency.'' One commenter opined that
the Department failed to provide sufficient evidence to support this
change. One commenter suggested that, in the event an institution seeks
multiple accreditations and has been subject to any kind of action, the
Department should require that a problem raised by one agency should
trigger automatic review by the other agency with a higher evidentiary
bar to show why a similar sanction should not be applied.
Discussion: We disagree with commenters that Sec. 600.11 creates a
loophole that would violate the HEA and is contrary to law and in
excess of the Department's statutory jurisdiction within the meaning of
section 706 of the APA. As discussed above, the new provisions are
consistent with HEA section 496(h) and (i). HEA section 496(j)
addresses the impact on an institution from the loss of accreditation.
Again, as described above, we continue to hold institutions to the
limitations imposed when accreditation has been withdrawn, revoked, or
otherwise terminated for cause during the preceding 24 months pursuant
to Sec. 600.11(a)(1)(ii)(B).
We further disagree with the commenter who asserted that the
Department has failed to provide enough evidence to support this
change. As explained in the NPRM (84 FR 27414), the proposed regulation
seeks to maintain guardrails to ensure that struggling institutions
cannot avoid the consequences of failing to meet their current
accrediting agency's standards by attaining accreditation from another
agency, while maintaining recourse for institutions that have been
treated unfairly or have legitimate reasons for seeking multiple
accreditation unrelated to findings or allegations of noncompliance
with the quality standards of its current accrediting agency. The
potential for an institution to face loss of its accreditation without
being afforded its due process rights as defined in Sec. 602.25, or as
the result of an agency's failure to respect the institution's stated
mission, supports the need for this change.
Regarding the suggestion from a commenter that, where an
institution seeking multiple accreditations has been
[[Page 58847]]
subject to any kind of action, the Department should require the
problem raised by one to trigger an automatic review by the other
agency to show why a similar sanction should not be applied, we believe
such a requirement would be superfluous. The applicable amendatory
language as proposed already stipulates that the Secretary will not
determine the cause for seeking accreditation from a different or
second accrediting agency to be reasonable if the institution has had
its accreditation withdrawn, revoked, or otherwise terminated for cause
during the preceding 24 months or has been subject to a probation or
equivalent, show cause order, or suspension order during the preceding
24 months. Any action initiated by the institution's current agency
would necessarily be reviewed by the Department and, unless found to be
related lack of due process, inconsistently applied standards or
criteria, or failure to respect the institution's stated mission not
considered reasonable cause to seek additional accreditation. At that
point, we would not recognize the additional accreditation.
We also disagree with the commenters who stated that the Department
failed to provide data or evidence to support the need for the proposed
regulatory changes during the negotiated rulemaking. As we stated
previously in this preamble, the changes to the regulations are based
on many factors, including feedback we received from the public,
studies conducted by higher education associations, and emerging trends
in postsecondary education. For example, concerns have been raised
about the lack of innovation in accreditation, the challenges that new
agencies have in gaining recognition, and the difficulties that new
institutions have in becoming accredited and gaining access to title IV
funds.\6\ One challenge new accrediting agencies face in gaining
recognition is the need to serve as a Federal gatekeeper for at least
one institution or program. Accredited institutions or programs are
unlikely to leave a well-established accrediting agency, thereby
risking their access to title IV funds, even if a new agency may be
more appropriate to the mission of the institution, support educational
innovation at lower cost, have higher standards for academic
excellence, or enable an institution to meet the needs of its students.
This regulatory change to permit dual accreditation will allow
institutions to have greater choice in selecting an accrediting agency
that best aligns with the institution's mission, demonstrates
educational excellence to potential students, peer institutions, or
employers, and supports innovative pedagogical approaches. In addition,
in order for new accrediting agencies to have the ability to become
recognized, they need to be able to attract respected institutions to
their membership, which is unlikely if an institution is required to
abandon its current agency first. Finally, as we eliminated geography
from an accrediting agency's scope, it is important to permit dual
accreditation during the period in which an institution is undergoing
review to change its agency.
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\6\ https://www.educationnext.org/college-accreditation-explained-ednext-guide-how-it-works-whos-responsible/.
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Furthermore, the Department developed a list of proposed regulatory
provisions based on advice and recommendations submitted by individuals
and organizations as testimony in a series of three public hearings in
September of 2018, as well as written comments submitted directly to
the Department. Department staff also identified issues for discussion
and negotiation. We developed the proposed regulations that we
negotiated during negotiated rulemaking with specific objectives for
improvement, including addressing the requirements for accrediting
agencies in their oversight of member institutions or programs;
establishing requirements for accrediting agencies to honor
institutional mission; revising the criteria used by the Secretary to
recognize accrediting agencies, emphasizing criteria that focus on
educational quality; developing a single definition for purposes of
measuring and reporting job placement rates; simplifying the
Department's process for recognition and review of accrediting
agencies; and promoting greater access for students to high-quality,
innovative programs. We believe the changes to the regulations in this
section align with these objectives.
We do not think it is appropriate for the Department to require
that an action taken by one agency should trigger automatic review by
another agency, with a higher evidentiary standard, to show why a
similar sanction should not be applied, since our current regulations
do not require this and an institution could be compliant with the
standards of one agency even if not compliant with the standards of
another. Currently, Sec. 602.28 requires an agency to investigate an
institution if another accrediting agency subjects it to any adverse
action or places it on probation. A higher evidentiary standard is not
appropriate.
Changes: None.
Comments: One commenter suggested that a provision be added to this
section to permit an accrediting agency to prohibit its recognized
institutions from maintaining accreditation by more than one recognized
agency.
Discussion: We disagree with the commenter's suggestion to permit
an accrediting agency to prohibit its recognized institutions from
maintaining accreditation by more than one recognized agency as it
could have an anticompetitive impact and prevent innovative changes in
higher education delivery. We will serve institutions and students
better when accrediting agency standards align with the institution's
educational objectives and stated mission. In some cases, this may
require an institution to seek accreditation from more than one
accrediting agency or to change accrediting agencies.
Changes: None.
Special Rules Regarding Institutional Accreditation or Preaccreditation
(Sec. 600.11)
Multiple Accreditation (Sec. 600.11(b))
Comments: One commenter opined that the changes to Sec. 600.11(b)
provide too much discretion to determine that an accrediting agency
acted improperly and allows an institution to seek alternate
accreditation when the institution does not meet its original
accrediting agency's standards. The commenter agreed that we should
permit an institution to select a comprehensive institutional
accrediting agency as its title IV gatekeeper and seek mission-based
institutional accreditation as well.
Discussion: We disagree with the commenter that the changes to
Sec. 600.11(b) provide too much discretion for the Department to
determine that an accrediting agency acted improperly or to allow an
institution to seek a new accrediting agency when the institution does
not meet its original accrediting agency's standards. The institution
seeking a change of accrediting agencies or multiple accreditation must
demonstrate to the Secretary a good reason for seeking accreditation by
a different or additional agency in order for that request to be
approved. Moreover, the regulations limit the ability of institutions
that have been subject to a probation or equivalent, show cause order,
or suspension order or that have had their accreditation withdrawn,
revoked, or otherwise terminated for cause during the preceding 24
months, from making such a change.
We thank the commenter for support of the provision that enables an
[[Page 58848]]
institution to select a comprehensive institutional accrediting agency
as its title IV gatekeeper and seek accreditation from a mission-based
institutional accrediting agency.
Changes: None.
Comments: Two commenters objected to the provisions of Sec.
600.11(b)(2)(i)(B) that enable the Secretary to determine an
institution's justification for seeking multiple accreditation or
preaccreditation to be reasonable if the institution's primary interest
in seeking multiple accreditation is based on its mission. The
commenters asserted that this grants exemptions for institutions with a
``religious mission'' from rules preventing agency-shopping if the
institution claims an accrediting agency was not respecting its
religious mission.
Discussion: The proposed regulations provide latitude to the
Secretary to determine that an institution's interest in seeking
multiple accreditation is reasonable if it seeks accreditation by more
than one accrediting agency as a result of its mission, geographic
area, pedagogical focus, or program area focus. The Secretary will not
be required to make such a determination. An institution seeking
multiple accreditation would need to convince the Secretary of the
reasonableness of its request. If an institution appears to be avoiding
compliance with its current accrediting agency's standards by seeking
accreditation from a new or additional accrediting agency, the
Secretary could determine that the agency's request is not reasonable
and deny that request.
Changes: None.
Severability (Sec. 600.12)
Comments: None.
Discussion: We have added Sec. 600.12 to clarify that if a court
holds any part of the regulations for part 600, subpart A, invalid,
whether an individual section or language within a section, the
remainder would still be in effect. We believe that each of the
provisions discussed in this preamble serve one or more important,
related, but distinct, purposes. Each provision provides a distinct
value to the Department, the public, taxpayers, the Federal government,
and institutions separate from, and in addition to, the value provided
by the other provisions.
Changes: We have added Sec. 600.12 to clarify that we designed the
regulations to operate independently of each other and to convey the
Department's intent that the potential invalidity of one provision
should not affect the remainder of the provisions.
Change in Ownership Resulting in a Change in Control for Private
Nonprofit, Private For-Profit, and Public Institutions (Sec. 600.31)
Comments: One commenter expressed support for the changes to Sec.
600.31 that clarify the terms of a change of ownership or ownership
interest. Another commenter suggested that we clarify that the term
``ownership'' is meant to include changes in management or control of
public institutions.
Discussion: We thank the commenter who supported the changes to
this section. Further, we agree with the commenter who suggested that
the term ``ownership'' as defined in Sec. 600.31 requires
clarification with respect to public institutions. Accordingly, we
clarify that ``change in ownership'' as applied in this section
includes changes in management or control of public institutions. Such
a change in management could include instances in which public
institutions are merged into a new system or merged with another
institution, or instances when boards of trustees are merged to provide
joint oversight of more than one institution, among other things. This
does not include instances when a new president or chancellor is hired
or appointed, or when there is a change in the individual who holds the
position of SHEEO.
Changes: None.
Eligibility of Additional Locations (Sec. 600.32)
Comments: Several commenters objected to the proposed change that
would allow an entity acquiring a closing location to be liable only
for improperly spent title IV funds and unpaid refunds from the prior
and current academic years. Some argued that the Department is
attempting to solve the problem of institutions closing without
sufficient resources to repay outstanding liabilities by reducing the
requirement for these institutions to make students, the Department,
and taxpayers whole, rather than fulfilling its enforcement
responsibility by requiring institutions to post letters of credit in
certain circumstances to protect the Federal fisc. Others asserted that
the change could result in students being duped into thinking they are
being offered a new educational opportunity, while potentially losing
access to closed school loan discharges in the process. The commenters
requested that the Department require that purchasers accept all past
liabilities for the locations they acquire, except as determined by the
Secretary on the strength of the purchaser's change of ownership
application with the Department,\7\ arguing that such action would
enable the Department to retain some discretion to prevent
inappropriate or high-risk purchases.
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\7\ Application for Approval to Participate in Federal Student
Financial Aid Programs is available at eligcert.ed.gov/ows-doc/eapp.htm.
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Discussion: We disagree that Sec. 600.32 should be amended to
require purchasers to accept all past liabilities for the school
locations they acquire, except as determined by the Secretary on the
strength of the purchaser's application. We believe it is reasonable to
require new owners to accept liability for all financial aid credit
balances (See Sec. 685.216 regarding unpaid refunds) owed to students
who received title IV, HEA program funds and for all improperly
expended or unspent title IV, HEA program funds received during the
current academic year and up to one academic year prior by the
institution that has closed or ceased to provide educational programs.
This timeline mirrors the period of time during which the Department
typically conducts program reviews, which includes the current year and
the prior year. Program reviews focus on the current and prior year
because they provide a more accurate picture of the institution's
current administrative strength and function. This provision provides
the same window to an outside entity to evaluate the extent to which
potential liability exists due to the actions of a prior, unrelated
owner, or to secure financing. There may be cases when the acquisition
of a closing school by a new owner or entity serves the best interest
of students, the local community, and taxpayers. Limiting the potential
liability for which a new owner or entity is responsible does not
relieve the past owner or entity of its liability for funds owed to the
Department as a result of past actions, insufficiencies, or borrower
defense to repayment claims.
We also disagree that the changes to this section would ``dupe''
students into thinking they are being offered a new educational
opportunity and deprive them of a closed school loan discharge. While
it is true that this regulatory change may precipitate fewer school
closings and, as a result, fewer closed school loan discharges,
students will have the option of completing their program or
transferring to a new institution to do so, rather than losing the time
and effort they have invested at one institution by starting over,
repeating classes, or earning additional credits elsewhere. This
regulation does not interfere with a borrower's right or
[[Page 58849]]
ability to submit a borrower defense to repayment claim and seek relief
from the Department in the event that misrepresentations occurred under
prior ownership; however, it does limit the liability that a new owner
assumes for actions that the prior owners took or failed to take.
Changes: None.
Severability (Sec. 600.33)
Comments: None.
Discussion: We have added Sec. 600.33 to clarify that if a court
holds any part of the regulations for part 600, subpart C, invalid,
whether an individual section or language within a section, the
remainder would still be in effect. We believe that each of the
provisions discussed in this preamble serve one or more important,
related, but distinct, purposes. Each provision provides a distinct
value to the Department, the public, taxpayers, the Federal government,
and institutions separate from, and in addition to, the value provided
by the other provisions.
Changes: We have added Sec. 600.33 to make clear that the
regulations are designed to operate independently of each other and to
convey the Department's intent that the potential invalidity of one
provision should not affect the remainder of the provisions.
Termination and Emergency Action Proceedings (Sec. 600.41)
Comments: Several commenters favored the changes to Sec. 600.41.
These commenters did not provide additional details other than to note
their support.
Discussion: We thank the commenters for their support to delete an
outdated reference formerly located in Sec. 600.41(a)(1)(ii)(B) that
allowed for termination of an institution's eligibility under a show-
cause hearing, if the institution's loss of eligibility resulted from
the institution's having previously qualified as eligible under the
transfer of credit alternative to accreditation. This alternative has
not been possible since its repeal in 1992.
We further thank the commenters for their support of updating the
terminology in Sec. 600.41(d) that changes the word ``certify'' to
``originate,'' which is used in the Direct Loan Program, the only
program under which the Department currently makes loans.
Changes: None.
Severability (Sec. 600.42)
Comments: None.
Discussion: We have added Sec. 600.42 to clarify that if a court
holds any part of the regulations for part 600, subpart D, invalid,
whether an individual section or language within a section, the
remainder would still be in effect. We believe that each of the
provisions discussed in this preamble serve one or more important,
related, but distinct, purposes. Each provision provides a distinct
value to the Department, the public, taxpayers, the Federal government,
and institutions separate from, and in addition to, the value provided
by the other provisions.
Changes: We have added Sec. 600.42 to make clear that the
regulations are designed to operate independently of each other and to
convey the Department's intent that the potential invalidity of one
provision should not affect the remainder of the provisions.
The Secretary's Recognition of Accrediting Agencies
What definitions apply to this part? (Sec. 602.3)
Comments: Two commenters opposed the proposed changes in Sec.
602.3(b) that permit accrediting agencies to retain recognition if they
meet a newly proposed definition of ``substantial compliance,'' rather
than requiring them to be fully compliant with all applicable
standards. The commenters asserted that this proposed definition is
inconsistent with HEA section 496 and makes it virtually impossible for
the Department to hold an agency accountable when it fails to perform.
Discussion: We disagree with the commenters that the proposed
definition of ``substantial compliance'' is inconsistent with the
statute and makes it virtually impossible for the Department to hold an
agency accountable when it fails to perform. For many years the
Department relied on the ``substantial compliance'' standard in making
recognition determinations and, currently, some accrediting agencies
already recognize ``substantial compliance'' in their own standards.\8\
The statute requires the accrediting agency or association to
demonstrate the ability and experience necessary to operate as an
accrediting agency or association. It does not require that the
accrediting agency demonstrate that it has applied each and every one
of its standards, as evidenced by the fact that an accrediting agency
must accredit or preaccredit only one institution prior to petitioning
the Department for recognition. It also does not require the Department
to deny recognition to an otherwise well-performing accrediting agency
simply because of minor administrative omissions or errors, or because
the agency had to make a minor exception to its regular policies in
order to serve the needs of students. We see a significant difference
between ``substantial compliance,'' which means that an agency is
essentially compliant with the purpose or objective of the regulations,
versus a finding of failing to perform or being noncompliant, for which
the Department would make a finding of noncompliance.
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\8\ www.wscuc.org/book/export/html/924.
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In fact, by providing for ``substantial compliance'' and a process
for monitoring institutional improvement, the Department may address
minor concerns before they become major concerns and ensure that they
are resolved quickly and appropriately. The monitoring report will
afford accrediting agencies that are in substantial compliance with the
criteria for recognition the opportunity to implement corrected
policies or update policies to align with compliant practices. The
monitoring report provides the Department with an additional oversight
tool to ensure integrity in accreditation, in cases where the
accrediting agency deficiency does not rise to the level of non-
compliance or a full compliance report.
Changes: None.
Comments: One commenter suggested that we could improve the
definition of ``programmatic accrediting agency'' by beginning with the
word ``usually'' or adding the phrase, ``this does not include agencies
which accredit freestanding institutions offering a specific
educational program.'' The commenter asserted that the proposed
definition does not address situations in which closely related
educational programs enable students to enter a broad spectrum of
graduate and professional schools, and to embark on a variety of
careers. Another commenter remarking on the definition of
``programmatic accrediting agency'' encouraged the Department to ensure
that programmatic accrediting agencies have the autonomy to focus on
institutional quality.
Discussion: While we recognize that some programmatic agencies
accredit schools with programs that prepare students to enter a broad
spectrum of graduate and professional schools, and to embark on a
variety of careers, we believe the definition does not preclude them
from continuing to do so, nor does it require that a program lead to
only one career pathway or option. The Department appreciates the
commenter's request that we ensure programmatic accrediting agencies
have the autonomy to focus on quality, especially when programmatic
accrediting agencies also serve as institutional accrediting agencies
at
[[Page 58850]]
institutions that offer a single program or closely related programs
that align with the programmatic accrediting agency's mission. We are
confident that these regulations provide that autonomy.
Changes: None.
Comments: Several commenters requested additional time to come into
compliance with the change from national and regional accreditation to
institutional accreditation. The commenters did not object to this
change but noted that entities that distinguish between national and
regional accreditation in some of their policies will need to amend
those policies. They cited, for example, some State laws and
regulations that distinguish between national and regional
accreditation and reported that those State regulators would need time
to amend those laws and adjust the procedures in implementing those
laws. Some commenters noted that the legislature in their State is not
slated to meet again until 2021.
Discussion: We appreciate the commenters' support and believe the
State policies referenced provide further evidence for the need to
eliminate the artificial distinction between regional and national
accreditation because some of those policies deny opportunities for
successful students to enter certain fields, it is incumbent upon State
regulators to ensure the laws pertaining to an academic institution's
required accreditation to qualify graduates for licensure and the
procedures used to implement those laws do not disadvantage students
who enroll in and complete programs at institutionally accredited
institutions. While we cannot compel a State to act, we hope that
States will recognize the Department's revised accrediting agency
designations and make the necessary changes in their own laws or
regulations.
Changes: None.
Severability (Sec. 602.4)
Comments: None.
Discussion: We have added Sec. 602.4 to clarify that if a court
holds any part of the regulations for part 602, subpart A, invalid,
whether an individual section or language within a section, the
remainder would still be in effect. We believe that each of the
provisions discussed in this preamble serve one or more important,
related, but distinct, purposes. Each provision provides a distinct
value to the Department, the public, taxpayers, the Federal government,
and institutions separate from, and in addition to, the value provided
by the other provisions.
Changes: We have added Sec. 602.4 to clarify that we designed the
regulations to operate independently of each other and to convey the
Department's intent that the potential invalidity of one provision
should not affect the remainder of the provisions.
Link to Federal Programs (Sec. 602.10)
Comments: One commenter objected to the change in this section,
stating that the Department proposes to remove a requirement that
accrediting agencies demonstrate their worth as gatekeepers to Federal
aid and fails to explain or justify why it believes that simply sharing
an institution with an accrediting agency recognized as a gatekeeper to
Federal aid qualifies a brand-new accrediting agency to immediately
gain access to full gatekeeping authority.
Discussion: Section 602.10 does not eliminate any requirements.
Rather, it provides that if an agency accredits one or more
institutions that participate in HEA programs and that could designate
the agency as its link to HEA programs, the agency satisfies the
Federal link requirement, even if the institution currently designates
another institutional accrediting agency as its Federal link.
The significance of a Federal link is that it provides the basis
for the Department's recognition of an accrediting agency. A Federal
link, in and of itself, does not ensure recognition, nor does it ensure
participation in title IV programs. A Federal link simply affirms that
the agency's accreditation is a required element in enabling at least
one of the institutions or programs it accredits to establish
eligibility to participate in some other Federal program.
Changes: None.
Geographic Area of Accrediting Activities (Sec. 602.11)
Comments: Several commenters wrote in support of the Department's
proposal, stating that it will ultimately relieve students of the
burden to advocate for the quality of their education if their
institution of record is nationally accredited. Another commenter
agreed that it is problematic when students are treated disparately
based on accrediting agency, especially since all agencies adhere to
the same Department requirements. One commenter thanked the Department
for clarifying that an agency must conduct its activities within a
region or group of States, and for emphasizing that we would not
require any institution or program to change to a different accrediting
agency as a result of these regulatory changes.
Discussion: We appreciate the commenters' support. The Department
continues to require accrediting agencies to clarify the geographic
area in which they operate, including all branch campuses and
additional locations.
Changes: None.
Comments: One commenter objected to the elimination of the
distinction between national and regional accrediting agencies based on
a belief that there are differences in their standards for general
education and faculty quality.
Discussion: The change in nomenclature is intended specifically to
counter this prevalent misconception. In fact, the Department applies
the same standards for recognition to both national and regional
accrediting agencies. Accrediting agencies, both regional and national,
are often termed ``nationally recognized,'' including in the HEA and
Department materials, which can also lead to confusion.\9\ Accrediting
agencies do establish their own standards for general education and
faculty quality and there is some variation in the standards they have
set. For example, many agencies already allow for instructors in
applied or vocational programs to substitute years of experience for
academic credentials, which may not exist in some fields. However,
those standards do not differ based on the agency's geographic scope or
prior classification as a national or regional accrediting agency.
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\9\ 20 U.S.C. 1001.
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Changes: None.
Comments: One commenter expressed concern that the Department's
actions may interfere with academic freedom, while providing little or
no relief to students whose academic credits are not accepted for
transfer to another institution. The commenter asserted that State and
Federal regulations create a floor in which an institution can operate,
and an institution may choose to have a higher ceiling. The commenter
remarked that institutions will still conduct their own evaluation of
transfer credits, and the Department should not have a role in setting
policy on academic determinations such as transfer credits. Other
commenters echoed the position that the decision whether to accept
credits for transfer falls on the institution based on its independent
assessment of the quality of the prior learning.
Discussion: The Department agrees that the determination of whether
to accept credits for transfer falls on the institution based on its
independent assessment of the quality of the prior
[[Page 58851]]
learning. The change to this regulation is designed not to interfere
with academic freedom, but rather, to counter a detrimental myth that
institutions that are regionally accredited are of higher academic
quality than institutions that are nationally accredited. A recent
review of regional accrediting standards points to a pervasive lack of
focus on student learning and student outcomes among those agencies,
although the same is not true among national accrediting agencies.\10\
Therefore, it is hard to make the case that regional accrediting
agencies do more to ensure academic quality or place higher demands
upon the institutions they accredit than national accrediting agencies.
That said, because many of the most selective institutions in the
United States are accredited by regional accrediting agencies, these
agencies benefit from the reputations of a small number of their member
institutions that are highly competitive and serve only the most well-
qualified applicants.
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\10\ www.americanprogress.org/issues/education-postsecondary/reports/2018/04/25/449937/college-accreditors-miss-mark-student-outcomes/.
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The Department believes that, regardless of the historical role
that accrediting agencies have played, or the institutions that
comprise the membership of a given accrediting agency, each student is
entitled to an unbiased review of his or her academic record and
learning accomplishments when applying for transfer, employment, or
graduate school, and that no student should be disadvantaged because of
the geographic scope of an institution's accrediting agency.
Changes: None.
Comments: One commenter asserted that the proposed regulatory
change represents an unreasonable interpretation of HEA section
496(a)(1) and is, therefore, not in accordance with the APA, which
prohibits arbitrary and capricious changes to regulations, and is in
excess of statutory jurisdiction under 5 U.S.C. 706(2)(C). Another
commenter agreed that the proposed change does not adhere to the
statutory language and suggested that, if regional accrediting agencies
are not truly regional because of the manner in which they operate, and
are instead national, the Department should classify them as such.
Discussion: HEA section 496(a)(1) states that ``the accrediting
agency or association shall be a State, regional, or national agency or
association and shall demonstrate the ability and experience to operate
as an accrediting agency or association within the State, region, or
nationally, as appropriate.'' Section 602.11 specifies that the agency
must demonstrate that it conducts accrediting activities within a
State, if the agency is part of a State government; a region or group
of States chosen by the agency in which an agency provides
accreditation to a main campus, a branch campus, or an additional
location of an institution; or the United States (i.e., the agency has
accrediting activities in every State). However, the HEA does not
require the Department to consider the agency's historic footprint to
be part of its scope, which the Department has previously done through
regulation. Rather, the HEA refers to all accrediting agencies
recognized by the Secretary as ``nationally recognized'' without
reference to the number and location of States in which an agency
accredits institutions. See HEA section 101(a)(5).
We disagree that this change is arbitrary and capricious. To the
contrary, the Department believes this change is critically important
given the expansion of distance learning, which allows students to
attend an institution accredited by an agency whose geographic scope
does not include the student's home State. This can often lead to
confusion from students looking to contact their institution's
accrediting agency, only to find out that the accrediting agency claims
to not do business in their State. In addition, given the growth of
institutions that have additional locations and branch campuses across
the country, most accrediting agencies that originally accredited
institutions only in a well-defined and geographically proximate group
of States are now accrediting institutions in multiple States that are
outside of their historic footprint. The Department recognizes that
accrediting agencies previously described as ``regional'' are, in fact,
conducting business across much of the country. Therefore, the
Department seeks to realign its regulatory definitions with the statute
to distinguish among agencies that have activities in one State, some
or most States, and every State. As always, the Department uses the
definition of ``State'' in Sec. 600.2 for these purposes.
One non-Federal negotiator illustrated the need for this change
with a map showing all of the States in which her agency has
activities. The map (see Chart 2) revealed that the agency operates
across most of the country, with activities in 48 States including the
District of Columbia, as well as 163 ``international activities,'' even
though the agency was historically classified as a regional agency with
activities supposedly confined to 19 States. The Department's prior
classifications inaccurately describe where that agency performs its
work. To reduce confusion and to recognize that, in any given State,
there may be schools accredited by more than one accrediting agency,
the Department will require every accrediting agency to list the States
in which it performs accrediting activities. This list could include
one, some, most, or all States. However, the Department will align its
nomenclature more closely with the HEA by referring to all of the
agencies it recognizes as ``nationally recognized'' accrediting
agencies.
Although the historic distinction between regional and national
accrediting agencies is irrelevant given the expansion of many
accrediting agencies' work to States outside of their historical
footprint, there is a meaningful and clear distinction between
institutional agencies and programmatic agencies. The Department will
continue to recognize that distinction, including that a programmatic
accrediting agency could also be considered an institutional
accrediting agency if it accredits single-program institutions. We also
disagree that this change is outside of the Department's statutory
authority and believe instead that it is required of the Department to
more accurately describe the changing nature of accrediting agencies'
work. The Department will continue fulfilling its statutory
responsibility under 20 U.S.C. 1099b to recognize accrediting agencies
or associations and it will continue to require accrediting agencies to
publish a list of the States in which they perform their work.
The negotiating committee considered reclassifying some regional
accrediting agencies with broad geographic scope as national
accrediting agencies but did not achieve consensus on this approach.
Instead, consensus was achieved on relying upon statutory language that
refers to all accrediting agencies recognized by the Secretary as
nationally recognized agencies, and adhering to Sec. 602.11 by
requiring each accrediting agency to list the States in which it
performs accrediting activities.
Changes: None.
Accrediting Experience (Sec. 602.12)
Comments: One commenter was generally supportive of the proposed
changes in this section that provide additional flexibility to
accrediting agencies to accredit main campuses in States in which they
currently or may plan to accredit branch campuses or additional
locations. However, this commenter requested the Department require an
agency seeking an expansion of scope into an area where it does not
[[Page 58852]]
have prior experience to demonstrate in the application process the
ability and capacity necessary to justify and support such expanded
scope. Another commenter who was generally supportive of the proposed
changes in this section objected to the significant additional Federal
oversight, as it pertains to the number of institutions or programs
that a new agency or organization may accredit, and monitoring by the
Department of the agency's accrediting decisions.
Discussion: We appreciate the commenters' support for the change.
However, the Department will no longer consider the accrediting
agency's historical geographic footprint to be part of its scope.
Instead, the geographic area (i.e., list of States) in which the agency
performs its work must be reported to the Department and made available
to the public.
In instances in which an agency applies for a change of scope, the
regulations continue to require an agency to demonstrate in the
application process that it has the ability and capacity necessary to
carry out that expansion of scope. However, we also recognize that an
agency is not permitted to perform accrediting activities that are not
yet part of its scope, which makes it a violation of the Department's
regulations for an agency to gain experience doing something it is not
approved to do. Therefore, since an agency is unlikely to be able to
demonstrate experience in making accreditation or preaccreditation
decisions under the expanded scope at the time of its application or
review for an expansion of scope, the application may be reviewed to
determine the agency's capacity to make decisions under the expanded
scope. This provides an opportunity for an agency to gain experience
making accreditation decisions in the area of expanded scope, which the
Department may wish to limit to a small number of institutions or
programs until the agency can then demonstrate, through experience,
that it has the capacity to make additional decisions under the
expanded scope. The purpose of this regulatory change is to grant
limited authority for an agency that has the capacity to make decisions
under an expanded scope to make such decisions and acquire--and
demonstrate that it has acquired--experience doing so. Without these
changes, the Department's existing regulations could be interpreted to
contain circular logic (i.e., an agency cannot receive approval without
prior experience, but cannot obtain that experience without the
authority to do so). The Department will require monitoring reports to
assure progress toward demonstrating the necessary experience.
We do not agree that these regulations impose significant
additional Federal oversight pertaining to the number of institutions
or programs that a new agency can accredit and the monitoring of
accrediting decisions. It is the responsibility of the Department to
ensure that accrediting agencies are able to successfully determine the
quality of the institutions or programs it accredits, and it is wholly
appropriate to limit any potential risk until such time as the
Department is satisfied that the agency has demonstrated through
experience that it is capable of making those determinations.
Changes: None.
Comments: Several commenters objected to the removal of the
requirement that accrediting agencies seeking recognition demonstrate
two years of prior experience conducting accrediting activities, and
that they are trusted by peer organizations, practitioners, and other
stakeholders.
The commenters argued that the proposed change to require the
agency seeking recognition to cite at least one institution that uses
the agency as a gatekeeper for Federal dollars is not an effective
proxy for the current requirements. The commenters asserted that the
Department failed to explain or justify why it believes that simply
sharing an institution with an accrediting agency recognized as a
gatekeeper to Federal aid qualifies a brand-new agency to immediately
gain access to full gatekeeping authority.
One commenter wrote that the Department does not define what it
means to be ``affiliated,'' nor does it propose any meaningful criteria
to determine whether an accrediting agency is ``affiliated'' with a
recognized agency. The commenter added that the Department provided no
evidence of how difficult it has been for new accrediting agencies to
meet the two-year rule in the past, nor how many agencies have been
unable to obtain initial recognition as a result.
One commenter suggested changes to strengthen this provision,
including: Placing restrictions on new agencies that gain recognition
until they can demonstrate adequate experience and success in approving
and reviewing programs or institutions and demonstrate financial
stability, since an agency that is dependent on a small number of
institutions as its revenue base creates a moral hazard wherein the
agency has an incentive to maintain institutions among its membership
that might not meet quality standards while also having an incentive to
quickly approve new institutions to help build its financial base; a
shortened recognition period instead of the full five years; limits on
the number of institutions the agency can accredit; limits on growth in
enrollment among the institutions it accredits; and restrictions on the
ability to approve complex substantive changes such as change of
ownership or control.
Discussion: We disagree with the commenters who expressed concern
that requiring at least one institution that uses the agency as a
gatekeeper for Federal dollars is not an effective proxy for the
current requirements. This is the requirement of the current
regulations, so no changes were made to that requirement. The effect of
this regulation is to permit an accrediting agency that accredits an
institution that is also accredited by another accrediting agency that
serves as the Federal link for that agency to obtain recognition. This
is necessary to allow new agencies to gain recognition since
institutions that already have an established agency are unlikely to
change to a new accrediting agency until we recognize that agency.
We also disagree with the commenters' assertion that the regulation
would create a situation in which sharing an institution with an
accrediting agency recognized as a gatekeeper to Federal aid would
qualify a brand-new agency to immediately gain access to full
gatekeeping authority. First, an agency would not be ``sharing'' an
institution with another accrediting agency. Instead, an agency would
be seeking dual accreditation, while identifying one agency to serve as
its Federal gatekeeper, as our regulations require. As we explained in
our response to comments in Sec. 602.10, the significance of a Federal
link is that it provides a threshold minimal criterion to enable the
Department to consider recognizing an accrediting agency, but a Federal
link, in and of itself, does not ensure recognition, nor does it
guarantee that an institution may participate in title IV programs,
since other requirements also apply to such institutions. A Federal
link simply affirms that the agency's accreditation is, or could meet,
a required element in enabling at least one of the institutions or
programs it accredits to establish eligibility to participate in some
other Federal program.
The Department believes that the term ``affiliated'' is not
ambiguous and is commonly understood to mean closely associated with
another entity, typically in a dependent or subordinate position. The
Department interprets the term to mean an entity that is closely
associated with the recognized accrediting agency
[[Page 58853]]
seeking to establish a new accrediting agency.
As the Department noted during negotiated rulemaking, we do not
have evidence to demonstrate how difficult it has been for new
accrediting agencies to meet the two-year rule in the past, other than
that there have been very few new institutional accrediting agencies
recognized under the current regulations. New agencies face a difficult
situation in that, under the current regulations, they need to convince
an already-accredited institution to leave its established accrediting
agency in the hope that the new agency gets recognized. This adds
uncertainty that can harm students if their institution has any lapse
in its accreditation. Alternatively, the new agency would need to
identify institutions not already accredited to pursue accreditation
with the new agency. That could be seen as a sign of the new agency's
weakness since an institution new to accreditation is not likely to
have the resources and experience of traditional institutions that have
been accredited for many years. We cannot determine how many would-be
agencies do not apply because they cannot identify institutions that
are committed to using them for Federal gatekeeping purposes, as such
an agency would never apply for recognition. Therefore, we do not have
data to quantify how many agencies have been unable to obtain initial
recognition as a result. We believe the dearth of new agencies shows
that the barriers to entry for new accrediting agencies were so
significant that they discouraged new entrants. We hope that by
minimizing unnecessary barriers, new accrediting agencies will seek
recognition from the Department.
We appreciate the commenter's suggestions to strengthen the
regulation in this part. However, we believe that sufficient guardrails
and oversight are provided throughout these regulations, and
specifically within the procedures located at Sec. Sec. 602.31 and
602.32, as to render these additional limitations unnecessary. The
Department will continue to evaluate the agency's adherence to Federal
requirements, including its financial strength, the quality and
sufficiency of its staff, and its administrative capability.
Changes: None.
Comments: Many commenters expressed concern that the proposed
changes that permit recognized accrediting agencies to re-organize or
spin off a portion of their accrediting business by setting up a
separate agency present too much risk to Federal student aid dollars.
They recommended that the Department amend the proposed regulations to
more narrowly define the term ``is affiliated with or is a division
of'' as it is used in this section. One of these commenters suggested
that the definition require the new agency to have the same policies,
staff, and financial and administrative capability of the original
agency, or otherwise meet the requirement of two years accrediting
experience in its own right. Another commenter recommended that the
Department prohibit any new agency from ``spinning off'' of a
recognized agency if that recognized agency has had any compliance
issues during the last review period.
Discussion: As we discussed previously in this preamble, we use the
term ``affiliated'' to mean an entity that is closely associated with
the recognized accrediting agency seeking to establish a new
accrediting agency. We do not believe a narrower definition is
required, as this establishes the appropriate conditions for
consideration under this section.
We do not expect that permitting affiliated entities to leverage
the recognition of an accrediting agency will generate unacceptable
risk to Federal student aid. The affiliation provision only satisfies
the Federal link requirement for the new agency and does not provide an
accelerated path to recognition. The new agency would still be
responsible for satisfying the remaining requirements imposed by the
Department for recognition.
Similarly, we also do not believe it is necessary to prohibit any
new agency from ``spinning off'' of a recognized agency if that
recognized agency has had any compliance issues during the last review
period, since the new agency is responsible for satisfying the
requirements for recognition imposed by the Department.
We do not think it is appropriate to require an affiliated agency
to have the same policies, staff, and financial and administrative
capability. The reason for creating an affiliated agency is likely to
be based on the need to establish policies that differ in important
ways in order to meet the unique needs of a subset of postsecondary
institutions. Moreover, it may be impractical to expect the new agency
to use staff who are fully employed by another agency. The Department
would fully review, including whether they have sufficient staff to
fulfill their obligations.
The financial and administrative capability of the new agency is
required as part of its determination of recognition; therefore, the
new agency would be expected to be independently recognized as an
accrediting agency, which is more important than relying upon the
financial and administrative capability of the original agency. The
only advantage being provided to affiliated agencies is the waiver of
the requirement for two years of experience. All other standards for
recognition must be met.
Changes: None.
Comments: One commenter disagreed with the proposal to eliminate
the requirement that agencies seeking an expansion of scope provide
documentation of their experience in accordance with Sec. 602.12(b),
noting that the Department's explanation that cross-referenced sections
cover this is incorrect and not in compliance with the APA. Another
commenter stated that the rule will impede transparency in the
Department's recognition process. The commenter stated that if we only
included documents viewed on-site in the record if there were issues of
noncompliance, it would make it difficult for NACIQI to validate the
Department's determinations and ensure that the Department is
fulfilling its oversight responsibilities. This commenter also urged
the Department to include an on-site visit in addition to the document
production currently required and to make all document production,
review, and feedback of each accrediting agency public including those
held onsite.
Discussion: Section 602.32(j) requires agencies seeking an
expansion of scope to provide documentation of their experience that
satisfies the requirements of Sec. 602.12(b). We, therefore, disagree
with the commenter who opined that we eliminated these requirements and
violated the APA. We also disagree with the commenter who concluded
that excluding records that demonstrate compliance would make it
difficult for NACIQI to validate the Department's determinations and
ensure that the Department is fulfilling its oversight
responsibilities. While the NACIQI relies, in part, on the Department
staff's final analysis of the agency, it also considers other
information provided under Sec. 602.34(c). While under these
regulations staff will not be required to upload every document they
review, staff will be required to take notes regarding the review they
conduct and provide a representative sample of evidence they identify
to support their findings as part of their review. This evidence can be
collected by making copies, saving images, or uploading a sample of
documents reviewed.
Changes: None.
Comments: Several commenters opposed the proposed change to
[[Page 58854]]
Sec. 602.12(b)(2) that permits an agency that cannot demonstrate
experience in making accreditation or preaccreditation decisions under
the expanded scope at the time of its application or review for an
expansion of scope to do so with limitations on the number of
institutions or programs to which it may grant accreditation for a
limited period of time. The commenters recognized that such agencies
are also required under the proposed change to submit a monitoring
report regarding accreditation decisions made under the expanded scope.
One commenter requested that, if the Department proceeds with this
change, that the regulation specify the agency ``will'' be subject to a
limit of no more than five institutions or programs, within a specified
volume of Federal financial dollars (e.g., $10 million annually), until
they have completed a full recognition cycle and demonstrated that they
are effective assessors of quality. Another commenter suggested the
regulations include a required evaluation of the outcomes and actions
taken by the agency at other degree levels.
Discussion: We appreciate the commenters' input but believe that
the regulations as written sufficiently ensure that an agency that
demonstrates the capacity to administer an expanded scope, once
authorized to make decisions under that expanded scope, is given time
to also accumulate evidence of experience in doing so. The introduction
of the monitoring report is an important element in support of this
provision, as it provides the Department with an additional tool to
detect and address any deficiencies that may arise as an agency begins
to make decisions under the expanded scope. The regulation provides
that the Department may limit the number of institutions or programs to
which an accrediting agency may grant accreditation under the expanded
scope for a designated period of time, and we believe it is appropriate
to provide the Department with this discretion. The Department does not
have the statutory authority to limit the amount of Federal financial
aid dollars available to institutions or programs accredited by a
specific agency if the students enrolled at an institution or in a
program are qualified to receive Federal student aid.
We do not agree that it is necessary in this section of the
regulation to add a specific requirement that the Department conduct an
evaluation of the outcomes and actions taken by the agency at other
degree levels since such a review will automatically be part of the
Department's continuing oversight of the agency, including any
subsequent review for renewal of recognition.
Changes: None.
Comments: Some commenters expressed concern that lowering the
requirements for accrediting agencies to become recognized is likely to
have the unintended consequence of some agencies lowering their
standards in order to accredit more institutions and programs.
Discussion: We disagree that we have lowered the requirements for
recognition of accrediting agencies. While changes have been made to
allow for more competition and to address the need for innovation in
higher education, these changes do not diminish the rigor with which
the Department applies its standards during the recognition process,
nor do they diminish the rigor agencies apply to their accreditation of
institutions or programs. The Department does not anticipate recognized
accrediting agencies will lower their standards in order to accredit
more institutions and programs, as the reputation of an agency is
critical to its members and their students. As noted earlier, it is
still possible that an agency would lower standards to attract more
institutions. The Department notes, however, that even under the
current regulations an agency may lower its standards to attract or
retain more members, so these new regulations do not create a new risk
that does not already exist. Department staff and NACIQI monitor
agencies to determine whether they maintain rigorous and appropriate
standards that comply with the Department's regulations. The Department
believes these regulations will give staff more capacity and means to
do so. As many commenters have noted in response to our proposed
regulations, accrediting agencies rely upon the trust and confidence of
their peers and the community at large. The potential reputational
damage that would result from lowered standards is an existential
threat to an accrediting agency. In addition, if the standards no
longer meet the Department's requirements, the accrediting agency will
lose recognition by the Department.
Changes: None.
Comments: A couple of commenters objected to the Department's
characterization of the growing practice of elevating the level of the
credential required to satisfy occupational licensure requirements as
credential inflation. They disagreed that professions that require
graduate degrees may reduce opportunities for low-income students to
pursue careers in those occupations.
Discussion: We appreciate the perspective of these commenters and
acknowledge that, in many professions, the skills and knowledge
required to be successful in an increasingly complex world necessitate
graduate or professional education. However, we are also aware of
situations where the elevation of degree requirements for licensure or
employment is not predicated on a demonstrated inability for academic
institutions to meet the education and training demands of employers at
the current degree level, such as by modifying the curriculum, but on
other unrelated and pecuniary factors. Finally, while Federal student
aid fully supports graduate and professional education programs with
student loans, the Department is keenly aware of the disparate debt
burden some programs place on students whose personal circumstances
require them to fully finance the cost of their graduate or
professional education, without the assurance of commensurate wages to
service that debt. Graduate students, who commonly obtain Graduate PLUS
loans, are limited only to borrowing up to the cost of attendance less
any other financial aid. Therefore, they can accumulate far more
Federal student loan debt than undergraduate students. The Department
is concerned that, when credential requirements for a specific
occupation are elevated, employers will not necessarily increase wages
to account for the added cost of pursuing a higher-level credential.
Changes: None.
Acceptance of the Agency by Others (Sec. 602.13)
Comments: Several commenters objected to the decision to remove and
reserve this section, arguing that wide acceptance by one's peers is an
important criterion to ensure adequate oversight of institutions of
higher education. Commenters opined that this wide acceptance signals
the new agency is trusted by peer organizations, practitioners, and
other stakeholders.
Discussion: We appreciate the perspectives of these commenters;
however, as noted in the NPRM, we believe that the current provisions
of Sec. 602.13 duplicate requirements in other sections of the
regulations. Commenters should note that we incorporated elements of
Sec. 602.13 into the proposal for an initial application for
recognition. Proposed Sec. 602.32(b) requires an agency seeking
initial recognition to submit letters of support from accredited
institutions or programs, educators, or employers and practitioners,
explaining the role for such an agency and the reasons why they believe
the
[[Page 58855]]
Department should recognize the agency. The change effectively enhances
the wide acceptance requirement under Sec. 602.13 but applies it to
only those accrediting agencies seeking initial recognition. In
addition, under our current regulations, agencies are not required to
provide letters from other accrediting agencies as evidence of wide
acceptance. Some agencies have provided letters to demonstrate that
programmatic accrediting agencies accept institutional accreditation by
the agency as evidence of wide acceptance, but this is not required
under our current regulations.
Changes: None.
Comments: One commenter expressed concern that the regulations in
this section did not provide sufficient requirements for accrediting
agencies that serve as financial stewards for Federal student aid. The
commenter suggests that the Department impose, at a minimum, clear
numerical caps on the number of institutions and programs that the
agency may grant accreditation or preaccreditation for purposes of
title IV.
Discussion: Under current and proposed Sec. 602.36, the senior
Department official (SDO) has the authority to limit, suspend, or
terminate recognition of an agency if the NACIQI or Department staff
demonstrate that deficiencies exist with the agency's compliance in
meeting standards. For this reason, we do not believe it is necessary
to impose a clear numerical cap on the number of institutions or
programs that an agency may grant accreditation or preaccreditation for
purposes of title IV aid. The senior Department official will determine
if a limit is required and what that limit should be in the event that
such a restriction is warranted by the recommendations of staff or
NACIQI.
Changes: None.
Purpose and Organization (Sec. 602.14)
Comments: Two commenters expressed appreciation for the
Department's recognition that the joint use of personnel, services,
equipment, or facilities does not violate the ``separate and
independent'' requirement.
Discussion: We thank the commenters for their support.
Changes: None.
Comments: One commenter expressed support for the Department's
interest in ensuring compliance with the long-established statutory
requirement that accrediting agencies be ``separate and independent''
from any other institution, organization, or association. The commenter
noted that they have witnessed the influence of professional
associations on the standards established by accrediting agencies and
the impact of this influence on the creation of requirements
established by State licensure boards that quash innovation and new
professional entrants.
Discussion: We appreciate the commenter's support.
Changes: None.
Comments: One commenter recommended the Department revise this
section to better address conflicts of interest and strengthen the role
of public members. The commenter specifically suggested that we revise
the definition to prevent newly retired administrators or professors
from holding public commissioner positions; require all public
commissioners to have a 10-year ``cooling off'' period from when they
last worked primarily in higher education or owned equity in an
institution of higher education; prohibit individuals who previously
represented institutions on commissions from serving as public
commissioners; and expand the ban on what constitutes employment
connected to an institution in order to include individuals with any
association to higher education institutions or organizations, not just
individuals affiliated with the accrediting agency.
Discussion: We appreciate the commenter's concern that public
members of accrediting agency decision-making bodies may have conflicts
of interest that impede their ability to fully represent their
constituency. However, our experience with the recognized accrediting
agencies does not support the assertion that members of a decision-
making body are unable to fulfill their duties because of prior
employment or affiliation with a postsecondary institution. Indeed, the
opportunity to meaningfully contribute while serving as a member of a
decision-making body is enhanced with the specialized knowledge an
individual may have acquired while working in postsecondary education,
and each agency must establish and implement guidelines to avoid
conflicts of interest.
Changes: None.
Administrative and Fiscal Responsibilities (Sec. 602.15)
Comments: Two commenters objected to the proposed changes in this
section, suggesting that the changes to the required maintenance of
records will impede transparency and accountability. These commenters
argued that the absence of a record of the elements that informed the
agency's final decision will hamper the Department in fulfilling its
oversight responsibilities.
Discussion: We disagree that the absence of a record of the
elements that informed the agency's final decision will hamper the
Department in fulfilling its oversight responsibilities. The Department
is satisfied that the final decision documentation will provide
sufficient detail to assess the agency's actions.
Changes: None.
Comments: One commenter recommended revising Sec. 602.15(a)(4) to
provide for single-purpose institutions that prepare students for a
wide variety of career and professions, to read, ``Educators,
practitioners, and/or employers on its evaluation, policy, and
decision-making bodies, if the agency accredits programs or single-
purpose institutions that prepare students primarily for a specific
profession.''
Discussion: We do not believe the suggested change substantively
improves the regulatory language. Graduates of single-purpose
institutions may pursue a variety of careers and professions.
We also recognize that, while some programmatic accrediting
agencies may accredit programs that prepare individuals for particular
jobs, others might accredit programs that focus on unique curricular
requirements or pedagogical practices, or that are based upon a shared
set of underlying philosophical or religious beliefs. Such an agency
might also accredit programs based on a shared set of scientific
principles or educational standards. As such, an employer or a
practitioner may not be able to provide feedback based on the way the
program prepares individuals to perform a specific job function, but
instead on the way that the program impacts other aspects of the
person's contributions to the workplace more generally, including how
graduates approach their work and solve problems.
Changes: None.
Comments: Two commenters requested that we clarify that the
inclusion of students on decision-making bodies and employers on
evaluation, policy, and decision-making bodies is optional.
Discussion: Section 602.15(a)(4) provides that the agency will
include ``Educators, practitioners, and/or employers on its evaluation,
policy, and decision-making bodies, if the agency accredits programs or
single-purpose institutions that prepare students for a specific
profession.'' The agency may have one or more of these roles
represented, but they are not required to have all of these roles
represented on its
[[Page 58856]]
evaluation, policy, and decision-making bodies.
Section 602.16(a)(5) provides that the agency will include
``Representatives of the public, which may include students, on all
decision-making bodies.'' The agency may include a student or students
as public representatives as members of their decision-making bodies,
but we do not require them to do so.
Changes: None.
Comments: One commenter recommended that we delete the phrase
``which may include students'' from the provision of Sec. 602.15(a)(5)
that includes members of the public on decision-making bodies. The
commenter recommended that we explicitly note the possible inclusion of
students in these roles in the accompanying handbook or guidelines. The
commenter noted that, if subsequent experience shows that problems have
materialized as a result of the presence of students, we can more
easily modify the handbook or guidelines.
Discussion: We appreciate the commenter's concern that students may
not be well-suited to the work of an accrediting agency's decision-
making body, but the regulation does not require an agency to include a
student as a member of the public. The intention of this regulatory
provision is to recognize that, as entities that serve the interests of
students by assuring the quality of postsecondary institutions, student
perspectives should be represented. However, we also recognize that
many, if not all, members of accrediting agency decision-making bodies
consistently consider the needs of students. We note that agencies are
free to include (or not include) students both before and after the
effectiveness of this regulation. Students, like all members of agency
decision-making bodies, must avoid conflicts of interest and adhere to
other Department and agency requirements.
Changes: None.
Comments: Two commenters requested that we modify Sec.
602.15(b)(2) that requires the agency to maintain complete and accurate
records of ``all decision letters issued by the agency regarding the
accreditation and preaccreditation of any institution or program and
any substantive changes.'' The commenters suggested that we add a
sentence to provide that this requirement would not apply to decision
letters sent to institutions that are no longer in existence or
accredited by the agency.
Discussion: We appreciate the commenters' request, but note that,
while it would likely be uncommon, a situation could arise that would
necessitate the review of decision letters sent to institutions or
programs that are no longer in existence or accredited by the agency.
Changes: None.
Accreditation and Preaccreditation Standards (Sec. 602.16)
Comments: One commenter stated that it would not be possible for an
agency to effectively address the quality of an institution or program,
as required by proposed Sec. 602.16(a), if the agency were prohibited
from considering the impact of religious-based policies. The commenter
suggested that such a provision gives too much deference to
institutions; a religious institution can violate almost any
accreditation standard so long as it justifies it with its religious
mission. The commenter noted that the HEA, 20 U.S.C. 1099b(a)(4)(A),
requires respect of all missions throughout the accreditation process
and opines that the regulation appears to single out institutions with
religious missions for special treatment. Additionally, the commenter
suggested that the proposed regulatory language ``does not treat as a
negative factor'' appears to go further than the term ``respect'' used
in the statute.
Discussion: We appreciate the comment. In light of the United
States Supreme Court decision in Trinity Lutheran Church of Columbia,
Inc. v. Comer, and the United States Attorney General's October 7, 2017
Memorandum on Federal Law Protections for Religious Liberty pursuant to
Executive Order 13798, the Department believes that it must provide
more robust protection for faith-based institutions in situations in
which their ability to participate in Federal student aid programs may
be curtailed due to their religious mission. Allowing accrediting
agencies to make negative decisions because of the exercise of religion
could easily violate the Free Exercise Clause of the United States
Constitution. While the HEA requires accrediting agencies to respect
the missions of all institutions, the HEA singled out the need for
accrediting agencies to respect religious missions, thereby emphasizing
the need for particular attention to be paid to the rights of faith-
based institutions. In addition to the HEA, the Constitution protects
religious missions in ways that other institutional missions are not
protected. Simply requiring accrediting agencies to respect religious
mission does not go far enough to ensure that faith-based institutions'
Constitutional rights are protected. In addition, the Department feels
the need to clarify that respecting a religious mission includes not
considering an institution's policies or practices related to the
tenets of its faith--which could include curricular requirements,
hiring practices, conduct codes, and other aspects of student life and
learning--as a negative factor in making an accreditation decision. In
order to avoid Constitutional concerns or violations, the Department
believes it is advisable to protect institutions' religious missions in
the accreditation process, and that doing so includes not treating a
policy or practice based on the religious mission as a negative factor,
even if that policy or practice differs from particular points of view
or priorities. The need to provide this protection has become apparent
in several instances, including when the accreditation of faith-based
universities has been publicly questioned by accrediting agencies due
to their long-held institutional stances with a religious basis that
have lost favor in academia and potentially the public at large.\11\
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\11\ www.christianpost.com/news/christian-college-says-accrediting-agencys-proposed-guideline-change-may-harm-religious-schools.html; https://www.empirestatetribune.com/est/campus/celina-durgin/03/03/2015/gordon-college-faces-potential-loss-of-accreditation-due-to-homosexuality-policy.
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In addition, under RFRA the government may only substantially
burden a person's exercise of religion if the application of that
burden to the person is the least restrictive means of furthering a
compelling governmental interest.
Where an accreditation decision does not respect the religious
mission of an institution or uses as a negative factor an institution's
religious mission-based policies, decisions, and practices in the areas
covered by Sec. 602.16(a)(1)(ii), (iii), (iv), (vi), and (vii), the
religious institution's exercise of religion could be substantially
burdened. Furthermore, removing Federal aid would not be the least
restrictive means of furthering a compelling governmental interest, as
long as the agency can require that the institution's or program's
curricula include all core components required by the agency.
Thus, agencies must ensure that they do not use exercise of
religion as a negative factor in their decision making.
Changes: None.
Comments: One commenter expressed concern that the inclusion of the
phrase, ``consideration of State licensing examinations, course
completion, and job placement rates'' in Sec. 602.16(a)(1)(i) imposes
a vocational or occupational goal on postsecondary education. The
commenter noted that, without in any way minimizing the importance of
postsecondary education which does
[[Page 58857]]
focus on vocational and occupational outcomes, it is important to
preserve that aspect of higher education that is centered on the
transformation of the individual, on scholarship, and the development
of the mind. The commenter requested that we include an explicit
statement in the regulations to the effect that accrediting agencies
may use indicators and expectations that are appropriate to the field
of study, and that need not be quantitative in nature.
Discussion: The language referenced by the commenter is part of the
current regulations and makes clear that the use of these quantitative
indicators is at the discretion of the agency, to be used only as
appropriate. We did not propose changes to this language in the NPRM
and are not making changes in these final regulations. We do not agree
that we need an explicit statement in the regulations to the effect
that accrediting agencies may use indicators and expectations that are
appropriate to the field of study, as this is already permitted under
the regulations. In addition, the regulations already permit an agency
to rely upon qualitative indicators, or a mixture of qualitative and
quantitative indicators, to evaluate an institution or program relative
to its mission.
Changes: None.
Comments: Several commenters objected to this section of the
regulations. One opined that only a well-rounded education, replete
with the sciences, social sciences, humanities, and arts, can ensure
that students are prepared not just to become members of the workforce,
but also active and critical citizens of our Nation. Another offered
that academic institutions need to have one set of consistent
accreditation standards across all academic programs offered by the
institution--arts, sciences, and humanities, as well as career-
technical education. The commenter stated that individual employer
training programs are outside the scope of an academic institution's
core programs, and should be funded by employers, not title IV funds,
adding that career and technical education is broader than an
individual employer's training program and qualifies students for
gainful employment with a variety of employers.
Discussion: We appreciate the commenters ideas on a well-rounded
education; however, we do note that occupational programs are at the
core of many traditional institutions. Occupational majors such as
teacher education, nursing, and engineering continue to dominate
student enrollments at many institutions. We disagree that our
regulations imply that preparing for a specific occupation is the only
goal of postsecondary education. Nonetheless, the Department of
Education Organization Act of 1979 (Pub. L. 96-88 \12\) prohibits the
Department from exercising any direction, supervision, or control over
the curriculum, program of instruction, administration, or personnel of
an educational institution, accrediting agency, or association.
---------------------------------------------------------------------------
\12\ https://legcounsel.house.gov/Comps/Department%20Of%20Education%20Organization%20Act.pdf.
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Changes: None.
Comments: Several commenters requested that the Department provide
clarifying examples of ``clear expectations'' as referenced in Sec.
602.16(a)(1). One commenter opined that ``clear expectations'' is not
equivalent to the concept of effective application of standards and, as
such, is inconsistent with the requirement in HEA section 496, 20
U.S.C. 1099b, that the Secretary is responsible for determining that an
accrediting agency or association has failed to apply effectively the
criteria. Another commenter noted that, as written, the regulations
could cause undue burden to the agency if it is interpreted to require
the establishment of quantitative standards for faculty and fiscal
capacity, among other elements, that would take away flexibility of the
program and institution, depending on their mission and goals.
Discussion: ``Clear expectations'' means that an agency must be
direct and precise in communicating what requirements an institution or
program must meet in order for the agency to make the determination
that the institution or program is of sufficient quality to become
accredited or maintain its accredited status. This does not mean that
an accrediting agency must establish bright-line standards or require
all institutions or programs to achieve the same quantitative results.
It also does not preclude the use of qualitative standards for
evaluating quality. Instead, it means that an accrediting agency must
explain the criteria upon which it will make a determination that an
institution is or is not providing instruction of sufficient quality.
We do not believe that the use of ``clear expectations'' is
inconsistent with the HEA; rather, we think it is far more consistent
with the requirement that agencies assess institutional quality by
reviewing a number of specific factors related to program design,
instructional resources, and educational facilities. We believe that
the prior regulations were insufficient because it was not clear what
it meant to ``address'' quality.
The Department does not agree that this provision increases burden
on accrediting agencies, as the new regulations do not require the
establishment of quantitative standards for faculty and fiscal
capacity, nor do they disallow the use of qualitative measures to make
a quality determination. While it is possible that an agency may wish
to revise its policies and standards as a result of these regulatory
changes and clarifications, which could impose a level of burden, it is
not required. In some cases, accrediting agencies may wish to revise
their standards to make them clearer, which may cause a short-term
burden, but doing so may alleviate confusion that would, over the long
run, be even more burdensome.
Changes: None.
Comments: One commenter expressed support for the proposed changes
to Sec. 602.16(a)(2), as they provide alternative pathways for
institutional Federal financial aid eligibility. Another commenter
expressed support for the provisions in Sec. 602.16(a)(2)(ii) that
make clear that, after the five-year limit on preaccreditation has
expired, an agency must make a final accreditation action and must not
place an institution or program on another type of temporary status.
Two commenters expressed support for the regulations proposed at Sec.
602.16(d)(1). One commenter noted that they provide alternative
pathways for institutional Federal financial aid eligibility. One
commenter appreciated that the regulations require accrediting agencies
to clearly define ``direct assessment'' and be ready to evaluate it
before they can accredit such programs.
Discussion: We appreciate the commenters' support.
Changes: None.
Comments: Two commenters objected to proposed Sec. 602.16(d)(1).
One commenter objected to the fact that the agency conducts an
evaluation of the quality of institutions or programs. The commenter
asserted that it is the faculty who have the expertise to make a
judgment on the curriculum--and that expertise comes not only from
within the discipline seeking to institute a new course, but
inclusively from across the institution so that a wide perspective is
provided for the quality and viability of the course or courses in
question. The other commenter opined that the addition of direct
assessment will increase credential inflation.
Discussion: We appreciate the first commenter's point of view;
however,
[[Page 58858]]
accrediting agencies are responsible for evaluating the academic
quality of the programs or institutions they accredit. A key purpose of
accreditation is to provide third-party verification of institutional
or programmatic quality so, while the faculty may establish the
curriculum, it is up to the accrediting agency to verify that it meets
the standards put forth by the agency. In this section of the
regulations, we are only amending the language to include a reference
to direct assessment education, in addition to distance education and
correspondence courses. We disagree with the commenter who opined that
direct assessment programs would lead to credential inflation. Direct
assessment programs directly measure student knowledge and learning,
and have no direct bearing on the level of the credential a student
earns. The credential associated with the program that considers direct
assessment of student learning is determined by other factors.
Changes: None.
Comments: One commenter supported the provisions in Sec. 602.16(f)
that would permit accrediting agencies to establish alternative
standards for approval of curriculum. The commenter noted that this
change would enable institutions to better address the needs of
employers and help students to meet the educational requirements of
professional credentialing or licensing boards of their chosen
profession.
Discussion: We appreciate the commenter's support.
Changes: None.
Comments: Two commenters objected to the provisions in Sec.
602.16(f) that would permit accrediting agencies to establish
alternative standards for approval of curriculum. One commenter argued
that this would undermine faculty governance and is an unlawful
incursion by the Department into matters of academic responsibility.
Another commenter expressed concern about these provisions and
requested clarification, noting it appeared that agencies would now be
required to establish a standard to allow for institutions to have a
separate curriculum approval process to support external entities
(e.g., industry advisory boards, credentialing/licensing boards,
employers) making decisions in this process and provide documentation
to meet this criterion. The commenter observed that we do not restrict
agencies from allowing institutions to have a separate curriculum
approval process but said that it was unclear if separate approvals for
external entities (e.g., employers) would now be required with this
proposed provision. The commenter asked, if this was the case, what the
expectations are for documenting the standards established for those
external entities. The second commenter opined that the regulation
would result in the emergence of low-level industry-based accrediting
standards.
Discussion: The commenters correctly noted that Sec. 602.16(f)
would permit accrediting agencies to establish alternative standards
for approval of curriculum. We would not require accrediting agencies
to establish a standard to allow for institutions to have a separate
curriculum approval process for a program that typically leads to a
specific occupation; rather, these regulations allow for the
development of such standards. The Department declines to establish new
requirements for documenting alternative standards, because we believe
that accrediting agencies are already required to document their
standards and to retain documents supporting all final decisions.
We do not expect these regulations will result in the emergence of
low-level, industry-based accrediting standards, as we have not
diminished the rigor with which the Department applies its standards
during the recognition process, nor have we diminished the rigor
agencies must apply to their accreditation of institutions or programs.
To the contrary, we believe that the involvement of employers could
have the opposite impact of strengthening the curriculum and increasing
program rigor. As many commenters noted in response to our proposed
regulations, accrediting agencies rely upon the trust and confidence of
their peers and the community at large. The potential reputational
damage that would result from lowered standards is an existential
threat to an accrediting agency.
Changes: None.
Comments: Several commenters objected to the provisions in Sec.
602.16(f)(4) that would permit accrediting agencies to maintain
separate faculty standards for dual enrollment programs. The commenters
noted that parity between dual enrollment programs and college courses
is very important in order to avoid the perception that dual enrollment
programs are ``lesser versions'' of college courses and to facilitate
the transfer of credit. One group of commenters representing a rural
institution noted that they have always firmly used the same
credentialing and qualification standards for faculty teaching
``regular'' courses and those teaching ``dual enrollment'' courses, as
they believe that is important for maintaining quality and rigor.
Discussion: We appreciate the commenters' concerns; however, as
noted in the NPRM, the Department does not believe an agency should
have to choose between setting rigorous standards for faculty that may
be appropriate, for example, at comprehensive or research institutions,
and providing students with the best opportunities possible, including
in rural locations where faculty with specific kinds of degrees are not
plentiful.
In addition, the Department recognizes that, in many instances,
high schools provide dual enrollment programs at their location due to
unreasonable travel distances to a local college. In those instances,
the high school teacher may have a different kind of academic
credential but may have years of experience teaching college-level
courses that are relevant to the dual enrollment opportunity. Also, the
credential of choice may be very different for career and technical
education instructors, where workforce experience may be far more
important than the academic credential an instructor holds.
Changes: The amendatory language in the NPRM added a new paragraph
(b), and we should have redesignated all of the paragraphs that
followed. Current paragraphs (d), (e), and (f) should have been
redesignated as paragraphs (e), (f), and (g). We have revised the
amendatory language to contain the correct numbering. We also include
in the amendatory language Sec. 602.16(g)(4) that was inadvertently
omitted from the NPRM. This paragraph provides that agencies are not
prohibited from having separate faculty standards for instructors
teaching courses within a dual or concurrent enrollment program, as
defined in 20 U.S.C. 7801, or career and technical education courses,
as long as the instructors, in the agency's judgment, are qualified by
education or work experience for that role.
Application of Standards in Reaching an Accrediting Decision (Sec.
602.17)
Comments: One commenter opposed the changes to Sec. 602.17,
arguing that the Department has made the requirements an agency must
meet when applying its standards to accreditation decisions less
rigorous. The commenter argued that the Department has failed to
provide adequate justification for the proposed changes.
Discussion: These regulations remain largely unchanged with respect
to the requirements an agency must meet
[[Page 58859]]
when applying its standards to accreditation decisions. We are revising
the requirements of Sec. 602.17(a)(3) to provide for the consideration
of academic standards that are equivalent to those that are commonly
accepted to facilitate the implementation and evaluation of pilot
programs. The negotiators recognized that flexibility was required to
allow agencies to consider their standards through a lens that fosters
innovation, and we reiterate that this alternative approach is not a
less rigorous approach.
Changes: None.
Comments: Two commenters expressed support for changes in Sec.
602.17(a)(2) that require accrediting agencies to evaluate institutions
at the institutional-level and at the individual program level. One of
these commenters requested additional guidance concerning the
Department's expectations for institutional accrediting agencies
conducting evaluations at the program level. The commenter expressed
concern that conflicts could arise due to competing interests if both
an institutional accrediting agency and a programmatic or specialized
accrediting agency review programs.
Several commenters objected to the proposed changes in Sec.
602.17(a)(2), arguing that the individual review of programs is not
within the purview of institutional accrediting agencies. One commenter
noted that institutional accrediting agencies look at each institution
as a whole on an array of measures, such as financial stability,
planning, and academic and related programs, including program review
policies and implementation. The commenter stated that these agencies
generally do not review individual programs unless something is called
to their attention that affects existing standards. Two commenters
wrote that this requirement would duplicate and confuse the
institutional accrediting agencies' work with that of programmatic and
specialized accrediting agencies, increasing the regulatory burden on
accrediting agencies and institutions. One commenter requested
clarification of the requirements and expectations for each type of
agency, especially when a program holds an accreditation status with a
programmatic accrediting agency.
Discussion: We expect institutional accrediting agencies to
demonstrate that they have established and use procedures for
evaluating the quality of academic programs at an institution in
accordance with these regulatory provisions. This is not a new
requirement, as institutional accrediting agencies have always been
responsible for evaluating the quality of the programs offered by the
institutions it accredits. However, this does not mean that the agency
must perform an in-depth review of every program offered by the
institution. In general, an institutional accrediting agency should be
aware of the programs offered by the institution and should make sure
the institution has policies and practices in place to ensure that, in
general, the academic programs offered meet the agency's quality
standards. It is hard to imagine, in fact, how an accrediting agency
could fulfill its obligation to ensure instructional or academic
quality without engaging in a more detailed review of one or more of
the institution's programs. Institutions are composed of academic
programs and only through a review of those programs will an
accrediting agency be able to determine whether an institution's
policies regarding academic quality are effective in ensuring academic
quality and rigor.
An accrediting agency may use sampling or other methods in the
evaluation to comply with these requirements. An agency may also use
the accreditation by a recognized programmatic accrediting agency to
demonstrate the evaluation of the educational quality of such programs.
If conflicts arise between an institutional accrediting agency and
a programmatic accrediting agency for a particular program, we would
expect the institutional accrediting agency to consider the
determination of quality made by the programmatic accrediting agency,
as it possesses subject matter expertise. This reliance on programmatic
accrediting agency's expertise mitigates duplication of effort, while
providing an opportunity for collaboration and cohesion in an agency's
independent assessment of program quality.
Changes: None.
Comments: One commenter suggested there is inconsistency between
the requirements in Sec. 602.17(a)(2) and (b). Section 602.17(a)(2)
requires accrediting agencies to evaluate student achievement and
program outcomes at the institutional and programmatic level, while
Sec. 602.17(b) permits accrediting agencies to use an institution's
and program's self-study process to assess the institution's or
program's education quality and success in meeting its mission and
objectives, highlight opportunities for improvement, and include a plan
for making those improvements. The commenter argued that there is
significant research \13\ that one can objectively measure student
achievement and outcomes, and that metrics and rubrics can validate
that an institution and its academic programs are high quality and that
institutions are properly measuring student achievement.
---------------------------------------------------------------------------
\13\ Palomba, C., and Banta, T., ``The Essentials of Successful
Assessment'' in Assessment Essentials: Planning, Implementing, and
Improving Assessment in Higher Education, Jossey-Bass, 1999; Suskie,
L., ``Assessing Student Learning: A Common Sense Guide,'' Anker
Publishing, 2004; and learningoutcomesassessment.org.
---------------------------------------------------------------------------
Discussion: The Department disagrees that the requirements in Sec.
602.17(a)(2) and (b) are inconsistent. The requirements are
complementary, as they require an agency to evaluate whether an
institution or, in the case of a programmatic accrediting agency, a
program is achieving its stated objectives, and require the institution
or program to conduct a self-study to assess its educational quality
and success in meeting its mission and objectives, highlight its
opportunities for improvement, and develop a plan for making those
improvements. Nothing in the regulations precludes an agency,
institution, or program from using objective measures.
Changes: None.
Comments: One commenter supported the changes in Sec. 602.17(a)(3)
that allow institutions to maintain requirements that ``at least
conform to commonly accepted academic standards, or the equivalent,
including pilot programs.'' The commenter noted that this provides
institutions with the flexibility to pilot innovative, experimental
programs while at the same time protecting consumers and maintaining
educational quality.
Discussion: We appreciate the commenter's support.
Changes: None.
Comments: One commenter opposed the changes to Sec. 602.17(a)(3)
that would allow accreditation agencies to maintain degree and
certificate requirements that at least conform to commonly accepted
academic standards ``or the equivalent, including pilot programs in
Sec. [thinsp]602.18(b).'' The commenter stated that the Department has
not provided examples or data to support the claim that currently
institutions are resisting meaningful innovations that could benefit
students and their fields, or an analysis of what the actual barriers
are to enacting innovations when they are supported by faculty who
teach in those fields. Another commenter suggested the Department
create a probationary process for those institutions that propose an
innovation to produce
[[Page 58860]]
outcomes more effectively or efficiently, during which they make a case
for those innovations, try them out, and implement what works.
Discussion: The Department has received input from several
institutions that support the claim that commonly accepted academic
standards can be an impediment to innovation. For example, an
institution interested in moving to three-year baccalaureate degree
programs is concerned that, although the same learning objectives may
be met as in a four-year degree program, the three-year degree is not a
commonly accepted academic standard. As the commenter above stated, the
changes to this section of the regulations provide institutions with
the flexibility to pilot innovative, experimental programs while at the
same time protecting consumers and maintaining educational quality.
The creation of a probationary process for institutions that
propose an innovation to produce outcomes more effectively or
efficiently, during which they make a case for those innovations, try
them out, and implement what works falls within the purview of the
accreditation agencies, and not the Department.
Changes: None.
Comments: One commenter objected to the phrase in Sec. 602.17(b)
that reads, ``highlights opportunities for improvement, and includes a
plan for making these improvements.'' The commenter suggested that this
proposal is highly unworkable, because improvement in teaching and
learning at the postsecondary level is rare, and that we should remove
this language from the regulation.
Discussion: We disagree with the commenter's assertion that
improvement in teaching and learning at the postsecondary level is
rare. The Academy of Arts & Sciences' report on Policies and Practices
to Support Undergraduate Teaching Improvement 14 notes that
``advances in the learning sciences are providing new insights into how
students learn, and the ways in which teaching can support that
learning. The main challenges are putting that knowledge in the hands
of the faculty who teach undergraduates and providing them with the
incentives and necessary support to use it.'' We agree that
improvements in teaching and learning are challenging but also note
that colleges and universities across the Nation expend significant
efforts in this area.15 16 17 18 These regulations seek to
encourage continued progress.
---------------------------------------------------------------------------
\14\ amacad.org/publication/policies-and-practices-support-undergraduate-teaching-improvement.
\15\ acue.org/wp-content/uploads/2018/07/ACUE-White-Paper1.pdf.
\16\ Blackburn, R.T., Bober, A., O'Donnell, C., & Pellino, G.
(1980). Project for faculty development program education: Final
report. Ann Arbor, MI: University of Michigan, Center for the Study
of Higher Education.
\17\ academicaffairs.arizona.edu/uali-effective-strategies.
\18\ insidehighered.com/blogs/higher-ed-gamma/strategies-improving-student-success.
---------------------------------------------------------------------------
Changes: None.
Comments: One commenter requested changes to Sec. 602.17(e) to
better emphasize congressional intent that third-party comments play an
important role in the accreditation process, not just ``information
substantiated'' by the accrediting associations. The commenter
expressed concern that associations of colleges and universities are
inclined to protect their members, and the interests of their members,
rather than act on the interests of students, taxpayers, and the
Federal government.
Discussion: We appreciate the commenter's request but note that we
have revised Sec. 602.17(e) only to ensure that the data the
accrediting agency considers are valid. We made no changes to the
third-party comment requirements in Sec. 602.23(b). Third-party
comments, along with any other information from other sources, will be
used to determine whether the institution or program complies with the
agency's standards. At the same time, we must ensure that institutions
maintain their due process rights and that allegations of misconduct or
illegal activity are not confused with proof of misconduct or illegal
actions through a final judgment by the courts.
Changes: None.
Comments: Several commenters wrote in support of the changes to
Sec. 602.17(g) that require an accrediting agency to demonstrate that
it requires institutions that offer distance education or
correspondence education to have processes in place to establish that a
student who registers for a distance education or correspondence
education course or program is the same student who participates and
completes the course or program and receives academic credit. The
commenters noted that removing the list of options for confirming
student identity provides institutions flexibility to find solutions
that fit the modality and content of the course and avoids obsolescence
due to outdated technology and processes. One commenter also supported
the requirement for notification of students of any additional charges
(fees, software, hardware) associated with identity verification at the
time of registration or enrollment.
Discussion: We appreciate the commenters' support.
Changes: None.
Comments: Some commenters expressed concern that the requirements
of Sec. 602.17(g) may incentivize profit-seeking entities to say that
they can accomplish verifying student identity for a fee. According to
the commenters, some of these entities have already asserted that test
proctoring as a means of verifying student identity would no longer be
acceptable because we did not include it in the proposed regulatory
language. The commenters noted that, while the proposed language is
clear, an additional sentence would assist institutional personnel in
understanding our intent: ``By removing the list of verification
methods, the Department does not imply that those techniques are
invalid or would not be acceptable in fulfilling the requirements of
this section.''
Discussion: We are revising Sec. 602.17, in part, to provide
greater flexibility to agencies in establishing requirements for
verifying student identity. We neither require nor encourage the use of
profit-seeking entities to comply with this provision. Additionally,
the regulations stand alone and do not require a comparison of
previously included text.
We believe the regulations, as some commenters noted, clearly state
the requirement and do not believe there is a need to state that the
removal of the list of verification methods means that institutions
could not continue to use such techniques. For example, while not
included on our list of potential verification methods, test proctoring
as a means of verifying student identity continues to be an acceptable
method. While we agree with the commenters that removing the list of
verification methods does not preclude an institution from continuing
to use those methods, we do not typically include information in our
regulations regarding what we are not regulating.
Changes: None.
Comments: One commenter requested that the Department revise Sec.
602.17(g) to require accrediting agencies to prove they have robust
systems to prevent what the commenter alleges to be widespread cheating
in hybrid and online courses. Another commenter asserted that the
proposed regulations are not sufficient to prevent student cheating,
which they assert is very easy to do, especially online. The commenter
stated that we should strengthen this
[[Page 58861]]
section to better control credential inflation associated with online
cheating.
Discussion: While we understand that many people assume that online
and hybrid courses are more susceptible to student cheating than brick-
and-mortar courses, a recent study \19\ found that, ``contrary to the
traditional views and the research literature, the surveyed students
tend to engage less in AD [academic dishonesty] in online courses than
in face-to-face courses.'' We do not believe there is a correlation
between online cheating and credential inflation and the commenter
provided no such evidence.
---------------------------------------------------------------------------
\19\ researchgate.net/publication/325249542_Predictors_of_Academic_Dishonesty_among_undergraduate_students_in_online_and_face-to-face_courses.
---------------------------------------------------------------------------
Changes: None.
Ensuring Consistency in Decision-Making (Sec. 602.18)
Comments: Two commenters supported the proposed changes in Sec.
602.18, writing that they provide flexibility for agencies in their
application and enforcement of accreditation standards, and strong
support for innovation in curriculum and instructional methods at
institutions that serve non-traditional students through online
instructional modalities.
Discussion: We appreciate the commenters' support.
Changes: None.
Comments: One commenter asserted that the changes proposed in Sec.
602.18 would weaken the expectation that accrediting agencies ensure
quality, create loopholes in enforcement of standards, and diminish the
Department's ability to take action against an agency that fails to act
when necessary.
Discussion: We disagree that the changes proposed in Sec. 602.18
would weaken the expectation that accrediting agencies ensure quality,
create loopholes in enforcement of standards, and diminish the
Department's ability to act against an agency that fails to provide
oversight when necessary. Indeed, the requirements in the section
explicitly state that agencies must consistently apply and enforce
standards. Moreover, while this section of the regulation applies
specifically to the actions of the agency, subparts C and D detail,
respectively, the requirements of the application and review process
for agency recognition by Department staff and Department
responsibilities, which continue to be rigorous and evidence based.
Changes: None.
Comments: One commenter requested that we revise Sec. 602.18(a) to
make explicit that ``consistent'' does not mean ``identical.''
Discussion: ''Consistent'' means free from variation or
contradiction, accordant, coherent, compatible, concordant, conformable
to, congruent, congruous, consonant, correspondent with or to,
harmonious, or nonconflicting,\20\ whereas ``identical'' means ``being
the same.'' \21\ We do not view these terms as interchangeable.
---------------------------------------------------------------------------
\20\ merriam-webster.com/dictionary/consistent.
\21\ merriam-webster.com/dictionary/identical.
---------------------------------------------------------------------------
Changes: None.
Comments: Two commenters supported the proposed changes to Sec.
602.18(c) that would allow for agencies to work with institutions and
programs to determine alternative means of satisfying standards and
procedures due to special circumstances or hardships. One commenter
appreciated the flexibility to find creative ways to report and comply
with expectations when under hardship. Another commenter appreciated
the Department's acknowledgement of the flexibility required to address
student hardships and support innovation without jeopardizing
recognition from the Department. The commenter is concerned, however,
that allowing a program to remain out of compliance for three years,
without any threat to its accreditation status, may allow for
substandard education and the potential for unfair treatment of
students to continue for an unreasonably long time. The commenter noted
that, given the wide range of examples of circumstances that are beyond
the control of an institution, from natural disasters to faculty
recruitment issues, the Department should ensure that this provision
continues to protect the interests of students, one of the primary
purposes of accreditation.
Discussion: We appreciate the commenters' support. We do not agree
that the provisions of this part will lead to substandard education and
the potential for unfair treatment of students to continue for an
unreasonably long time. When curricular changes are needed for an
institution to come into compliance with an agency's standards, it
could take years for those changes to be developed, approved, and
implemented, and for the positive effects of the new curriculum to be
observed in the outcomes of program graduates. Nothing requires an
accrediting agency to provide the full amount of time for an
institution to come into compliance, and the Department expects that
agencies would establish milestones that an institution must meet
during the improvement period, as required in Sec. 602.19(b). Under
current regulations, agencies can provide more than 12 months for an
institution to come into compliance by granting ``good cause''
extensions. The Department believes that accrediting agencies have the
experience and expertise to determine a reasonable time for an
institution to come into compliance based on the steps necessary to
come into compliance and the risk to students who continue to enroll
during the improvement period. The requirements in Sec. 602.18(b) are
precisely the guardrails necessary to protect students, even under
unforeseen circumstances. The goals and metrics required by this
provision under alternative standards must be equivalently rigorous to
standards applied under normal circumstances.
Changes: None.
Comments: One commenter contended that the changes proposed in
Sec. 602.18(b) would encourage credential inflation and education
expansion.
Discussion: We do not agree that the changes proposed in Sec.
602.18(b) would encourage credential inflation and education expansion.
The commenter attributed this potential risk to innovation; while we
hope that innovation increases access to education for students seeking
alternative postsecondary pathways, we do not associate that increase
with credential inflation.
Changes: None.
Comments: Several commenters objected to Sec. 602.18(b)(3), which
states that accrediting agencies may not use an institution's religious
mission-based policies, decisions, and practices in certain areas--
curricula; faculty; facilities, equipment, and supplies; student
support services; and recruiting and admissions practices--as a
``negative factor'' in assessing the institution. The commenters
asserted that this change elevates religious mission above other types
of institutional mission, which the HEA similarly protects (20 U.S.C.
1099b(a)(4)(A)). Commenters also contended that the Department has not
adequately justified these proposed changes. They noted that we
reported that we have not received any formal complaints about an
institution's negative treatment during the accreditation process
because of its adherence to a religious mission, nor have we provided
any data on the number of institutions and students these changes would
impact. Several commenters opined that the regulation
[[Page 58862]]
protects religious institutions that engage in discriminatory behavior.
Discussion: Section 602.18 currently requires that accrediting
agencies consistently apply and enforce standards that respect the
stated mission of the institution, including religious mission. In
light of the United States Supreme Court decision in Trinity Lutheran
Church of Columbia, Inc. v. Comer, and the United States Attorney
General's October 7, 2017 Memorandum on Federal Law Protections for
Religious Liberty pursuant to Executive Order 13798, the Department
believes that it must provide more robust protection for faith-based
institutions in situations in which their ability to participate in
Federal student aid programs may be curtailed due to accrediting agency
decisions related to an agency's disagreement with tenets of the
institution's faith-based mission, rather than actual insufficiencies
in the institution's quality or administrative capability. Allowing
accrediting agencies to make negative decisions because of the exercise
of religion could easily violate the Free Exercise Clause of the United
States Constitution. While the HEA requires accrediting agencies to
respect the missions of all institutions, the HEA particularly singled
out religious missions as something that agencies must respect, which
suggests that Congress had concerns that faith-based institutions would
be particularly vulnerable to negative accrediting agency decisions
based on philosophical differences rather than insufficiencies of
institutional quality or administrative capability. In addition to the
HEA, the Constitution protects religious missions in ways that it does
not protect other institutional missions. In order to avoid
Constitutional concerns or violations, the Department believes this
level of protection is appropriate regardless of whether there is a
history of formal, documented complaints. When institutions believe
that they have been treated unfairly based on their religious mission,
they may fear retribution for issuing a formal complaint to the agency
or the Department. However, in meetings with institutional leaders and
organizations that represent faith-based institutions, and in the case
of a recent proposed change in one agency's standards, it is clear to
us that there is a real threat of negative accrediting agency action
based on a philosophical disagreement In addition, under RFRA the
government may only substantially burden a person's exercise of
religion if the application of that burden to the person is the least
restrictive means of furthering a compelling governmental interest.
Where an accreditation decision uses as a negative factor an
institution's religious mission-based policies, decisions, and
practices in the areas covered by Sec. 602.16(a)(1)(ii), (iii), (iv),
(vi), and (vii), the religious institution's exercise of religion could
be substantially burdened. Furthermore, removing Federal aid would not
be the least restrictive means of furthering a compelling governmental
interest, as long as the agency can require that the institution's or
program's curricula include all core components required by the agency.
Thus, although the Department does not have data on the number of
institutions that we would consider to have a religious mission under
these regulations or know the number of students those institutions
serve, National Center for Educational Statistics, Fall Enrollment and
Number of Degree-Granting Postsecondary Institutions, by Control and
Religious Affiliation of Institution: Selected Years, 1980 Through 2016
(Aug. 2018) indicates that there were 881 faith-based institutions in
the fall of 2016 as reported by the institutions. Institutions will
continue to be subject to laws prohibiting discrimination, unless they
are otherwise exempt.
During rulemaking, one negotiator described the challenges that
medical schools have faced when students, the institutions that provide
medical education, or hospitals that provide medical residencies are
unwilling to engage in practices that run counter to their religious
beliefs or missions. Although agencies and institutions found a way to
ensure that students could complete their medical training without
violating their conscience or principles of their faith, there is no
assurance that other agencies will come to a similar compromise or that
other areas of conflict will be similarly resolved. These regulations
ensure that popular opinion does not prevail when in opposition to
tenets of faith at a faith-based institution, which is protected under
the Constitution from being penalized for its religious mission.
Changes: None.
Comments: One commenter encouraged the Department to make more
explicit that, when accrediting a program at a religiously affiliated
institution, the agency ensures that the program's curricula include
all core components required by the agency.
Discussion: We are confident that the regulations are sufficient to
make clear that a programmatic accrediting agency would ensure the
program's curricula includes all of the core components required by the
agency and, as appropriate, the licensing body for the profession for
which the program prepares graduates. However, in some instances a
program might partner with another institution that provides
instruction in areas that run counter to the principles of faith at a
faith-based institution. In other instances, a program might instruct
students about practices or beliefs without requiring that students
adopt those practices or beliefs.
Changes: None.
Comments: One commenter expressed concern that the Department will
be investigating accreditation practices as they relate to an
institution's mission, including religious mission. The commenter
wondered if, for example, this regulatory change is meant to ensure
that the Department will enforce the right of an Islamic institution to
seek accreditation from a Christian-based accrediting agency.
Discussion: The Secretary recognizes accrediting agencies to
accredit institutions within an agency's individual approved scope of
recognition. We do not require an accrediting agency to recognize an
institution outside its approved scope, and the statute prohibits us
from doing so for purposes of determining eligibility for Federal
programs. If a Christian-based accrediting agency limits its scope to
Christian institutions, we would not require it to accredit non-
Christian institutions; thus, we do not anticipate investigating
actions that are contrary to the defined scope of an agency.
Changes: None.
Comments: One commenter requested that we frame the change in Sec.
[thinsp]602.18(b)(6) in a way so that the public can have confidence
that an institution or program has met accreditation standards
throughout the full period that it claims accredited status. The
commenter is concerned that retroactive accreditation, as framed in the
proposed regulations, appears to enable an institution or program to
claim it was accredited at the beginning of candidacy or
preaccreditation status, even if it has not received a final
affirmative accreditation decision.
Discussion: We appreciate the commenter's concern and would not
want the regulations to be interpreted to mean that an institution
could claim retroactive accreditation effective at the point at which
an institution submits an application for accreditation or
preaccreditation status. It is our intention that the retroactivity
would be limited to the point in the actual preaccreditation or
accreditation process that resulted in an affirmative
[[Page 58863]]
decision that the institution or program is likely to succeed in its
pursuit of accreditation, which is what preaccreditation or candidacy
is intended to indicate. Thus, Sec. 602.18(b)(6)(ii) provides that
retroactive accreditation may not predate the agency's formal approval
of the institution or program for consideration in the agency's
accreditation or preaccreditation process.
We refer to the July 25, 2018 Memorandum \22\ that provides
guidance regarding retroactive establishment of the date of
accreditation. In accordance with a recommendation from the NACIQI, the
Department agreed to permit the retroactive application of a date of
accreditation, following an affirmative accreditation decision. Thus,
we are codifying the current practices of many agencies, which the
Department permitted prior to 2017 and once again permits.
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\22\ www2.ed.gov/admins/finaid/accred/retroactiveestablishmentofthedateofaccreditation72518.pdf.
---------------------------------------------------------------------------
We adopted this policy recognizing that some programmatic
accrediting agencies establish student enrollment or graduation
requirements that a program must achieve prior to rendering a final
accreditation decision for that program. This action is necessary to
ensure that students who enrolled during the accreditation review
period would be eligible for certain credentialing opportunities or
jobs upon completion of the program that was awarded accreditation
based on the quality of the program and the accreditation review that
took place during the time these students were enrolled. Without this
policy, no institution would want to put students in the position of
completing a program that will never enable those students to apply for
licensure or work in the field.
Changes: None.
Comments: Two commenters supported the changes in Sec. 602.18(c)
that establish several conditions for alternative standards or
extensions of time, including accrediting agency adoption, equivalent
goals and metrics, a demonstrated need for the alternative, and
assurance that it meets the intent of the original standard and does
not harm students. One commenter noted that the proposed language
includes enough guardrails and limitations to protect students, but
also notes the importance for the Department to be rigorous in the
oversight of any implementation of these provisions. One commenter
suggested that the regulation would be more consistent with statute if
we required agencies to report to the Department any actions involving
alternative standards or extensions of time. The commenter noted that
this could occur either at the time of recognition or annually, and in
a format that would make clear to the public all such instances.
Discussion: We appreciate the commenters' support. The Department
assures the commenters that it will be rigorous in the oversight of any
implementation of these provisions, including through the initial and
renewal of recognition review processes. As required by Sec. 602.31,
the Department will ensure that the agency complies with the criteria
for recognition listed in subpart B of this part by, among other
things, reviewing a copy of the agency's policies and procedures manual
and its accreditation standards, including any alternative standards it
has established. The agency will, in effect, provide the Department
with information about its alternative standards or extensions of time
through the documents it submits or that staff elect to review during
the recognition process. The Department does not currently track the
number of times agencies have provided good cause extensions under the
current regulations and does not plan to add a separate reporting
requirement as a result of these regulations. However, accrediting
agency policies and standards, as well as an agency's final
accreditation decisions and sanctions, are made available to the
public, including on the accrediting agency's website.
Changes: None.
Comments: Several commenters expressed concern that the changes
proposed in Sec. 602.18(c) that allow accrediting agencies to
establish ``alternative'' standards for programs identified as
``innovative'' have the potential to create a two-tiered system that
likely would result in lower standards in certain programs. The
commenters acknowledged that the Department's regulations must support
learning innovations like competency-based education (CBE). One
commenter noted that CBE enables their students to complete their
credentials and degrees more quickly, affordably, and with greater
relevancy to their career goals, inasmuch as they have a clearer
identification of the knowledge and skills sought by employers.
However, the commenter was concerned that, as written, the regulations
would create conditions in which an accrediting agency's seal of
approval would not be considered ``reliable'' or ``consistent'' as
required by law, and students in some programs would be subjected to
lower-quality curricula than students in other programs. The commenter
opined that truly innovative programs do not need to be propped up by
different agency standards in order to thrive; rather, this change
could encourage accrediting agencies to lower their standards and allow
programs out of compliance with the normal standards to still operate.
A group of commenters expressed concern that the changes to Sec.
602.18(c) would reduce institutional accountability, exposing students
and taxpayers to significant risk. The commenters recommended that the
Department specify the circumstances under which the alternative
standards may apply and create a process to verify that the alternative
is equivalent to the original standard.
Another commenter suggested that the term ``monitoring'' is too
vague to be meaningful.
Discussion: We do not believe that the ability to establish
alternate standards, or to establish alternate criteria for meeting a
standard or alternate metrics for evaluating compliance with a single
standard, will incentivize accrediting agencies to create a two-tiered
system that likely would result in lower standards in certain programs.
In some instances, the agency may elect to maintain a single standard,
but allow alternative ways for a particular institution or program to
meet that standard. Not only does the law require accrediting agencies
to be reliable and consistent, but as we stated previously, accrediting
agencies rely upon the trust and confidence of their peers and the
community at large. The potential reputational damage that would result
from lowered standards is an existential threat to an accrediting
agency. Moreover, the regulation requires the agency to apply
equivalent standards, policies, and procedures; a two-tiered system
would not fulfill this requirement.
The regulations include examples of the kinds of circumstances that
could warrant the establishment of alternative standards. We do not
believe it is reasonable for the Department to further specify the
circumstances under which the alternative standards may apply, as the
assumption is that some of these circumstances will be unanticipated
and unprecedented. We also do not believe it is necessary to create a
new process to verify that the alternative is equivalent to the
original standard. When the Department conducts a review of an agency's
standards, it will include any alternative standards that had been
established and will ensure those standards are sufficient to ensure
the quality of the institution.
[[Page 58864]]
We also disagree that the term ``monitoring'' is too vague to be
meaningful. To ``monitor'' means to observe, record, or detect.\23\
This is wholly consistent with the intention of the monitoring report.
---------------------------------------------------------------------------
\23\ dictionary.com/browse/monitored.
---------------------------------------------------------------------------
Changes: None.
Comments: One commenter asserted that the proposed changes in Sec.
602.18(c) violate the HEA and the APA. The commenter opined that the
use of the word ``consistently'' in the HEA means that the accrediting
agency must constantly adhere to the same standards and principles to
ensure that courses or programs offered are of enough quality to
achieve their stated objectives.
The commenter asserted that, because the regulations do not
delineate what would constitute ``special circumstances,'' accrediting
agencies are permitted to avoid statutory compliance. Similarly, the
commenter stated that, because the regulations do not specify what
``innovative program delivery approaches'' or ``undue hardship on
students'' mean, accrediting agencies would be able to avoid the
statutorily required ``consistency.''
The commenter objected to the provision that the agency's process
for establishing and applying the alternative standards, policies, and
procedures be set forth in its published accreditation manuals rather
than requiring the agency to publish its ``alternative'' standards or
make them available to the Department, State authorizers, or students.
The commenter concluded that these proposed changes are arbitrary and
capricious, not in accordance with law, and in excess of the
Department's statutory jurisdiction under section 706 of the APA.
Discussion: We agree with the commenter that the use of the word
``consistently'' in the HEA means that the accrediting agency must
constantly adhere to the same standards and principles to ensure that
courses or programs offered are of sufficient quality to achieve their
stated objectives. However, we do not agree that the establishment of
alternative standards, criteria, or metrics is inconsistent with the
intent of the statute. Rather, the regulations provide that an
accrediting agency can establish a second set of standards that it
consistently applies under the circumstances identified that
necessitated the creation of alternative standards. The agency would be
expected to apply the alternate standards fully and consistently in
each instance in which the alternate standard (or criterion or metric)
is indicated.
We do not agree that because the regulations do not exhaustively
enumerate what constitutes a ``special circumstance,'' ``innovative
program delivery approaches,'' or ``undue hardship on students,''
accrediting agencies can avoid statutory compliance. Nothing in these
regulations absolves an accrediting agency from its obligation to be a
reliable authority as to the quality of education or training offered
by the institutions it accredits.
We believe it is appropriate and adequate for the accrediting
agency to document its process for establishing and applying the
alternative standards, metrics, policies, and procedures in its
published accreditation manuals. These agencies make these manuals
available and they would, therefore, be available to the Department,
State authorizing agencies, or students.
As we have stated previously, we do not agree that the changes in
this part violate the HEA and the APA.
Changes: None.
Comments: One commenter requested that, in Sec. 602.18(c)(2), we
replace the word ``metrics'' with ``expectations.'' The commenter was
concerned that ``metrics'' implies a quantitative measure.
Discussion: We do not believe that ``expectations'' captures the
intention of word ``metrics'' in Sec. 602.18(c)(2). ``Metrics'' is
commonly understood to mean a standard for measuring or evaluating
something,\24\ while ``expectations'' generally refers to the act or
state of looking forward or anticipating or the degree of probability
that something will occur.\25\ Indeed, because this section of the
regulations refers to ``metrics'' in combination with ``goals,'' we
feel comfortable that an accrediting agency could set and apply
qualitative, quantitative, or a combination of qualitative and
quantitative measures.
---------------------------------------------------------------------------
\24\ https://www.merriam-webster.com/dictionary/metrics?src=search-dict-box.
\25\ https://www.merriam-webster.com/dictionary/expectations.
---------------------------------------------------------------------------
Changes: None.
Comments: One commenter requested that we clarify what ``undue
hardship on students'' under Sec. 602.18(d)(1)(v) means so that is it
not a blanket exception. The commenter asserted that the ``normal
application'' of an agency's standards should always be made in
students' interests, and that current and prospective students deserve
to know about any problems related to a provider's accreditation and
should not be used as an excuse for noncompliance.
Discussion: We have intentionally not enumerated what might
constitute ``undue hardship on students'' under Sec. 602.18(d)(1)(v)
in order to provide accrediting agencies latitude to apply their
judgment in the event of unforeseen circumstances. Moreover, we
strongly agree that an agency's standards should always be made in
students' interests. It is in keeping with this principle that we
determined students would be best served if accrediting agencies could
be responsive to institutional circumstances that necessitate the
application of alternative standards or metrics recognizing that these
standards or metrics would not and could not release the agency from
its duty to be a reliable authority as to the quality of education or
training offered by the institutions it accredits.
Changes: None.
Comments: One commenter requested that we revise Sec. 602.18(c)(4)
to require institutions to ask students to provide written informed
consent when they are participating in an innovative or alternative
approach to their education.
Discussion: We appreciate the commenter's request but believe that
it would be too burdensome to require institutions to ask students to
provide written informed consent when they are participating in an
innovative or alternative approach to their education. Moreover, Sec.
602.18(c)(4) applies to actions the accrediting agency will take to
ensure the institutions or programs seeking the application of
alternative standards have ensured students will receive equivalent
benefit and not be harmed through such application, so it is left to
the agency's discretion to require the institutions they accredit to
obtain consent from students to participate in an innovative or
alternative approach.
Changes: None.
Comments: Two commenters supported Sec. 602.18(d), noting that the
regulation provides accrediting agencies additional flexibility in
determining the length of time an institution or program may remain out
of compliance in cases where circumstances are beyond the institution's
or program's control. The commenters asserted that is a common-sense
change and can help protect the interests of students, provided it is
clear that these decisions are up to each accrediting agency and will
not leave agencies vulnerable to legal action if they determine an
extension is not appropriate. The commenters emphasized that it is up
to the Department to ensure agencies use this
[[Page 58865]]
flexibility judiciously and do not allow unwarranted extensions of
accreditation without compelling reason.
Discussion: We appreciate the commenters' support and reassert our
commitment to ensure agencies use this flexibility judiciously and do
not allow unwarranted extensions of accreditation without compelling
reason.
Changes: None.
Comments: Several commenters suggested that the changes proposed to
Sec. 602.18(d) will make it easier for failing institutions to remain
out of compliance with accrediting agency standards for a much longer
time without serious accountability, subjecting multiple cohorts of
students to subpar education. One commenter argued that we did not
provide clear evidence that necessitated the increase in the additional
time and number of years colleges can be out of compliance with
accrediting agency standards, and opined that this change would likely
exacerbate many of the issues facing students at the institution before
action is taken by the agency. The commenter suggests that, if the
Department were to extend this time frame, there should be stringent
consequences that would discourage an institution from continuing out
of compliance.
Discussion: We disagree that the changes to Sec. 602.18(d) will
make it easier for failing institutions to remain out of compliance
with accrediting agency standards for a much longer time without
serious accountability. The extension of time continues to be based
upon an accrediting agency's determination of good cause and requires
exceptional circumstances beyond the institution's control be present
that impede the institution's ability to come into compliance more
expeditiously. Moreover, the extension of time requires approval from
the agency's decision-making body, confidence on the part of the agency
that the institution will successfully come into compliance within the
defined time period, and, most importantly, that the decision will not
negatively impact students. We are confident that these provisions
appropriately balance the need for flexibility during unusual
circumstances and accountability to students who rely upon the
accrediting agencies' determination of educational quality. The
Department has seen multiple examples in which agencies have provided
extended time beyond 12 months for an institution or program to come
into compliance, especially during the recent recession when college
enrollments surged, and employment outcomes deteriorated. In some
instances, more time was required to improve educational outcomes,
either because new job opportunities had to open up, or the institution
had to substantially reduce enrollments in subsequent classes to adjust
to the reality that high unemployment rates reduced opportunities for
new college graduates, regardless of which institution they attended.
In other instances, colleges or universities facing economic hardships
have been given more than 12 months to execute planned giving campaigns
or to take other measures to control spending and balance their budget.
Still other institutions have been provided good cause extensions
beyond 12 months when significant issues of noncompliance or management
capacity are identified, since repairing facilities and replacing
management teams can require longer than 12 months to complete. In
recognition of circumstances such as these, the Department provides
additional regulatory flexibility, but expects agencies to use this
flexibility within defined parameters to ensure institutions or
programs come into compliance.
Changes: None.
Comments: Two commenters requested that we revise Sec. 602.18(d)
to address the expectations for how agencies must address noncompliance
with standards, including timelines, in only one criterion to avoid
confusion and conflicting terms. The commenters are seeking consistency
with Sec. 602.20(a)(2).
Discussion: We disagree that we should require consistency between
the timelines in Sec. Sec. 602.18(d) and 602.20(a)(2). The regulations
intentionally provide latitude to the accrediting agencies to establish
timelines that are reasonable and appropriate to their process and
procedures. Accrediting agencies may, and we expect most will, align
their timelines for addressing noncompliance with their standards, but
it is at their discretion to do so. Moreover, Sec. 602.18(d) contains
optional timelines for implementation, whereas Sec. 602.20(a)(2)
contains required implementation timelines. We note that the timeline
of three years used in Sec. 602.18(d) can be used congruently with the
enforcement timelines used in Sec. 602.20, which must not exceed the
lesser of four years or 150 percent of the length of the program (for a
programmatic agency) or the length of the longest program (for an
institutional agency). The timelines in Sec. 602.20 are used when an
agency finds an institution or program out of compliance with a
standard; whereas the timelines in Sec. 602.18 are used when an
institution or program works with an agency to address a circumstance
that precludes compliance with a specific standard.
Changes: None.
Comments: One commenter requested that we amend Sec.
602.18(d)(1)(i) to list the death of an institutional leader as an
example of a circumstance that would serve as a basis for a good cause
extension.
Discussion: We disagree that the death of an institutional leader
serves as an example of a circumstance that would serve as a basis for
a good cause extension since institutional governance procedures
require that an independent board of trustees make critical decisions
regarding the institution. As a result, the death of an institution's
leader should not result in an institution's inability to meet the
requirements of its accrediting agencies. In fact, it would be
inappropriate for an agency to opine on the appointment of senior
leaders by an institution as long as the institution followed its
policies and procedures for selecting a new leader, which could include
the appointment of that leader by a State or other governmental entity,
or potentially even the appointment of an institution's leader by
election. The Department notes that there are no specific requirements
in statute or regulations related to institutional governance. No
particular model of governance, such as shared governance or faculty
governance, is required. This is one model for administering an
institution, but not the only acceptable model.
In the case of private institutions, the governing board of the
institution is best able to make decisions about the appointment of
senior leaders. At public institutions, elected or appointed State
leaders often provide input into these decisions.
Changes: None.
Monitoring and Reevaluation of Accredited Institutions and Programs
(Sec. 602.19)
Comments: One commenter agreed with the provision in Sec.
602.19(e) that NACIQI should review an institution when that
institution's enrollment increases by 50 percent through distance
education or correspondence courses in one year. The commenter noted
that any enrollment change of this magnitude can place a significant
strain on an institution's administrative capability and ability to
maintain academic quality and rigor. Another commenter suggested that
the word ``effectively'' in Sec. 602.19(b) is undefined
[[Page 58866]]
and could result in the misapplication of this regulation. Another
commenter opined that Sec. 602.19(b) does not adequately address the
problem of monitoring, asserting that the membership associations have
consistently resisted taking full responsibility for monitoring and
oversight.
Discussion: While we appreciate the commenters' input regarding
these provisions, we note that the only changes made to the regulations
in this section were to update cross-references in Sec. 602.19(b) from
Sec. 602.16(f) to 602.16(g), and in Sec. 602.19(e) from Sec.
602.27(a)(5) to Sec. 602.27(a). There were no changes made to this
section regarding the review of institutions based on changes in
enrollments.
Changes: None.
Enforcement of Standards (Sec. 602.20)
Comments: One commenter supported the changes proposed in this
section, noting that, currently, Sec. 602.20 sets forth a virtually
inflexible process for agencies to address an institution or program
that is not in compliance with a standard. The commenter observed that
an agency must either immediately initiate adverse action or require
the institution or program to bring itself into compliance in
accordance with rigid deadlines. With the proposed changes, the
commenter noted that agencies would be required to provide an out-of-
compliance institution or program with a reasonable timeline to come
into compliance, and the timeline for compliance would consider the
institution's mission, the nature of the finding, and the educational
objectives of the institution or program. Another commenter who
supported these changes expressed appreciation for the added
flexibility for accrediting agencies in setting the length of time
institutions or programs must come into compliance if found to be in
noncompliance. This commenter noted that the change reflects the
reality that, in some circumstances, institutions are unable to come
into compliance under the current ``two-year'' rule.
Discussion: We thank the commenters for their support and agree
that in some instances, such as when an institution must undertake
significant curriculum reform to improve student outcomes, it could
take more than a year to implement the change. In particular, it can
take significant time to obtain approval of the new curriculum through
the faculty governance process. Once approved, the institution may need
to enroll and graduate new cohorts of students under that new
curriculum in order for the institution to fully demonstrate
compliance.
Changes: None.
Comments: Several commenters objected to the changes proposed in
this section, asserting that these changes would make it exceedingly
difficult for the Department to ever hold an accrediting agency
accountable. The commenters noted that current regulations already
allow failing institutions to continue to operate out of compliance
long past the current two- year deadline and few, if any, lose their
accreditation. These commenters are concerned that the proposed
flexibility to issue sanctions will make it almost impossible for
accrediting agencies to hold an institution accountable in a timely
manner. One commenter added that, when an institution is in the process
of fixing deficiencies, we should prohibit access to any Federal
financial aid programs until they are back in compliance. Another
commenter asserted that the proposed regulation provides for an
exceptionally long period of time to subject current and prospective
students to uncertainty about the ultimate quality and value of that
institution's credential. A group of commenters argued that the
Department's reasoning ignores the reality that accrediting agencies
often act far too slowly to protect students from predatory
institutions and that students suffer when institutions continue to
access title IV funds instead of closing. The commenters referenced
recent high-profile closures of institutions that underscore the need
for swifter action by accrediting agencies and the Department. The
commenters asserted that expediency on the part of accrediting agencies
could have protected tens of thousands of students from going further
into debt by unknowingly continuing to attend failing institutions, and
would have given those students an opportunity to transfer to higher-
performing institutions or to have their Federal student loans
discharged.
Discussion: Section 602.20 will not make it difficult for the
Department to hold accrediting agencies accountable. The regulatory
requirements for the enforcement of standards are extensive and include
multiple elements that will inform the Department's oversight of the
agencies' performance.
We also do not agree that the flexibility to issue sanctions will
make it almost impossible for accrediting agencies to hold an
institution accountable in a timely manner. In fact, the accrediting
agency's decision-making body continues to have the authority to
determine how long a program or institution has to come into full
compliance, and it retains the right to establish milestones that an
institution must meet in order to maintain its accreditation. Agencies
will continue to be held accountable for enforcing their standards and
ensuring that institutions and programs are operating in compliance
with them.
It would be inappropriate to withhold title IV funds from an
institution that is making timely and effective progress toward
resolving a finding of noncompliance. Some findings of noncompliance
are not directly related to educational quality or the student
experience and may have no impact on the quality of education
delivered. The intention is to provide programs and institutions with
enough time and opportunity to comply with the accrediting agency's
standards and minimize disruption to enrolled students' pursuit of
their educational goals. Withdrawing title IV eligibility may have a
devastating impact on students and may jeopardize an institution's
financial viability over findings of noncompliance that do not indicate
that a program or institution is failing. The Department does not
believe that providing more time for institutions to come into
compliance will support predatory practices, as the Department expects
that an agency would take immediate action or require the institution
to cease those practices immediately. For example, misleading
advertisements should not be allowed to continue once discovered and
errors in information on an institution's website would similarly need
to be corrected immediately. The extended timeframe establishes a
maximum period of time but does not assume that agencies will always
provide the maximum time available for an institution to come into
compliance.
We do not agree that the provisions in this part provide an
exceptionally long period of time for the institution or program to
come into compliance. As other commenters have reported, certain
metrics will not show improvement in the short term and require
multiple cohorts of students to benefit from the changes the
institution or program has put in place before the outcome measures
reflect those enhancements.
Finally, we do not agree that these regulations will cause
accrediting agencies to act slowly or that students are better served
by closing, rather than improving, an institution or program. Students
are best served by an effective institution that affords the student
the opportunity to achieve their educational goals in a program or at
an institution that has been granted accreditation from
[[Page 58867]]
a recognized accrediting agency. This regulation supports an
accrediting agency to work closely with the institutions or programs it
accredits to ensure compliance with the agency's standards and
educational quality.
Changes: None.
Comments: One commenter expressed concern that providing an
institution or academic program with a ``reasonable'' written timeline
for coming into compliance based on the nature of the finding, the
stated mission, and educational objectives will result in litigation on
what is a ``reasonable'' timeline for establishing compliance. The
commenter remarked that institutions will seek the longest time
possible to become compliant, harming students in subpar programs,
while the accrediting agency will not have clear guidelines to force
improvement by a set time prior to taking adverse action. Another
commenter stated that the Department did not provide evidence that the
current timeline is too aggressive or overly prescriptive, and that
extending the time for an institution to come into compliance will
result in inadequate protections for students.
Discussion: We do not agree that the use of the term ``reasonable''
will result in litigation on what is a ``reasonable'' timeline for
establishing compliance. While institutions or programs may seek to
negotiate an extended period of time in which to come into compliance
with the agency's standards, the accrediting agency's decision-making
body will have made its determination of reasonableness based on the
nature of the finding, the stated mission, and educational objectives
of the institution or program. That determination will dictate the
timeline to return to compliance, which can be less than, but must not
exceed, the lesser of four years or 150 percent of the length of the
program in the case of a programmatic accrediting agency, or 150
percent of the length of the longest program at the institution in the
case of an institutional accrediting agency. Any extension of the
timeline beyond that prescribed timeframe must be made for good cause
and in accordance with the agency's written policies and procedures for
granting a good cause extension. The assurance of educational quality
and the protection of students is a primary factor in the accrediting
agency's determination of a reasonable timeline for institutional
improvement. Moreover, nothing in this regulation precludes the use of
mandatory arbitration agreements by agencies to reduce the risk of
frivolous litigation by institutions regarding the time limits imposed
by the agency.
Changes: None.
Comments: One commenter supported the proposed changes to Sec.
602.20(a)(2) that allow additional time to document compliance, noting
that, for some issues, such as program completion, it can take more
than two years to show the effects of changes.
Discussion: We thank the commenter for their support and agree that
it can take more than two years to implement program improvements and
see their impact on future graduating cohorts.
Changes: None.
Comments: One commenter objected to the provisions of Sec.
602.20(a) that provide intermediate compliance checkpoints. The
commenter asserted that these elements are confusing, and that each
accrediting agency will handle this differently.
Discussion: We do not agree that the opportunity for an accrediting
agency to include intermediate checkpoints during the timeframe when a
program or institution is working to come into full compliance with the
agency's standards is confusing. The Department already requires each
agency to apply monitoring and evaluation approaches in Sec.
602.19(b). In Sec. 602.20, we do not prescribe how an agency will
enforce its standards but require the agency to follow its Department-
approved written policies and provide the institution with a reasonable
timeline for coming into compliance.
We expect that accrediting agencies may utilize this provision
differently, as they are not required to include intermediate
checkpoints, and we anticipate they will do so in situations where it
is important to gauge the progress toward compliance an institution or
program is making. Intermediate checkpoints may be particularly useful
to accrediting agencies when they have determined the timeframe for
improvement is approaching or at the standard timeframe limit.
Changes: None.
Comments: One commenter expressed concern that we had removed a
requirement from Sec. 602.20(a)(1) that an agency immediately initiate
adverse action.
Discussion: We continue to require accrediting agencies to initiate
immediate adverse action when they have determined such action is
warranted. We did not remove the requirement but relocated it to Sec.
602.20(b).
Changes: None.
Comments: One commenter requested that we establish specific
intervals for reviewing monitoring reports in Sec. 602.20(a)(2). The
commenter opined that, as written, it is not clear if the monitoring
period is inclusive of, or in addition to, any good cause extension.
Another commenter suggested that we clarify that changes that can be
made expeditiously must be implemented more quickly. The commenter
recommended that accrediting organizations develop explicit timeframes
for these changes, noting that students are not protected when an
institution or program is out of compliance for four years. Another
commenter recommended that we require an institution to make direct
disclosures of actions or sanctions to prospective and enrolled
students at the start of the timeframe specified in the monitoring
report.
Discussion: The changes to this section are designed to provide
accrediting agencies with the flexibility to use monitoring reports and
reasonable timelines for coming into compliance that are appropriate to
the standard, the nature of the finding, the stated mission, and the
educational objectives of the institution or program. It would not be
effective to establish specific intervals for reviewing monitoring
reports, as those intervals will and should vary based on the factors
listed above. The Department intends the monitoring report process
would be separate from the compliance report process that includes
extensions for ``good cause.''
We do not agree that it is necessary to explicitly require that
changes that can be made expeditiously must be implemented more
quickly. Implementation requirements based solely on timeliness would
undermine the ability of an institution to prioritize changes that may
be less timely but have greater benefits to students. We are confident
that the decision-making bodies of recognized accrediting agencies will
ensure that the timelines they establish for coming into compliance
will be reasonable and consider the speed with which a remedy could be
implemented.
Finally, we do not agree that prospective and enrolled students
would benefit from direct disclosures of monitoring activities. As we
have stated in the NPRM and this preamble, we expect to use the
monitoring report to address minor deviations from agency standards;
alerting students each time a monitoring report is issued may undermine
the effectiveness of student notifications for more serious findings of
noncompliance subject to mandatory notification requirements.
Changes: None.
[[Page 58868]]
Comments: One commenter requested that we clarify in Sec.
602.20(a)(4) what action would occur in response to a monitoring
report. The commenter asserted that it is difficult to understand what
it means to approve or disapprove a report.
Discussion: Accrediting agencies will develop a written policy that
describes how they will evaluate monitoring and compliance reports. The
Department requires the use of monitoring and evaluation approaches in
Sec. 602.19(b), which could include compliance or monitoring reports.
We require agencies to describe the policies and procedures relating to
such approaches currently, and that requirement would not change with
the implementation of the new regulations.
Changes: None.
Comments: One commenter objected to the inclusion of ``immediate
adverse action'' in Sec. 602.20(b). The commenter argued that, while
accrediting agency staff can take immediate action, the decision-making
body may not meet for several months. The commenter suggested we modify
the language to empower senior staff, in consultation with the Chair of
the decision-making body (or similar), to take immediate adverse
action.
Discussion: The requirement in Sec. 602.20(b) for an agency to
immediately initiate adverse action when an institution or program does
not bring itself into compliance within the specified period is not
new. The Department maintains that this is a reasonable and appropriate
expectation for accrediting agencies to ensure compliance with its
standards.
The decision-making body generates all accreditation decisions,
except for the allowances in Sec. 602.22 for the review and approval
or denial of specific substantive changes. The current use of
``immediate adverse action'' in this section has been interpreted to
mean as soon as the decision-making body first reviews and determines
noncompliance. Nonetheless, many accrediting agencies have procedures
in place for making accreditation decisions in between regularly
scheduled meetings of the decision-making body.
Changes: None.
Comments: One commenter supported the provision in Sec. 602.20(c)
that allows an accrediting agency that takes adverse action against the
institution or program to maintain the accreditation or
preaccreditation of the program or institution until the institution or
program has had time to complete the teach-out process. However, the
commenter was concerned that a temporary hold on accreditation action
could be problematic for students seeking a closed school loan
discharge and that there will be programs and institutions that retain
their accreditation, but the programs will not meet licensing
requirements with licensing boards due to the original deficiencies
that led the institution or program to enter into a teach-out.
Discussion: We appreciate the commenter's support. The regulation
provides accrediting agencies with the latitude to maintain the
institution's or program's accreditation or preaccreditation until the
institution or program has had reasonable time to complete the
activities in its teach-out plan, which could include assisting
students in transferring or completing their programs, but it does not
require them to do so. The intention of this provision is to ensure
that students may successfully achieve their educational objectives. If
the accrediting agency's finding would result in graduates of the
program not meeting licensing requirements, we would expect the agency
to take immediate adverse action. Many agencies already have similar
policies or practices in place.
We understand that an extension of accreditation through the teach-
out process would delay the availability of a closed school loan
discharge for students who choose to interrupt, rather than complete,
their academic program. However, a closed school loan discharge is
available to students who leave a school up to 180 days prior to its
closing, which should be ample time for the school to complete its
teach-out. The Department has also clarified in its recently published
Institutional Accountability regulations (84 FR 49788) that, in the
event that a teach-out plan extends beyond 180 days, a student who
elects at the time the teach-out is announced to pursue a closed-school
loan discharge rather than participate in the teach-out will retain the
right to receive a closed-school loan discharge. This is the case even
if, under the terms and conditions of the teach-out plan, the
institution does not close until more than 180 days after the
announcement of the teach-out.
Changes: None.
Comments: Two commenters objected to the provision in Sec.
602.20(d) that allows an agency that accredits institutions to limit
the adverse or other action to specific programs at the institution or
to specific additional locations of an institution, without taking
action against the entire institution and all programs, provided the
noncompliance was limited to a specific program or location. The
commenters opined institutional accrediting agencies rarely evaluate
individual programs, and that to do so may be prohibitively expensive
and burdensome. The commenters further asked if the proposed changes
could mean that an accrediting agency could sanction or withdraw
accreditation from an institution based on a negative evaluation of a
single program.
Another commenter expressed concern that these provisions could
harm students who leave their program due to adverse action on their
program when the rest of the institution remains open. Those students
would be ineligible for a closed school discharge. The commenter
suggested that an institution should be financially responsible to make
these students whole and refund all tuition charges for that program
when a program closes and not the institution.
Discussion: Under both the current regulations and these final
regulations, an accrediting agency may sanction or withdraw
accreditation from an institution based on the noncompliance with
accrediting standards of a single program. However, the negotiating
committee concurred that this could be an extreme reaction that could
potentially harm many more students than are impacted by the
deficiencies of a single program, and, accordingly, agreed to provide
accrediting agencies with the ability to target their actions to
noncompliant programs when an institution is otherwise compliant and
serving its students.
We do not agree that institutional accrediting agencies rarely
evaluate individual programs. We recognize that an institutional
accrediting agency may use sampling or other methods in the evaluation
to conduct their review, and that an agency may rely upon the
accreditation by a recognized programmatic accrediting agency to
demonstrate the evaluation of the educational quality of such programs.
This does not mean that an institutional accrediting agency must
separately review every academic program offered by an institution.
However, if an institutional accrediting agency determines that a
single program is not compliant with the agency's standards, the agency
could determine that its accreditation does not extend to that program.
We acknowledge that the HEA does not provide a remedy for students
who leave their program due to an adverse action by an accrediting
agency against their program when the rest of the institution remains
open. As a result, the Department does not have the legal authority to
require institutions to
[[Page 58869]]
refund tuition and fees to students whose programs the accrediting
agency found to be out of compliance with its standards.
Changes: None.
Review of Standards (Sec. 602.21)
Comments: One commenter contended that Sec. 602.21(a) imposes an
undue burden on accrediting agencies and called for a review of
standards only as circumstances dictate, noting the infrequency of
changes in institutional and accreditation policies. The commenter
further asserted the involvement of all relevant constituencies is an
unrealistic requirement and suggested instead that we require
accrediting agencies to invite participation from all relevant
constituencies. They also requested that we define, or remove, the term
``systematic.''
One commenter supported the proposed changes to Sec. 602.21(d)(3)
requiring agencies to respond to comments by constituencies during the
review of standards. This commenter noted the process would be
consistent with the comment process at other Federal agencies.
A group of commenters noted concern that the regulations would
allow institutions to establish alternate standards, making it more
difficult for the Department to monitor accrediting agency performance.
They noted risk of dilution of standards used to evaluate institutions,
as well as concern that the Department would cease to require one set
of evaluation standards. They further expressed concern that the
regulations do not require transparency with respect to agencies'
alternate standards, when or how the agencies may use alternate
standards, or how the Department would assess compliance with agencies'
alternate standards.
Discussion: The Department considered the above comments thoroughly
and notes that the Federal and non-Federal negotiators discussed many
of the above stakeholders' views and concerns during the negotiated
rulemaking process for Sec. 602.21. The Department believes that the
proposed changes are consistent with HEA section 496(a)(4)(A), which
requires that an agency's standards ensure that the institution's
courses or programs are of sufficient quality to meet the stated
objectives for which they are offered for the entire accreditation
period.
The revisions to Sec. 602.21 clarify that, when reviewing
standards, agencies must maintain a comprehensive systematic program
that involves all relevant constituencies and is responsive to comments
received. Current regulations require an institution to complete the
review of all of their standards at the same time. The Department
believes it is reasonable for the agency to review different standards
at different time intervals since doing so may be a more efficient way
of completing the review and may allow the agency to be more responsive
to the most important changes needed. Moreover, when the Department
conducts a review of an agency's standards, it will include any
alternative standards that an agency established and will ensure those
standards sufficiently ensure the quality of the institution.
The Department believes the proposed language will continue to
allow the Department to monitor accrediting agency performance and
ensure an agency's system of review is comprehensive and responsive to
all constituencies while allowing for more innovation in program
delivery and flexibility in response to demonstrated need, without
imposing an undue burden on any party. As is currently the case, an
agency would not be found to be out of compliance with the Department's
regulations if one or more relevant constituencies fails to offer
comments once made aware through a public comment period that the
agency is reviewing or modifying its standards.
Changes: None.
Substantive Change (Sec. 602.22)
Comments: Several commenters supported the proposed changes to
Sec. 602.22. One commenter specifically expressed support for the
change that would allow an accrediting agency's senior staff to approve
specific, substantive changes for institutions that are in good
standing, without requiring the agency's decision-making body to
approve these types of changes. Other commenters specifically supported
the changes in Sec. 602.22 that clarify the process accrediting
agencies must use when reviewing substantive changes and provide
agencies with more flexibility to focus on changes that are high impact
and high risk. The commenters opined that the proposed language will
also give agencies more flexibility to approve less risky changes by
granting an agency's decision-making body the authority to designate
senior agency staff to approve or disapprove the substantive change
request in a timely, fair, and equitable manner. Another commenter
noted that this change will allow institutions to open satellite or
branch campuses that would be accredited after opening. The commenter
suggested that this relatively minor regulatory change opens the door
for greater access to higher education for underserved communities who
may be limited to choosing an institution that enables them to stay
close to home. The commenter noted that these changes will facilitate
growth in the market for higher education, encourage competition, and
ensure fewer students turn down a quality education because of
location. Another commenter expressed appreciation for the provisions
that require accrediting agencies to monitor rapid growth in
enrollment. The commenter asserted that quick, unprecedented growth
opens the door to predatory practices, and does not provide typical
safeguards for quality assurance.
One commenter who opposed this change believed that it would allow
political appointees to overturn long-standing Department policies.
This commenter also expressed concern over potentially predatory
practices and lower accrediting standards.
Discussion: We thank the commenters who supported the changes in
this section. We believe these changes allow for greater flexibility
for institutions to innovate and respond to the needs of students and
employers, while maintaining strict agency oversight in more targeted
areas, such as those associated with higher risk to students or the
institution's financial stability, such as changes in institutional
mission, types of program offered, or level of credential offered.
We disagree that the regulations will not provide safeguards for
quality assurance. Accrediting agencies will continue to review
substantive changes for quality assurance. Providing flexibility to
accrediting agencies to allow senior staff to review and approve less
risky changes enables accrediting agencies to focus their resources on
issues that provide the highest level of risk to students and
taxpayers. We disagree with the commenter who believed that this change
invites predatory practices and lower standards. While it is possible
that long-time policies could change, we believe that streamlining this
process will not lead to a reduction in its rigor. Accrediting agencies
do not employ political appointees; the commenter may be
misunderstanding the fact that agencies, not the Department, are
responsible for approving substantive change requests.
Changes: We have made a technical correction to Sec. 602.22(a)(1)
to make clear that the substantive changes subject to this regulation
are not limited to changes to an institution's or program's mission,
but rather, include all
[[Page 58870]]
substantive changes addressed in Sec. 602.22.
Comments: Several commenters objected to the provisions in this
section, asserting that they would create a rushed review process for
program outsourcing requests with less stringent standards and less
accountability; increase the risk that low-quality schools will be
approved to receive Federal student aid to administer poor academic
programs, which will waste students' time and educational benefits in
addition to taxpayer dollars; let colleges close campuses and move
online with inadequate review of substantive changes; allow an existing
agency to expand its scope into areas where it lacks experience; and
reduce accountability among agency commissioners, shifting
responsibility and potential consequences of poor decision-making onto
staff.
Discussion: The changes in this section will provide flexibility to
accrediting agencies while maintaining proper agency oversight of high-
risk changes. While we designed these regulatory changes to reduce the
cost and time required for institutions to obtain approval from their
accrediting agencies, agencies will still be held accountable for
making well-reasoned decisions. These changes will also allow
accrediting agencies to focus their limited resources on the types of
changes that pose the greatest risk to students and taxpayers. The
changes will also enable the decision-making bodies at accrediting
agencies to focus on the most significant and potentially risky
changes. The Department believes that appropriate and adequate review
processes will remain in place and that allowing agencies to focus on
changes with the most associated risk will improve oversight of
institutions and protection of student and taxpayer interests.
We do not agree that improved efficiency results in lax oversight.
The foundation of this section of the regulations requires every agency
to document adequate substantive change policies that ensure that any
substantive change made after the agency has accredited or
preaccredited the institution does not adversely affect the capacity of
the institution to continue to meet the agency's standards.
Changes: None.
Comments: One commenter asked that we clarify whether Sec.
602.22(a) pertains only to substantive changes in an institution's
mission. The commenter suggested that the provisions in this section
apply more broadly and that we remove the phrase ``change to the
institution's or program's mission.''
Discussion: Section 602.22(a) is intended to pertain to all of the
substantive changes as described in Sec. 602.22(a)(1)(ii), and not
just changes to an institution's or a program's mission. We agree with
the commenter that the phrase ``change to the institution's or
program's mission'' does not convey our intent to include all
substantive changes as delineated in Sec. 602.22(a)(1)(ii).
Changes: We are revising Sec. 602.22(a) by removing the words ``to
the institution's or program's mission'' to clarify that Sec. 602.22
applies to all substantive changes as specified in Sec.
602.22(a)(1)(ii), and not just substantive changes to an institution's
or program's mission.
Comments: One commenter suggested that the regulations should allow
accrediting agencies to designate future unknown innovations or changes
as substantive, if those changes or innovations present a unique risk
to students and taxpayers. Another commenter asked whether institutions
must complete a substantive change application each time they would
like to offer a program at the master's or doctoral level when the
institution already offers the same area of study at the undergraduate
or master's level.
Discussion: In response to the commenter who suggested that we add
a provision allowing agencies to designate future unknown innovations
or changes as substantive, if the innovations or changes present a
unique risk to students and taxpayer, the regulations provide that
agencies must require an institution to obtain the agency's approval of
a substantive change before the agency includes the change in the scope
of accreditation or preaccreditation it previously granted to the
institution. This provision enables an institution and agency to
consider applications for substantive change based on a proposed change
or innovation.
We further clarify that an institution must submit a substantive
change application whenever it seeks to increase its level of offering,
including moving from the bachelor's level to a master's level and from
a master's level to a doctoral level. An institution is not required to
submit a substantive change application for each subsequent program at
the same educational level.
Changes: None.
Comments: One commenter asked if we intend for Sec.
602.22(a)(2)(ii) to provide that staff will decide the outcome, since
there are accrediting agencies which do not meet every 90 days.
Discussion: Under Sec. 602.22(a)(2)(ii), the Department intends to
allow senior staff at accrediting agencies to make decisions regarding
requests for approval of written arrangements, unless the agency or its
senior staff determines significant related circumstances require a
review of the request by the agency's decision-making body.
Changes: None.
Comments: One commenter asserted that the Department had
interpreted in an overly broad way the statutory requirement in HEA
section 496(c)(4) and (5) that accrediting agencies require that
institutions establish a business plan prior to opening a branch
campus, and that the agency will conduct an on-site visit of that
branch campus within six months of its establishment. The commenter
recommended that the regulations require approvals of all locations and
site visits to all approved locations within six months of opening.
Discussion: The Department disagrees that we have interpreted the
statutory requirement too broadly. As the commenter notes, the HEA
requires that any institution of higher education subject to its
jurisdiction which plans to establish a branch campus submit a business
plan, including projected revenues and expenditures, prior to opening
the branch campus, and that the institution's accrediting agency agrees
to conduct, as soon as practicable, but within a period of not more
than six months of the establishment of a new branch campus or a change
of ownership of an institution of higher education, an on-site visit of
that branch campus or of the institution after a change of ownership.
The regulations in Sec. 602.22 continue to require an accrediting
agency to have an effective mechanism for conducting, at reasonable
intervals, visits to a representative sample of additional locations.
We do not believe it is necessary or practical to require an
accrediting agency to require the approval of all locations or to visit
all approved locations within six months of opening. While an
accrediting agency may choose to require such approvals or site visits,
we believe that the agency should have the flexibility to determine
this rather than for us to regulate those actions.
Changes: None.
Comments: One commenter requested that the Department reconsider
the provision in Sec. 602.22(b) that creates new circumstances under
which certain activities by provisionally certified institutions will
require substantive change approval by their institutional accrediting
agency. The commenter urged the Department to consider limiting this
new burden of review to
[[Page 58871]]
institutions that are on Heightened Cash Monitoring 2 (HCM2) or
demonstrate some other more specific risk to students and title IV than
just that the institutions are provisionally certified.
Discussion: We proposed only two additional substantive changes for
which an institution placed on probation or equivalent status must
receive prior approval and for which other institutions must provide
notice to the accrediting agency in Sec. 602.22(b). These include when
the agency requires the institution to obtain the agency's approval of
the substantive change before the agency includes the change in the
scope of accreditation or preaccreditation it previously granted to the
institution, and when the agency's definition of substantive change
covers high-impact, high-risk changes.
We do not believe it would be helpful to limit this change to those
institution who are on HCM2 or who demonstrate specific risks. We
believe this provision offers an important review that would only
rarely occur if we limited the use to those circumstances suggested by
the commenter.
Changes: None.
Comments: Three commenters opposed the revisions to the substantive
change regulations, arguing the Department failed to provide enough
evidence to justify the changes and to specify how we would assess
whether a change is ``high-impact and high risk.'' The commenters
opined that the changes are incongruent with statutory requirements
pertaining to the approval of branch campuses and direct assessment
programs.
Discussion: The revisions to the substantive change regulations are
designed to provide accrediting agencies more flexibility to focus on
the most important changes. We believe that this targeted, risk-based
approach focuses the agency's decision-making body's efforts on more
relevant or risky issues in a changing educational landscape, while
allowing an agency to delegate lower-risk decisions to staff. The
Department considers a high-impact, high-risk change to include those
changes provided as examples in the regulations (Sec.
602.22(a)(ii)(A)-(J)), such as substantial changes in the mission or
objectives of the institution or program; a change in legal status or
ownership; changes to program offerings or delivery methods that are
substantively different from current status; a change to student
progress measures; a substantial increase in completion requirements;
the acquisition of another institution or program; the addition of a
permanent site to conduct a teach-out for another institution; and the
addition of a new location or branch campus.
We do not believe that the changes contradict the statutory
requirements for the approval of branch campuses and direct assessment
programs. HEA section 498 (20 U.S.C. 1099c(j)) provides the Secretary
with the latitude to establish regulations that govern the
certification of a branch of an eligible institution.
Changes: None.
Comments: One commenter asked that we clarify Sec. 602.22(b)(2),
which refers to ``A change of 25 percent or more of a program since the
agency's most recent accreditation review.'' The commenter asked if
this is in reference to a change in the number of credit hours
associated with the program and, if so, whether we would consider all
courses, only courses within the discipline, or only general education
courses.
Discussion: When we referred to ``A change of 25 percent or more of
a program since the agency's most recent accreditation review'' in
Sec. 602.22(b)(2), we meant a single change, or the sum total of the
aggregate changes, to a program's curriculum, learning objectives,
competencies, number of credits required, or required clinical
experiences. This would include changes in the general education
courses required for program completion and not merely the courses
within the discipline, program, or major.
Changes: We have revised Sec. 602.22(b)(2) to clarify that we
would consider an aggregate change of 25 percent or more of the clock
hours or credit hours or program content of a program since the
agency's most recent accreditation review to be a substantive change
requiring prior approval under Sec. 602.22(b)).
Comments: One commenter requested that we add the acquisition of
any other institution, program, or location to the required
representative sample of site visits to additional locations in Sec.
602.22(d).
Discussion: As stated earlier, the Department proposes revisions to
the substantive change regulations to provide accrediting agencies more
flexibility to focus on the most important changes. While an
accrediting agency may choose to implement a policy such as what the
commenter suggested, we do not believe it is appropriate to broadly
regulate such activity.
Changes: None.
Comments: One commenter requested clarification as to when an
institution must seek approval of a new location instead of reporting
the change under Sec. 602.22(a)(1)(ii)(J) and Sec. 602.22(c).
Discussion: As stated in Sec. 602.22(c), once an institution
receives accrediting agency approval for two additional locations, it
may report subsequent locations, rather than seeking additional
approval, if it meets the conditions in Sec. 602.22(c).
Changes: We have made a technical correction in Sec. 602.22(c) to
clarify that institutions that have successfully completed at least one
cycle of accreditation and have received agency approval for the
addition of at least two additional locations must report these changes
to the accrediting agency within 30 days, if the institution has met
criteria included in this section of the regulations.
Operating Procedures All Accrediting Agencies Must Have (Sec. 602.23)
Comments: Two commenters wrote in support of the requirements in
Sec. 602.23(a)(2) that an accrediting agency make written materials
available describing the procedures that institutions or programs must
follow regarding the approval of substantive changes.
Discussion: We appreciate the commenters' support.
Changes: None.
Comments: One commenter endorsed the change in Sec. 602.23(a)(5)
that requires the mandatory disclosure of names, academic and
professional qualifications, and relevant employment and organizational
affiliations of members of the agency's decision-making bodies and
principal administrative staff.
Discussion: We appreciate the commenter's support.
Changes: None.
Comments: One commenter supported the change to Sec. 602.23(d)
that permits publishing address and telephone information as an
alternate form of agency contact information.
Discussion: We appreciate the commenter's support.
Changes: None.
Comments: Two commenters agreed with the change to Sec. 602.23(f)
that reserves preaccreditation status for institutions and programs
that are likely to succeed in obtaining accreditation. The commenters
noted that this is an important requirement, as institutions may be in
preaccreditation status for five years and then may not succeed in
getting accreditation. Students may suffer if their school does not
achieve accreditation, and, if the school closes, taxpayers will be
responsible for closed school loan discharges. One of the commenters
also supported requiring
[[Page 58872]]
accrediting agencies to obtain a teach-out plan from all preaccredited
institutions and recommended that they update the teach-out plans every
six months if they include partner institutions, as those agreements
and the regional education landscape change frequently.
Discussion: We appreciate the commenters' support. We do not
believe it is practical or necessary to require accrediting agencies to
obtain updated teach-out plans from pre-accredited institutions every
six months, nor would it be reasonable to expect an institution to seek
contractual teach-out agreements with other institutions simply because
the institution or program is in a preaccredited status. If an
accrediting agency determines that it is necessary for an institution
to implement its teach-out plan, the agency can request that the
institution seek or enter into one or more contractual teach-out
agreements with partner institutions that offer the courses or programs
needed by the closing institution's students.
Changes: None.
Comments: A group of commenters objected to Sec. 602.23(f),
asserting that it is unclear from the Department's reasoning exactly
what risks, if any, the proposal to maintain preaccreditation status
will mitigate. The commenters argued that the proposal increases risk
by not removing title IV eligibility from a school that has
demonstrated its inability to provide a quality education and allowing
students to continue to attend that school for up to four months or
longer. The commenters asserted that, if the Department agrees to then
recognize those students' work as ``accredited,'' the students will
still have to market themselves to other institutions and employers and
will be ill equipped to effectively do so, having received such a poor
education.
Discussion: We intend for this provision to ensure that students
can successfully achieve their educational objectives at the
institution where they chose to enroll. We do not agree with the
commenters' assertion that the student will have received a poor
education, as there are many factors, apart from the quality of the
education provided, that can result in an institution not receiving
accreditation after a period of preaccreditation. An accrediting
agency, in awarding preaccreditation, must believe that the program or
institution is likely to obtain accreditation, meaning that the
educational quality must meet the agency's requirements. Students may
use title IV funds to enroll in a preaccredited program. Therefore, the
accrediting agency must believe that it is of appropriate quality to
likely become accredited. It would be detrimental to students to allow
them to enroll in a preaccredited program and subsequently determine
that the credits they earned during that enrollment would likely not
transfer to another institution if the program is not fully accredited.
Without such a provision, an institution could not recruit students to
a preaccredited program, and the Department could not allow those
students to obtain title IV funds. This would reduce the likelihood of
institutions starting new programs in areas where there may be
significant workforce demand.
Changes: None.
Comments: One commenter supported the proposal in Sec.
602.23(f)(ii) to require accrediting agencies to insist on a teach-out
plan from preaccredited institutions. However, the commenter suggested
this provision does not ensure adequate protection. The commenter
recommended that the Department require a teach-out agreement and that
adequate funds are set aside to implement the agreement if the school
does not receive accreditation.
Discussion: We appreciate the commenter's support and suggestion.
However, we believe it would be impractical to require preaccredited
institutions to establish teach-out agreements, as these are
contractual arrangements that are based on the number of students
enrolled in a program (among other factors) and institutions would need
to update them each term in order to accurately reflect the current
status of the program. Also, an institution cannot force another
institution to enter into a contractual agreement, especially since a
teach-out agreement often includes financial arrangements between the
two institutions. The Department cannot require any institution to
enter into a contractual agreement with another institution and it
would be difficult to know in advance what financial arrangements would
be required by the receiving institution in the event of a teach-out,
since this could change based on the number of students to be served at
the time of the teach-out and other factors. The Department also lacks
the authority to require institutions to post a letter of credit simply
because they are in a preaccredited status.
Changes: None.
Comments: One commenter supported the proposed language in Sec.
602.23(f)(2) that allows the Secretary to consider all credits and
degrees earned and issued by an institution or program holding
preaccreditation from a nationally recognized agency to be from an
accredited institution or program. The commenter observed that this may
help clarify what preaccreditation status means, prevent harm to
students who attend preaccredited institutions or programs, and
recognize that graduates of preaccredited programs are workforce-ready
and, therefore, should be eligible for State or national credentials.
Discussion: We appreciate the commenter's support.
Changes: None.
Comments: One commenter objected to the provisions of Sec.
602.23(f)(iv), stating that instead of adding protections for students
in the event the institution does not obtain accreditation, the
Department proposes to allow an institution to maintain its
preaccredited status, continue serving students, and collect student
and taxpayer money even when it is now guaranteed the institution or
program will not gain accreditation. The commenter asserted that
preaccreditation status and accredited status are fundamentally not the
same and that we should not consider them to be equal.
Discussion: The Department has not proposed that a preaccredited
program or institution continue to be able to operate in the rare
instance that an agency makes a final decision not to award full
accreditation. Instead, the Department seeks to protect students
enrolled in preaccredited programs or institutions so that, in the
event the program or institution does not receive full accreditation,
the students are able to transfer credits and complete their program at
another institution. The Department considers both preaccreditation and
accreditation to be an accredited status. Since both accreditation and
preaccreditation may allow a student to access title IV funds, the
Department is committed to providing protections to students to ensure
that the credits they earned using title IV funds can be transferred to
other institutions. Several accrediting agencies require institutions
or programs to graduate a cohort of students before they will grant
full accreditation. However, the students who complete the program
during a period of preaccreditation may not be eligible to sit for the
licensure exam if the requirement to do so necessitates that they have
graduated from an accredited program. Thus, it is important that these
students be afforded the opportunity to fulfill their educational
objective to be licensed in the profession for which they were prepared
if the program or institution
[[Page 58873]]
became accredited based on the agency's review of the institution or
program that took place during the time in which the student was
enrolled. Accrediting agencies have reported to us that preaccredited
programs and institutions typically proceed to fully accredited status.
The agencies noted that they grant preaccreditation status when the
agency has confidence that the institution or program will ultimately
become accredited, but some agencies will not award full accreditation
until they review licensure exam pass rates or other employment
outcomes dependent upon a student having attended an accredited
institution.
Changes: None.
Additional Procedures Certain Institutional Accreditors Must Have
(Sec. 602.24)
Comments: Several commenters supported the Department's proposed
changes to Sec. 602.24. Collectively, the commenters expressed
appreciation for the flexibility afforded to institutions and
accrediting agencies by the proposed rules, allowing them to focus more
on innovating and providing students with a quality education.
Discussion: We appreciate the commenters' support for these
proposed changes and the Department's efforts to facilitate innovation
and reduce regulatory burden.
Changes: None.
Comments: One commenter objected to the elimination of the
requirement in Sec. 602.24(a) for an institution to include in its
branch campus business plan submitted to the accrediting agency a
description of the operation, management, and physical resources of the
branch campus. The commenter asserted that the proposed changes fall
short of what is required by statute--namely that ``any institution of
higher education subject to [an accreditor's jurisdiction] which plans
to establish a branch campus submit a business plan, including
projected revenues and expenditures, prior to opening a branch
campus.'' The commenter further asserted that the proposed revisions
fail to establish what is a reasonable period needed to judge the
appropriateness of opening a branch campus, and that the Department
failed to conduct any cost-benefit analysis or adequately justify the
change.
Discussion: We disagree with the commenter that the changes to
Sec. 602.24(a) fail to meet the statutory requirements. We proposed
amendments to this provision specifically to remove requirements that
we believe go beyond the statutory requirements. Additionally, we
believe the requirements in Sec. 602.24(a) were either unnecessarily
prescriptive or duplicated requirements in the revised Sec. 602.22.
Regarding what we consider a reasonable time period for an agency to
judge the appropriateness of opening a branch campus, we do not believe
a compelling reason exists for the Department to impose strict calendar
timeframes around such determinations. The amendatory text requires,
with respect to branch campuses, an agency to demonstrate that it has
established and uses all of the procedures prescribed in Sec.
602.24(a). We expect an agency's protocols to facilitate this being
accomplished in a timely manner. The reasons for the proposed changes
to Sec. 602.24(a), removing the requirements for an institution to
include in its branch campus business plan a description of the
operation, management, and physical resources of the branch campus, and
for an agency to extend accreditation to a branch campus only after the
agency evaluates the business plan, are explained in the July 12, 2019
NPRM and reiterated above. We do not believe it is further necessary to
conduct a cost-benefit analysis to support these changes or that such
an analysis is germane to the discussion of whether they are needed.
As the Department noted during negotiated rulemaking, there are no
data upon which to base the establishment of a reasonable period to
judge the appropriateness of a branch campus. However, we believe the
time required to obtain approval was, in many cases, so significant
that it impeded institutional growth and student access. We hope with
these changes that more closely align with the statute, we will enable
institutions and accrediting agencies to be nimbler and more responsive
to student demand. The regulations maintain important oversight
protections by requiring the institution to submit a business plan and
the accrediting agency to conduct a site visit within six months.
Changes: None.
Comments: Two commenters requested that the Department delete the
reference in Sec. 602.24(c)(2)(i) to institutions merely placed on the
reimbursement payment method described in Sec. 668.162(c)--commonly
known as HCM. One of those commenters stressed that while we typically
place institutions with composite scores of less than 1.5 on HCM1, this
does not mean such institutions are in danger of closing. The commenter
further noted that if no changes are made to the calculation of the
composite score to reflect the recent change by the Financial
Accounting Standards Board regarding leases, institutions will fail
financial responsibility and be put on HCM1 when, economically, nothing
has changed, and that institutions can be placed on HCM1 for various
other reasons, including noncompliance with Clery Act standards or
other regulatory matters. The commenter concluded the Department should
revise Sec. 602.24(c)(2)(i) to pertain only to instances where an
institution has been placed on the reimbursement payment method under
Sec. 668.162(c) or the HCM payment method requiring the Secretary's
review of the institution's supporting documentation under Sec.
668.162(d)(2).
Discussion: We believe the commenters may have misinterpreted
proposed Sec. 602.24(c)(2)(i), which requires submission of a teach-
out plan if the Secretary notifies the agency that it has placed the
institution on the reimbursement payment method under Sec. 668.162(c)
or the HCM payment method requiring the Secretary's review of the
institution's supporting documentation under Sec. 668.162(d)(2). Under
the reimbursement payment method, an institution must, in addition to
identifying the students or parents for whom reimbursement is sought,
credit a student's or parent's ledger account for the amount of title
IV, HEA funds he or she is eligible to receive, submit documentation
showing that each student or parent included in the request was
eligible to receive the title IV, HEA program funds requested, and show
that any title IV credit balances have been paid. HCM2, described in
Sec. 668.162(d)(2), mirrors the reimbursement payment method except
that the Secretary may modify the documentation requirements and
procedures used to approve the reimbursement request. HCM1, found in
Sec. 668.162(d)(1) and identified by the commenter as the cash
monitoring payment method on which the Department commonly places
institutions with low composite scores, does not require the submission
of documentation establishing the eligibility of a student.
Institutions on HCM1 are not subject to the provisions of proposed
Sec. 602.24(c)(2)(i).
Changes: None.
Comments: One commenter asked the Department to clarify the teach-
out requirements in Sec. 602.24(c) related to travel. The commenter
questioned the standard that the teach-out arrangement should not
require travel of substantial distances or durations, on the basis that
it is vague and does not address situations where geographically
convenient options for on-the-ground
[[Page 58874]]
programs are limited due to being at capacity enrollment or capped
enrollment. The commenter concluded that it is insufficient merely to
name local institutions with similar programs, as those programs are
frequently unable to assist with a teach-out.
The same commenter agreed with the Department that a teach-out by
an alternative delivery modality is insufficient unless an option for a
teach-out via the same delivery modality as the original educational
program is also available. However, the commenter contended that the
institution should also ensure there is a geographic limitation on this
requirement, that is, an institution should not be permitted to have
its own distance education program be offered as a teach-out when the
on-ground offering is 200 miles away from the original on-ground
location and there are significant transportation barriers.
Finally, the commenter agreed with the Department that an
accrediting agency should be permitted to waive the requirements
related to the percentage of credits that must be earned at the
institution awarding the educational credential for students completing
their program under a written teach-out agreement, but recommended that
the waiver also apply to institutions allowing students to transfer to
the institution in lieu of a written teach-out agreement.
Discussion: We agree that merely naming local institutions with
similar programs does not constitute a teach-out agreement, yet we note
that it may be appropriate in a teach-out plan.
We appreciate the commenter's support regarding the insufficiency
of alternative delivery modes for a teach-out and agree that it may be
an option available, but it cannot be the only option provided to
students. We further agree that the teach-out needs to provide the same
method of delivery as the original education program.
We do not, however, agree that we should prescribe a specific
geographic limitation. The regulations require that the teach-out
agreement provide students access to the program and services without
requiring them to move or travel for substantial distances or
durations. We believe that the accrediting agencies (and the States)
should determine what is a reasonable distance or travel duration based
on the circumstances of each location. For example, in some parts of
the country, a 10-mile distance is the equivalent of more than an hour
of driving time. In other parts of the country, it is unlikely that
another institution would be available within a 10-mile radius and so
it might be reasonable to expect students to travel farther to complete
their program. The distance noted by the commenter would not be a
reasonable distance. While we would support allowing the institution to
offer its own distance education program as an option to its students,
we would not allow that offering to supplant the requirement to provide
a reasonable ``brick-and-mortar'' option to the students if the
original education program was offered as an on-ground program.
We thank the commenter who supported the Department's waiver of
requirements related to the percentage of credits earned at the
institution for students completing their program under a written
teach-out agreement. We also agree that the same waiver should be
available to students who transfer credits following a school closure,
even if that transfer is not part of a formal teach-out agreement.
However, we do not agree that this requires a change to the regulatory
language in this section, as it is within the accrediting agency's
authority to grant this waiver when it is appropriate to do so.
Changes: None.
Comments: One commenter asserted that the Department should require
any institution that closes, as a condition of closing, provide current
transcripts to every student, past and present, as well as refund to
students all amounts paid retroactive to the beginning of the current
semester. The commenter stated that this would hold for-profit
institutions to the same standard as State-funded institutions.
Discussion: We appreciate the commenter's concern for preservation
of students' academic records and agree that closing institutions have
an obligation to preserve those records and transfer them to the
appropriate entity, as described in their teach-out plan. Teach-out
plans must include arrangements for maintenance of records as well as
instructions to students for how they can obtain those records.
However, we do not have the authority to require a closing school to
distribute transcripts to students. Additionally, most institutions
require the submission of an official transcript directly from an
institution for admission consideration. An institution might not
consider a transcript submitted from an applicant to be an official
transcript.
The Department does not have the authority to require institutions
to refund students for non-title IV tuition payments made. We agree
that closing schools should reimburse students if tuition was paid for
classes that will no longer be offered, but we do not have the
authority to require that of institutions. We applaud States that
require a closing or closed public institution to refund students'
tuition and fees for the final term. However, we are aware that some
States operate tuition recovery funds to enable students to receive
financial reimbursement for some or all of the non-title IV tuition
payments made in the event that an institution closes.
Changes: None.
Comments: One commenter, while generally supportive of the proposed
changes to Sec. 602.24, suggested we prohibit closure of an
institution based solely upon loss of accreditation. The commenter
believed institutions should remain open for a period of one year or
more after removal of accreditation to allow for students to determine
whether they wish to complete their educational program at that
institution. The commenter concluded that we should not allow the
institution to solely determine the fate of students' academic careers.
Discussion: The Department appreciates the commenter's support on
these changes. We note, however, that we cannot prevent an institution
from closing when it loses accreditation since many students could not
continue their enrollment without access to title IV funds. Also, loss
of accreditation is a circumstance that enables students to seek and
receive a closed school loan discharge. The Department does not
determine whether an institution is open or closed. The Department
determines an institution's eligibility to participate in the title IV
programs and recognizes that, in many instances, the loss of title IV
eligibility makes it impossible for an institution to continue
educating students.
Changes: None.
Comments: One commenter noted with regard to the proposed revisions
to Sec. 602.24(c)(2)(iii) that a school that is on the verge of losing
its recognition or intends to cease operations may not fully cooperate
in carrying out teach-out mandates, assurances to students may not be
implemented, and that expecting an orderly transition is not always
realistic. The commenter believed the Department should conduct a
careful review of previous terminations and closures to see if there
are lessons to learn and apply.
Discussion: The Department agrees with the commenter that an
orderly transition does not occur in all cases, yet we strive for a
transition that is as smooth as possible. The Department has examined,
and will continue to
[[Page 58875]]
examine, school closures so that we and other triad partners can
collectively assist students impacted by closures. Our experience
suggests that students are best served when they have options to
complete their program, including through an approved teach-out plan or
teach-out agreement.
Changes: None.
Comments: One commenter recommended that the Department revisit
proposed Sec. 602.24(c), outlining the circumstances under which an
accrediting agency must require an institution to submit a teach-out
plan. The commenter urged the Department to not rely on provisional
certification as an indicator of trouble--since that is not always the
case--and instead consider identifying problem institutions as those
the Department has placed on HCM2 or has taken action against under
subpart G of the General Provisions.
Discussion: We agree with the commenter's position that provisional
certification does not always indicate trouble. However, we believe
that provisional certification imposes a higher level of risk to
students and taxpayers and increases the likelihood that a school
closure might ensue. Some accrediting agencies require all institutions
to keep teach-out plans on file at all times. Teach-out plans do not
require an institution to take any action, but instead to describe what
the institution would do, and potential programs or institutions that
could accept students, if the institution closes. Teach-out plans
provide important information to the Department and States in the event
of a school closure; thus, it protects students and taxpayers for
institutions to have these plans on file when the institution is
provisionally certified. The number of institutions on HCM2 or subject
to an action under subpart G of the General Provisions consistently
remains small compared with the number of provisionally certified
institutions. Keeping in mind a teach-out plan acts as a preventive
measure, we do not agree with the commenter that limiting the
requirement to such a small number of institutions would help us
achieve the desired outcome. We seek, instead, to identify institutions
at risk for closure and ensure that a plan is in place so that the
Department and States can assist students in transitioning to new
programs and accessing their academic records if their institution
closes.
Changes: None.
Comments: One commenter commended the Department for considering
and including parts of a proposal submitted by negotiators
strengthening teach-out requirements, securing teach-out agreements,
and putting protections in place for students enrolled in schools at
risk of closure, but stated the proposal in the consensus language does
not go far enough in guaranteeing students will have high-quality
teach-out options in the event their school closes. The commenter
offered that the Department should require teach-out agreements, not
make them optional, and we should clearly distinguish when an
institution needs an agreement instead of just a plan. The commenter
further asserted that the Department should require accrediting
agencies to secure teach-out agreements when schools exhibit particular
risk factors. The commenter suggested that, in the event of precipitous
closure, accrediting agencies have routinely requested nothing more
than teach-out plans when an institution exhibits warning signs,
because under current regulations, securing a teach-out agreement is at
the discretion of the agency and almost never results in the agency
requesting a teach-out agreement.
Discussion: We appreciate the strong support from this commenter
and the non-Federal negotiators who worked with us to create a more
robust framework to protect students. While we seek to provide
protections for students affected by a school closure and strive to
assist with the transition to high-quality academic programs, we cannot
guarantee students will have high-quality teach-out options in the
event their school closes. However, teach-out plans can be helpful to
students, States, and the Department when a school closes and we are
trying to help students identify another institution where they can
complete their program and obtain the records they need to document
their attendance or prior degree completion at the closed school.
We do not believe it is possible for either the Department or the
accrediting agencies to force an institution to engage in a teach-out
agreement because such an agreement requires a contractual agreement
between the closing school and a continuing school. Neither the
Department nor an accrediting agency can require a continuing
institution to enter into a teach-out agreement with a closing
institution, and in some instances, the receiving institution in a
teach-out agreement will accept students into some programs but cannot
accommodate students in all programs or can accept some but not all
students into a particular program. Teach-out agreements identify which
students a continuing school will receive, how many credits it will
receive in transfer, and any financial arrangements required to support
the agreement. Neither the Department nor an accrediting agency can
require an institution to accept students or credits from another
institution. Moreover, the statute only requires that institutions have
teach-out plans in place. We recently learned that some accrediting
agencies will not review a teach-out agreement until the closing school
has closed--at which point it may be too late to help students complete
their program. We clarify in this regulation that agencies can and
should request that an institution pursue teach-out agreements and
review teach-out agreements prior to a school's closure. However, we
cannot force an institution to enter into a contract with another
institution, or to accept students into a program for which the
receiving institution believes the transferring students are
underprepared.
Changes: None.
Comments: One commenter expressed concern about the Department's
proposal to remove the required agency review of institutional credit
hour policies as well as the specifics of how an agency meets the
requirements for such review in Sec. 602.24(f).
Discussion: We continue to believe the agency review requirements
are unnecessarily prescriptive and administratively burdensome without
significantly improving accountability or protection for students or
taxpayers. However, we note that the definition of ``credit hour'' in
Sec. 600.2 requires that the amount of student work determined by an
institution to comprise a credit hour be approved by the institution's
accrediting agency or State approval agency. Moreover, nothing
precludes an accrediting agency or State approval agency from examining
or questioning an institution's credit hour policies either as part of
a routine evaluation of that institution's academic programs or as the
result of specific concerns brought to the attention of the accrediting
agency.
Changes: None.
Due Process (Sec. 602.25)
Comments: Several commenters questioned the reasoning behind the
proposed change to due process, stating that the Department did not
explain how the change helps institutions understand accreditation
status decisions. Further, the commenters believed the proposed changes
would not clarify decisions issued by the agency's decision-making body
for institutions or programs. The commenters contended that the
Department should not permit an agency to re-evaluate its original
[[Page 58876]]
decision if an appeals panel reverses it but does not specifically
remand the decision. In such a case, these commenters asserted, no
further agency action should be allowed.
Discussion: We considered views on Sec. 602.25 similar to the
commenters during negotiated rulemaking. The Department believes that
the changes sufficiently satisfy the intent of HEA section 496(a)(6),
which provides that an agency must establish and apply review
procedures throughout the accrediting process that comply with due
process. The Department permits agencies to remand appeals panels'
decisions to the original decision-making body for a final review. In
the event that an agency does remand the decision to the original
decision-making body, the Department believes it is important to
require that the final decision issued by that body be consistent with
the recommendations of the appeals panel.
However, an appeals panel maintains the option to amend an adverse
action, which could involve reaching a different conclusion.
When the agency's appeals panel decides to remand the adverse
action to the original decision-making body, the appeals panel must
provide the institution or program with an explanation for any
determination that differs from that of the original decision-making
body. In the event that the decision is remanded, any decision issued
by the original decision-making body must act in a manner consistent
with the appeals panel's decisions or instructions.
These changes will ensure that institutions or programs receive
full information regarding the decisions pertaining to their
accreditation status, and that decisions remanded back to the original
decision-making body reflect the appeals panel's decision or
recommendation. Additionally, the changes will provide that the
original decision-making body speaks for the agency in addressing
concerns raised in a remand.
Changes: None.
Notification of Accrediting Decisions (Sec. 602.26)
Comments: Several commenters agreed with the proposal in Sec.
602.26(b) to reduce the amount of time within which an accrediting
agency must notify State agencies and the Department regarding any
adverse action taken against an institution so that these entities are
notified at the same time as the institution. One commenter asked for
clarification of the ``same time'' language to ensure that accrediting
agencies adhere to the spirit and intent of the provision.
Discussion: We appreciate the commenters' support of the reduced
time to notify State agencies and the Department and note that the term
``at the same time'' would generally mean within one business day and
is consistent with current regulations.
Changes: None.
Comments: Several commenters agreed with requiring an institution
to disclose adverse actions to current and prospective students within
seven days. However, one commenter noted that disclosures that are
hidden, inaccurate, confusing, or misleading fail to provide students
with the information they need to make informed decisions. The
commenter urged the Department to take steps to ensure that disclosures
required under these regulations provide actual, effective notice and
information that is accurate, meaningful, and actionable to students
who may be unfamiliar with the accreditation system and the meaning of
accreditation decisions and terminology. The commenter also urged the
Department to ensure that the disclosures continue for the duration of
the suspension or other adverse action so that the disclosures are more
likely to reach all relevant students and prospective students.
Discussion: We appreciate the support and suggestions of the
commenters. We believe that providing initial notification within seven
days provides transparency and protection to current and prospective
students. Institutions are expected to maintain that disclosure until
the suspension or adverse action is resolved. Beyond the Department's
regulations, individual agencies often set additional requirements for
how and where this information must be disclosed.
The Department's regulations refer to the requirement that the
agency must disclose the action taken in a manner that is clear,
factual, and timely.
Changes: None.
Comments: One commenter disagreed with the proposed requirement to
reduce the amount of time an accrediting agency has available to inform
State agencies and the Department when an institution voluntarily
withdraws from accreditation or preaccreditation or allows either to
lapse from 30 to 10 days. The commenter stated that 10 days is
unreasonable and places an unnecessary burden on agencies.
Discussion: We appreciate the commenter's concerns; however, we
believe that decreasing the notification timeframe to 10 days provides
needed protections to students and taxpayers. The prompt notification
of these changes is of critical importance to entities responsible for
ensuring an institution's authority to operate or, in the case of the
Department, to ensure that the institution continues to be able to
participate in title IV programs.
Changes: None.
Other Information an Agency Must Provide the Department (Sec. 602.27)
Comments: One commenter disagreed with the proposed elimination of
the requirement that an accrediting agency provide to the Department
any annual report that it produces as well as the change to require an
accrediting agency to consider any contact with the Department as
confidential only where the Department determines a compelling need for
confidentiality. The commenter stated that these changes lack a
reasoned basis. Another commenter agreed with the Department making the
determination regarding confidentiality as it would allow the
Department to determine the appropriate classification under Federal
law.
Discussion: The Department has created monitoring tools that
provide it with more real-time data and information to evaluate an
agency. By the time an agency publishes an annual report, the data is
often stale and unhelpful to the Department. We believe that
eliminating the requirement to provide an annual report does not affect
the Department's ability to monitor agencies and will increase
efficiency and reduce administrative burden.
Changes: None.
Severability (Sec. 602.29)
Comments: None.
Discussion: We have added Sec. 602.29 to clarify that if a court
holds any part of the regulations for part 602, subpart B invalid,
whether an individual section or language within a section, the
remainder would still be in effect. We believe that each of the
provisions discussed in this preamble serve one or more important,
related, but distinct, purposes. Each provision provides a distinct
value to the Department, the public, taxpayers, the Federal government,
and institutions separate from, and in addition to, the value provided
by the other provisions.
Changes: We have added Sec. 602.29 to make clear that the
regulations are designed to operate independently of each other and to
convey the Department's intent that the potential invalidity of one
provision should not affect the remainder of the provisions.
[[Page 58877]]
Activities Covered by Recognition Procedures (Sec. 602.30)
Comments: One commenter objected to the Department's proposal to
eliminate this provision. The commenter argued that, although the
Department stated that the provisions in the current regulations in
this section duplicate other regulatory provisions, we have failed to
identify which sections in part 602 cover these activities. The
commenter asserted that this is because these sections do not exist.
Discussion: The recognition activities procedures that we removed
in Sec. 602.30 duplicate provisions in Sec. Sec. 602.31(a),
602.31(b), 602.31(c), 602.19(e), and 602.33. The sections are
referenced within Sec. 602.30 in the current regulations and are
contained within these regulations at the same cited locations.
Changes: None.
Agency Submissions to the Department (Sec. 602.31)
Comments: Several commenters disagreed with proposed changes to
Sec. 602.31(a)(2). One commenter stated that the Department's proposal
to eliminate a requirement that accrediting agencies submit not only
documentation of compliance with the recognition criteria, but also
evidence that the agency ``effectively applies those criteria''
conflicts with the statute as it requires that the Secretary limit,
suspend, terminate, or require an agency to come into compliance if she
determines that an accrediting agency or association has failed to
effectively apply the criteria. Another commenter noted that this is a
fundamental part of the application process.
Discussion: The changes to Sec. 602.31(a)(2) continue to require
the agency to provide documentation as evidence that the agency
complies with the criteria for recognition listed in subpart B of this
part, including a copy of its policies and procedures manual and its
accreditation standards. The Department staff will analyze the
information submitted, in accordance with the procedures described in
Sec. 602.32, which include the current requirement to assess
observations from site visits to gauge the efficacy of the agency's
application of the criteria, rather than a simple attestation of that
fact in the documentation submitted by the agency. In keeping with the
statutory requirement, if the Secretary determines that an accrediting
agency or association has failed to effectively apply the criteria in
this section, or is otherwise not in compliance with the requirements
of this section, the Secretary will limit, suspend, or terminate the
Department's recognition, or require an agency to come into compliance.
The regulations also recognize that, in some instances, an agency
may not have the need to apply a particular policy, standard, or
procedure during its recognition review period. In such instances, the
agency should not be found to be noncompliant if it has the appropriate
policy in place but has not yet had the need to implement it. For
example, if no institution during the five-year review period has
appealed a negative decision, the agency cannot prove that it follows
its appeal procedures, but this does not indicate that the agency is
noncompliant. However, if the agency has had occasion to implement a
given policy, it must do so effectively.
Changes: None.
Comments: Commenters agreed that accrediting agencies should redact
submissions of personally identifiable information (PII) and other
sensitive information to prevent public disclosure of PII while
facilitating access to documentation. One commenter stated that the
Department should better identify what it means by PII before it
requires agencies to perform the redaction.
Discussion: We thank the commenters for their support on this
proposed change. We believe that those who work with ``personally
identifiable information'' generally understand what it includes, which
is any data that could potentially identify a specific individual.
PII is defined in 2 CFR 200.79 as information that can be used to
distinguish or trace an individual's identity, either alone or when
combined with other personal or identifying information that is linked
or linkable to a specific individual. Some information that is
considered to be PII is available in public sources such as telephone
books, public websites, and university listings. This type of
information is considered to be Public PII and includes, for example,
first and last name, address, work telephone number, email address,
home telephone number, and general educational credentials. The
definition of PII is not anchored to any single category of information
or technology. Rather, it requires a case-by-case assessment of the
specific risk that an individual can be identified. Non-PII can become
PII whenever additional information is made publicly available, in any
medium and from any source, that, when combined with other available
information, could be used to identify an individual. We do not believe
that we need to further define PII.
Changes: None.
Comments: Another commenter stated that changing the timeframe to
reapply for recognition to 24 months prior to the date on which the
current recognition expires is unreasonable noting that in 24 months
the information provided may be out of date. The commenter contended
that the reason for the change likely has to do with understaffing at
the Department.
Discussion: The Department disagrees with the commenter. To the
contrary, the 24-month timeframe provides ample opportunity for an
agency, if found deficient in its policies and procedures, to update
them as necessary to meet the Department's requirements. It also
affords Department staff the opportunity to follow an individual
accreditation decision from beginning to end, meaning that staff can
observe both the site visit and the final agency decision for a single
institution.
The current timeframe makes it impossible for staff to observe the
decision-making body considering the same institution for which the
staff observed a site visit. Agencies will be able to provide the
Department with information if updates occur during the 24-month
period. Presently, there is no stated timeframe in the regulations, and
providing 24 months allows the Department to perform a more thorough
review of the agency and its activities. It also provides the agency
sufficient time to make corrections to policies and procedures in order
to come into compliance.
Changes: None.
Comments: One commenter noted that the Department proposes moving
aspects of the recognition process to an on-site review, but it
provides no explanation of how it will ensure adequate maintenance of
records. The commenter asserted that this lack of records, which will
impede NACIQI in its ability to review the record for its decision and
shield the Department from accountability, violates the law.
Discussion: We appreciate the commenter's concerns. Department
staff will document the on-site review, including a description of
documents reviewed, an explanation of how those documents support the
staff finding, and in the event of a negative finding, will require
staff to make copies or upload a sample of documents that provide
evidence to support a staff finding or recommendation. This will be
included in the agency review and will be provided to NACIQI for their
review of the agency.
[[Page 58878]]
The Department proposed this change in methodology in response to
recommendations made by the Office of the Inspector General (OIG or IG)
in its June 27, 2018 report, U.S. Department of Education's Recognition
and Oversight of Accrediting Agencies.\26\ The OIG report expressed
concern that agencies are able to provide examples of their best work
in deciding on their own which documents to include as evidence in
their petition for recognition or renewal of recognition. Instead, OIG
recommended a representative sample of documents that accurately
reflect a complete picture of the agency's work. Moreover, the IG
expressed concern that staff do not review an appropriate number of
institutional or programmatic decisions relative to the number of
institutions or programs the agency accredits.
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\26\ www2.ed.gov/about/offices/list/oig/auditreports/fy2018/a09r0003.pdf.
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The IG recommended that the accreditation group use risk-based
procedures and readily available information to identify the specific
institutions and an appropriate number of institutions that each agency
must use as evidence to demonstrate that it had effective mechanisms
for evaluating an institution's compliance with accreditation standards
before reaching an accreditation decision.
The IG further recommended that the OPE accreditation group adopt
written policies and procedures for evaluating agency recognition
petitions that incorporate the elements of the recommendation described
above and address specific documentation requirements to include each
selected school's complete self-study report and the agency's site
visit report and decision letter; and adopt a risk-based methodology,
using readily available information, to identify high-risk agencies and
prioritize its oversight of those agencies during the recognition
period. These regulations and the June 2019 update to the Accreditation
Handbook achieve these objectives.
The Department is concerned that already petitions include tens of
thousands of pages and adding to the size of petitions creates a number
of practical challenges including demands of agency and staff time. As
a result, the Department has determined that by receiving lists of
upcoming accreditation decisions 24 months in advance of the
recognition decision, staff will have more opportunities to participate
in site visits or observe agency decisions regarding institutions that
have demonstrated risk characteristics. In addition, by performing an
on-site review, staff can review sections or excerpts of more
documents, meaning that their review will include consideration of a
larger number of member institution or program files.
Changes: None.
Procedures for Department Review of Applications for Recognition or for
Change of Scope, Compliance Reports, and Increases in Enrollment (Sec.
602.32)
Comments: Commenters stated that the Department should continue its
practice of having career staff provide a draft report to agencies it
reviews because the Department provides no reason to eliminate the
practice.
Discussion: The regulations provide that, if an agency is required
to be reviewed by the NACIQI under Sec. 602.19(e), the Department will
follow the process outlined in Sec. 602.32(a) through (h) which
includes a provision for a draft report to the agency. However, the
regulations do not require staff to make a preliminary recommendation
regarding an agency's recognition status at the time of issuing a draft
report. Only after considering the agency's response to the draft staff
report, including additional evidence provided by the agency, and
performing its on-site review(s) should staff make a recommendation
regarding an agency's recognition status.
Changes: None.
Comments: One commenter stated that under proposed Sec. 602.32(b),
the Department would only require that an accrediting agency provide
letters from educators and institutions to show wide acceptance of the
agency. However, the commenter suggested that both of those parties may
have a conflict of interest in providing acceptance of the agency if
they are an institution or work for an institution that is accredited
by the agency. Further, the commenter stated that the requirement to
show wide acceptance was not only applicable to initial approval, but
also re-recognition. The commenter suggested that letters should not be
used if all three come from the same institution and that the
Department should justify why this provision should not apply to
continued recognition.
Discussion: We appreciate the comments on this topic; however, once
an agency has been recognized, the fact that it has member institutions
serves as evidence that the agency is valued by institutions and
educators. It is important to request support from educators and
institutions during the review of an application for initial
recognition since the Department needs to be sure that the agency is
likely to maintain a healthy membership and is not being created for
the purpose of accrediting a single institution. We believe the
original widely accepted standard in Sec. 602.13 was too subjective
and was unclear about how many letters would be required to meet the
standard. In some instances, agencies submitted multiple documents in
support of their wide acceptance, yet staff found the agency to be out
of compliance. In addition, this requirement could be used
strategically by educators, licensing boards, and other agencies to
block competition either among institutions or within the labor pool by
narrowing available opportunities or the number of individuals who
qualify for them. It is also possible that an agency that accredits a
small number of programs or institutions could be a reliable authority
on institutional quality, but because of the narrow scope of its work,
lacks wide acceptance outside of the institutions for which it provides
accreditation due to a lack of knowledge about the area by others, or
due to philosophical differences in approach. The proposed change would
streamline the current wide acceptance requirement while keeping
guardrails for the initial recognition of an agency by ensuring they
can demonstrate acceptance from the constituencies most relevant to
them. The Department expects that letters of support reflect the wide
variety of constituencies the agency serves but does not believe one-
size-fits-all regulatory requirements align with statutory authority,
nor would they improve accrediting agency quality. The Department
believes this requirement is most appropriate during initial
recognition because it helps validate that there is a need for a newly
recognized agency.
Changes: None.
Comments: One commenter stated that the current Sec. 602.32(d)
specifies that final judgments on the merits by a court or
administrative agency in complaints or legal actions against an
accrediting agency are determinative of compliance. The commenter
stated that the proposal to merely consider such final judgments is a
significant change to the Department's procedures, and that the
Department's explanation that the proposed change reflected the view of
the Department and several committee members did not provide a
justification that meets the burden of the APA.
Discussion: Current Sec. 602.32(d) specifies that ``Department
staff's evaluation of an agency may also include a review of
information directly related to institutions or programs accredited or
preaccredited by the
[[Page 58879]]
agency relative to their compliance with the agency's standards, the
effectiveness of the standards, and the agency's application of those
standards.'' The proposed change in this section does not substantively
change this requirement. Moreover, there is no mention of the results
of a final judgment on the merits by a court or administrative agency
anywhere in the current regulations in part 602. The language
referenced in the new regulations at Sec. 602.32(d)(2) states that
complaints or legal actions against an accredited or preaccredited
institution or programs accredited or preaccredited by the agency may
be considered but are not necessarily determinative of compliance. This
change was necessary to ensure that institutions and agencies have due
process rights and benefit from the presumption of innocence such that
allegations alone do not suffice as evidence of noncompliance.
Changes: None.
Comments: One commenter requested that the Department clarify what
is meant, in Sec. 602.32(e), by the statement: ``that the agency was
part of a concerted effort to unnecessarily restrict the qualifications
necessary for a student to sit for a licensure or certification
examination or otherwise be eligible for entry into a profession.''
Another stated that the Department provided no evidence that
unnecessary qualifications are being imposed on students to sit for
licensure or for certification and that the Department is trying to
link the changes in Sec. 602.32(e) and (k) in order to prevent
accrediting agencies from working with licensing bodies and States to
prohibit discrimination.
Discussion: The purpose of the change is to limit symbiotic
relationships between accrediting agencies, institutions, and licensing
boards, which together may limit access to professions by increasing
education requirements without regard for consumer cost to the benefit
of agencies, institutions, and licensing boards.
The Department views such behavior as anticompetitive and contrary
to the spirit, if not letter, of the ``separate and independent''
provisions in HEA section 496 as well as to basic fairness and the
goals of the HEA, namely, to expand opportunity to Americans.
In other instances, accrediting agencies may have formed such a
close relationship with licensing boards that there is no opportunity
for a new agency to form. Licensing boards may require individuals to
have graduated from an institution approved by a specific accrediting
agency to qualify for licensure. As a result, institutions--who want
their graduates to obtain licensure--would not choose an agency who
could not fulfill that licensure obligation. It may be difficult to
sanction an agency that is the only agency providing the programmatic
accreditation necessary for a graduate's entry into the workforce.
Again, the Department places far greater importance on the acquisition
of knowledge and skills than on how such knowledge and skills were
acquired.
Changes: None.
Comments: One commenter stated that the Department failed to give
an example, in connection with proposed Sec. 602.32(e), of how an
accrediting agency deprived a faith-based institution of accreditation
because of its religious mission. The commenter stated that proposed
Sec. 602.32(e) would allow faith-based institutions to have their own
accrediting agency, questioned what quality controls would exist for
such an agency, and asserted that faith-based institutions should be
required to adhere to the same academic standards as secular schools.
Another commenter stated that the proposed regulations were not clear
as to when an institution could make a complaint to the Department that
its mission had been a negative factor in an accrediting agency's
decision which could lead to confusion for accrediting agencies.
Discussion: We believe the commenters may have intended to refer to
Sec. 602.18(b)(3) rather than Sec. 602.32(e). Although the Department
does not have evidence that faith-based institutions have been deprived
of accreditation because of their religious missions, we have seen
instances in which agencies have proposed changes to their standards
that would have prevented those institutions from following the tenets
of their faith. Faith-based institutions were successful in blocking
those changes, but if the accrediting agency had not been responsive to
the requests of its faith-based members, the change could have
interfered with the mission of a number of faith-based institutions.
The Free Exercise clause of the Constitution requires the
Department to ensure that faith-based institutions are not deprived of
access to Federal programs because of the exercise of their religious
rights. A number of faith-based institutions have expressed concern to
the Department that, while accreditation has ultimately been granted,
some agencies have used accreditation to force institutions to
implement policies and practices that may align with popular opinion,
but may not be consistent with the tenets of their faith. Likewise,
RFRA requires that the Federal government not substantially burden
religious exercise unless it is the least restrictive means of
furthering a compelling government interest. We are taking proactive
steps to ensure that discrimination does not occur against faith-based
institutions because of their religious exercise. Agencies that
accredit faith-based institutions must meet the same standards to
obtain recognition from the Secretary that are applicable to all
accrediting agencies seeking the Secretary's recognition. All
institutions have access to an existing complaint process that provides
an opportunity for institutions to raise their concerns, including
concerns about respect for their missions, to the Department. These
regulations do not change the existing complaint process.
Change: None.
Comments: One commenter stated that, because the regulations do not
specify how many or which criteria the accrediting agency must meet to
be substantially compliant, the proposed regulations may allow an
agency to be out of compliance with multiple criteria and still be a
gatekeeper for Federal aid. Two commenters agreed with allowing an
agency to continue to be recognized if it was in ``substantial
compliance'' because it would allow an agency a four-year grace period
to resolve any regulatory lapse, and, as one commenter noted, the
language also ensures the unfettered ability of Department staff to re-
escalate an issue, should it prove more serious than initially
determined. The commenter also noted that the Department would only use
the designation in cases where an agency achieved compliance in all but
a technical sense.
Discussion: The Department disagrees with the commenter who stated
that the ``substantial compliance'' standard would allow a noncompliant
agency to continue to be recognized. An agency that is out of
compliance would not be found to be substantially compliant. However,
in some instances an agency may have been acting in accordance with the
Department's requirements but may have a written policy that does not
clearly articulate every aspect of the agency's policies or procedures.
In other instances, the agency may have the correct policy in place and
mostly acted in accordance with the policy but may be found to have a
limited number of instances when special circumstances or employee
error resulted in the agency deviating from its written policy. In
other instances, a missing signature or the use of language that is not
precisely the same as the language in the Department's regulations
could result in a finding of noncompliance although
[[Page 58880]]
the agency's actions meet the Department's requirements.
As one commenter noted, the proposed language regarding the use of
monitoring reports for agencies that are substantially compliant
relates to situations where there were technical compliance issues, but
the agencies were meeting the spirit of the requirements. Section 602.3
makes clear that a monitoring report is required to be submitted by an
agency to Department staff when the agency is found to be substantially
compliant but needs to make a minor correction to its policies or
practices. The report must contain documentation to demonstrate that
the agency is implementing its current or corrected policies, or that
the agency, which is compliant in practice, has updated its policies to
align with those compliant practices.
Changes: We have made no changes as a result of this comment.
However, we have modified Sec. 602.32 by condensing paragraphs (j)
through (m), removing redundant language, including removing proposed
Sec. 602.32(k), which was identical to proposed Sec. 602.32(e), and
clarifying the process Department staff follow in their review of
applications for recognition or for change of scope, compliance
reports, and increases in enrollment.
Procedures for Review of Agencies During the Period of Recognition
(Sec. 602.33)
Comments: Several commentators stated that the proposed rules
regarding the application process would make it more difficult for the
Department to remove ineffective accrediting agencies that serve as
gatekeepers for title IV aid. One commenter stated that the concept of
a monitoring report for accrediting agencies that are ``substantially
in compliance'' rather than fully meeting all requirements was a broad
term that had no basis in statute. The commenter stated that the
process would allow Department staff to make decisions without full
transparency and public accountability versus a ``typical full agency
review.''
Discussion: The Department's intention in introducing the
monitoring report is to enable accrediting agencies to more effectively
resolve instances of minor exceptions to full compliance. Furthermore,
we believe that the use of monitoring reports will increase the
likelihood of identifying and correcting minor problems before they
become larger problems.
An accrediting agency that is failing to meet the Department's
criteria for recognition remains subject to withdrawal of recognition.
The Department has not yielded its authority or forfeited its
responsibility for assuring that accrediting agencies are qualified
gatekeepers of title IV aid. While the statute does not specify
``substantial compliance'' as a status for accrediting agency
recognition, it does not preclude the Secretary from making this
designation and for many years substantial compliance was the standard
used by the Department during recognition reviews. The introduction of
the monitoring report and designation of substantial compliance
provides the Department with more efficient and effective tools and
methods to address minor deviations in process or procedures to ensure
full compliance. It is also important to note that the monitoring
report increases the level of transparency for recognition or
accreditation decisions as it provides evidence that any minor
omissions or inconsistencies are resolved, and that policies and
procedures are put in place to prevent future inconsistencies. The
monitoring report will be employed in situations where the accrediting
agency is substantially compliant and requires only minor actions or
sufficient time to come into full compliance.
Changes: None.
Comments: Regarding proposed changes to Sec. 602.33(c), one
commenter stated that an on-site ``spot check'' of records during a
visit may not be sufficient to understand an agency's full body of work
during a review period. The commenter also noted that the Department
must also have sufficient staff to handle the workload should these
rule changes increase the number of agencies that need to be reviewed
and monitored. The commenter supported the provisions that require the
Department, for issues that cannot be resolved by Department staff, to
seek public comment, make a recommendation to NACIQI, and, ultimately,
refer the issue for Secretarial action; however, the commenter felt
that the Department's decision to continue or not continue monitoring
should also be public. One commenter stated that the Department should
do more to monitor competition between accrediting agencies.
Discussion: We disagree that the provisions of Sec. 602.33(c)
constitute a ``spot check.'' The regulations will require the
Department staff to conduct a thorough review and analysis of
identified areas of concern or inconsistency. The on-site review is
designed to increase the quality and scope of documents staff review,
based on institutions or actions selected by staff, while reducing the
burden of uploading thousands of pages of documents that may not be
responsive to staff's specific concerns or questions. We appreciate the
commenter's support for the provisions that require escalation of
unresolved issues to NACIQI and believe that this process affords
sufficient and appropriate transparency to the public. In response to
the commenter who believed the Department should make its decision
regarding the continuation of monitoring public, we reiterate that we
will use the monitoring report for minor omissions or inconsistencies
that we do not believe are cause for public concern.
The Department seeks to acknowledge and correct even small
deviations from standard practice to ensure that they are resolved
before becoming larger problems, while at the same time not creating
unnecessary work for the agency or taking time from a NACIQI meeting
that would be better spent focusing on agencies with more serious
compliance concerns.
With regard to the commenter's concern that these regulations will
reduce the stringency of the Department's oversight, we believe instead
that these new regulations provide greater opportunities for the
Department to take necessary action against an accrediting agency. For
example, when institutions were limited to selecting an agency based on
their location, and entire regions of the country were accredited by a
single accrediting agency, the Department would have been reluctant to
withdraw recognition from a regional accrediting agency, leaving an
entire region of the country without a comprehensive institutional
accrediting agency. The Department believes there is always a small
risk that some agencies may feel pressured to lower standards in order
to attract more member institutions. However, the Department does not
believe this risk will grow as a result of these regulations and, as
always, will be vigilant in monitoring agencies that insufficiently
monitor the quality of the institutions and programs they oversee. The
Department believes that by reducing unnecessary administrative burden
from the recognition process, accrediting agencies can devote more time
and resources to their primary responsibility of overseeing
institutional quality and the student experience.
The Department will perform risk-based analysis and review of
agencies, including between official renewal of recognition activities,
when we detect signs of risk through our various monitoring and program
review activities. Through these revised processes, the Department
believes it will be able to more effectively identify
[[Page 58881]]
and act against agencies that may be at risk of reducing rigor and
causing harm to students and taxpayers.
Changes: None.
Comments: One commenter stated that the Department proposes
eliminating a requirement that it review an agency at any time at the
request of the NACIQI and that it does not mention this change in the
NPRM. The commenter stated that the Department provides no reasoning or
justification and appears not to have discussed this change during the
rulemaking. The commenter stated that it is particularly problematic
given the proposal to conduct monitoring reports without input or
review from NACIQI.
Discussion: The regulations do not eliminate an investigation at
the request of NACIQI. This requirement is addressed in Sec.
602.33(a)(2), which requires Department staff to act on information
that appears credible and raises concerns relevant to the criteria for
recognition. Thus, if NACIQI were to make a credible request, based on
evidence of risk, the Department staff would act on this request and
initiate a review or investigation.
Changes: None.
Senior Department Official's (SDO's) Decision (Sec. 602.36)
Comments: A few commenters opposed the additions to the types of
decisions the SDO may make in Sec. 602.36(e), such as approving
agencies for recognition and approving recognition with a monitoring
report. These commenters feared the change would impede the
Department's ability to perform an appropriate oversight function over
accrediting agencies. Additionally, these commenters believed this
change would conceal important monitoring of agencies not only from
NACIQI, but also from the public. These commenters requested that the
Department abandon these changes and fully review and evaluate
accrediting agency performance.
Discussion: The Department believes that creating required
monitoring reports provides an additional tool to ensure accrediting
agency compliance with recognition criteria. Under the current
regulations, when the Department identifies minor omissions or
inconsistencies in an agency's standards, policies, or procedures, the
Department may not take action because the required action would be
unjustifiably severe. On the other hand, the Department has sometimes
determined a seasoned accrediting agency to be noncompliant because a
single form was left unsigned or changes in board membership
temporarily change the ratio of board participants. By adding the
substantial compliance determination and a required monitoring report,
the Department has the opportunity to award continuing recognition and
continue to address minor irregularities or omissions. We will restrict
the use of the monitoring report to instances when an agency has
demonstrated substantial compliance and limit its use to low-risk
situations. The monitoring report, for example, could include
documentation to show that an agency has updated its written policies
and procedures to align with its current practice, to ensure that
controls have been put in place to make sure that all documents are
properly signed, or to demonstrate that minor deviations that were made
in order to accommodate students in unusual circumstances have not
become standard practice.
The decisions of the SDO are predicated on demonstrated compliance
or substantial compliance with the criteria for recognition listed in
subpart B of this part. Those decisions do include a wide range of
determinations including, but not limited to, approving for
recognition; approving with a monitoring report; denying, limiting,
suspending, or terminating recognition; granting or denying an
application for an expansion of scope; revising or affirming the scope
of the agency; or continuing recognition pending submission and review
of a compliance report. These decisions are based on the SDO's
assessment of the agency's petition for recognition, Accreditation
Group staff analysis and agency response, and the NACIQI review.
Changes: None.
Comments: A few commenters also criticized the changes in Sec.
602.36(e) and (f) that allow the SDO to determine that an agency is
compliant or substantially compliant. These commenters expressed
concern that a determination of substantial compliance represents a
weakening of protections or the allowance of agency inaction.
A few commenters specifically disagreed with the change in Sec.
602.36(e)(1)(i) allowing the SDO to determine that the agency has
demonstrated compliance with a standard when an agency has required
policies and procedures in place but has not had an opportunity to
apply them. These commenters believed that this change violates the
HEA, which they claimed requires the Department to act within 12 months
or remove the agency's recognition if it does not comply or effectively
apply required criteria. One commenter suggested that agencies could
continually create new standards to avoid a Department finding for
failure to follow their standards. Two commenters suggested that the
Department withdraw this change.
Discussion: We disagree with the commenters who argued against
allowing the SDO to determine an agency to be compliant or
substantially compliant. The provision still requires that the SDO make
a compliance determination. We do not believe that this weakens the
standard. Instead, we believe it allows the SDO to raise concerns about
even small irregularities or omissions, and require the agency to
resolve them, while at the same time allowing NACIQI to focus their
time on agencies with clear areas of noncompliance.
We also disagree with the commenters who opposed allowing the SDO
to determine that an agency demonstrated compliance when the agency had
the required policies and procedures in place but had not had the
opportunity to apply them. We do not believe it is appropriate to
penalize an accrediting agency that has the appropriate policies in
place but has not had the need or opportunity to apply those policies
during the review period. For example, a small accrediting agency may
have policies in place to evaluate an expansion of scope at a member
institution to include distance learning, but it may have no members
that participate in distance learning or that add distance learning
during the review period. Similarly, an agency may have a change-of-
control policy in place, but it may not have had an institution that
requested consideration of a change-of-control during the review
period, and the agency would have had no need to implement the policy.
Accrediting agencies with a small number of members may have few or
even no institutions that go through an initial accreditation or
renewal of accreditation review during the agency's five-year
recognition review period since agencies typically accredit
institutions every 10 years.
The Department believes that this is consistent with statute, which
requires an agency to have accredited or preaccredited only one
institution prior to being eligible for recognition. It is unlikely
that an accrediting agency would be required to implement all of its
policies in the course of accrediting or preaccrediting a single
institution, which makes it clear that Congress did not expect that
each agency would be required to implement every policy during each
review cycle. This is not a change in policy because staff have
considered these instances to meet the standard for compliance;
however, the
[[Page 58882]]
Department seeks to codify this practice in these regulations.
To be clear, this policy does not ignore instances when an agency
elected to ignore a problem and not implement its written policies, but
instead takes into account that agencies may not need to exercise every
one of its policies during a five-year review period, and that is not a
violation of the requirements of the HEA. In such a case, the
Department will review the policies and procedures in place to be sure
they comply with the Department's requirements. In addition, as soon as
the need to apply that policy arises, the agency will be required to
notify the Department so that the Department has the opportunity to
conduct an evaluation of the agency's application of the policy. The
agency has not failed to comply if it has not had the need or
opportunity to apply a particular policy, as long as it has a policy in
place and implements it properly if and when the need arises.
Changes: None.
Severability (Sec. 602.39)
Comments: None.
Discussion: We have added Sec. 602.39 to make clear that, if any
part of the regulations for part 602, subpart C, whether an individual
section or language within a section, is held invalid by a court, the
remainder would still be in effect. We believe that each of the
provisions discussed in this preamble serve one or more important,
related, but distinct, purposes. Each provision provides a distinct
value to the Department, the public, taxpayers, the Federal government,
and institutions separate from, and in addition to, the value provided
by the other provisions.
Changes: We have added Sec. 602.39 to make clear that the
regulations are designed to operate independently of each other and to
convey the Department's intent that the potential invalidity of one
provision should not affect the remainder of the provisions.
Secretary's Recognition Procedures for State Agencies
Criteria for State Agencies (Sec. 603.24)
Comments: One commenter supported the Department's removal of the
requirement for State agencies that function as accrediting agencies to
review and evaluate institutions' credit hour policies. This commenter
agreed with the Department that the requirement adds burden without
evidence of increased accountability, benefit to taxpayers, or
assistance to students.
Discussion: We thank the commenter for the support of the removal
of this provision. We believe that it is beneficial to reduce burden
when it does not jeopardize accountability.
Changes: None.
Comments: One commenter challenged the Department's assertion that
the requirements were ``overly prescriptive'' and did not agree that
State agencies functioning as accrediting agencies needed fewer
restrictions in this area.
Discussion: The Department maintains its position that the
requirements in Sec. 603.24(c) to review policies related to credit
hours are overly prescriptive and that the State agency serving as an
accrediting agency should have autonomy and flexibility to work with
institutions in developing and applying credit-hour policies. This
change does not, as some commenters suggested, remove all oversight of
institutions in this area (see the discussion above related to Sec.
602.24). Instead, it provides for more flexibility and treats State
agencies that serve as accrediting agencies the same as other agencies.
Changes: None.
Severability (Sec. 603.25)
Comments: None.
Discussion: We have added Sec. 603.25 to clarify that if a court
holds any part of the regulations for part 603, subpart B, invalid,
whether an individual section or language within a section, the
remainder would still be in effect. We believe that each of the
provisions discussed in this preamble serve one or more important,
related, but distinct, purposes. Each provision provides a distinct
value to the Department, the public, taxpayers, the Federal government,
and institutions separate from, and in addition to, the value provided
by the other provisions.
Changes: We have added Sec. 603.25 to make clear that the
regulations are designed to operate independently of each other and to
convey the Department's intent that the potential invalidity of one
provision should not affect the remainder of the provisions.
Standards for Participation in the Title IV, HEA Programs
End of an Institution's Participation (Sec. 668.26)
Comments: Several commenters supported allowing institutions to
award and disburse title IV aid for up to 120 days following the end an
institution's eligibility. These commenters noted that this would allow
more students to complete their academic programs at the institution
they selected without the disruption involved in relocating to another
institution. One commenter also expressed that this change benefits
closing institutions by providing continuity and strong operations
through a closure.
Discussion: We thank the commenters who supported the provision
allowing a school to allow students an opportunity to complete their
academic program at their chosen institution if they can do so within
120 days. This minimizes disruption and allows for greater flexibility
for students and for institutions--especially those who planned an
orderly closure.
The Department realized that, as written, Sec. 668.26(e)(1) could
be read by some to permit an institution that no longer participates in
title IV programs to continue receiving title IV aid. Instead, the
Department's intent was a desire to enable the Secretary to allow an
institution to continue participating in title IV programs for up to
120 days after a State, an accrediting agency, or the Department has
made the decision to remove State authorization, accreditation, or
title IV participation, but defers the effective date of that decision.
Comments: One commenter generally supported this provision but also
expressed concern that the Department would not allow for more than 120
days of funding following the decision to end an institution's
participation. This commenter suggested alternative language that
outlined parameters for which an institution would retain funding.
These suggestions included disbursing only to students who were already
enrolled when the institution announced its closure, disbursing only to
students who had already completed at least 50 percent of the academic
program, allowing disbursements only for institutions that were
voluntarily withdrawing from participation in the title IV programs,
and requiring the accrediting agency to approve the teach-out. These
conditions, in the commenter's opinion, provided for what the commenter
believed was the Department's intent--allowing for students to receive
funding during an orderly closure of an institution.
Discussion: We appreciate the support from the commenter and note
that we have revised Sec. 668.26 to more clearly articulate the need
for the State authorizing agency, accrediting agency, and Department to
all agree that the institution has the capacity to conduct an orderly
teach-out based on the teach-out plan provided by the institution. We
note that we had addressed most of the
[[Page 58883]]
concerns expressed in the NPRM; however, we agree that additional
assurances by each member of the triad are needed to provide an
appropriate teach-out opportunity to students. To reiterate, in our
proposal, we imposed numerous requirements on institutions that wish to
avail themselves of the flexibility afforded by this provision. Most
importantly, the Secretary may permit the institution to continue to
originate, award, or disburse title IV, HEA program funds following a
State authorizing agency or accrediting agency's decision to withdraw,
suspend, or terminate State authorization or accreditation in
circumstances when such a decision has a deferred effective date, and
only if the State authorizing agency and accrediting agency agree that
the cause of the probation or termination decision would not prevent
the institution from engaging in an orderly teach-out. Note, however,
that this is permissible only in certain circumstances and only with
agreement from an institution's State authorizing agency and
accrediting agency. In addition, the permission to originate, award, or
disburse funds may not extend beyond the delayed effective date of the
withdrawal, suspension, or termination decision, or 120 days following
that decision, whichever is earlier.
We require the institution to notify the Secretary of its plans to
conduct an orderly closure and teach-out in accordance with accrediting
agency requirements. Additionally, we compel the institution to
continue to follow the terms and conditions of the program
participation agreement.
Finally, we limited the disbursements to enrolled students who
could complete the program within the 120 days following the date of a
final, non-appealable decision by State authorizing agency to remove
State authorization, an accrediting agency to withdraw, suspend, or
terminate accreditation, or the Secretary to end the institution's
participation in title IV, HEA programs. Students would also be able to
transfer to a new institution. To further protect both students and
taxpayers, the Secretary together with the institution's State
authorizing agency and accrediting agency must determine that with
continuing title IV resources the institution is able to carry out a
teach-out, and that the cause for the withdrawal, termination, or
suspension of State authorization or accreditation would not prevent
the institution from conducting a high-quality teach-out. For example,
an accrediting agency could make the decision to withdraw accreditation
because an institution does not meet the agency's requirements for
long-term financial viability; however, the institution may still have
sufficient resources if title IV participation continues to provide a
teach-out that meets the requirements of the approved teach-out plan.
We did not limit the provision to those who voluntarily withdrew
from participation in the title IV programs. We believe that in those
instances institutions are already permitted to continue to participate
in title IV programs until the end of the approved teach-out plan or
until such time that the institution is no longer providing a teach-out
opportunity that meets the requirements of the teach-out plan.
We agree that it is important for the State authorizing agency and
the accrediting agency, not the institution itself, to determine
regulatory requirements. We believe this adds additional assurances
that the commenter thought were important.
We do not agree with the commenter who believed that we need to
provide for additional time beyond the 120 days after a decision to end
participation in the title IV programs. We note that an institution
executing an orderly closure has not ended its participation in the
title IV programs by announcing a future closure. As an example, if an
institution announces in July that it will operate for one more
academic year and close at the end of its spring semester (which ends
the following May), the institution continues to participate in the
title IV programs and continues to receive title IV funds without the
possible extension that may be available under this provision.
Changes: The Department has added language to clarify that, in the
event that the State authorizing agency or accrediting agency has made
the decision to withdraw, suspend, or terminate accreditation or
authorization, the Secretary may consider granting the institution the
120-day teach-out opportunity only if the institution's State
authorizing agency and accrediting agency agree that the cause for that
negative action would not prevent the institution from conducting an
orderly teach-out.
Comments: Several other commenters opposed the Department providing
title IV funds to students to allow them to complete a teach out for up
to 120 days after a decision to end an institution's title IV
eligibility. These commenters expressed serious concern about loosening
standards for schools, expecting taxpayers to spend additional money to
fund them, and preventing students from obtaining closed school
discharges.
Discussion: We disagree with the commenters who believe that the
goal of this provision is to avoid closed school discharges. The
Department reiterates that the Secretary may--but is not required to--
allow the use of this option in the event that the State authorizing
agency makes the decision to end authorization, or the accrediting
agency makes the decision to terminate, suspend, or withdraw
accreditation, or the Department makes the decision to end the
institution's title IV participation, but only with the agreement of
the State authorizing agency and the institution's accrediting agency.
This maximum 120-day extension of participation would be provided only
when the institution demonstrates the capacity to administer title IV
funds appropriately and provide a high-quality teach-out experience.
Additionally, students who meet the closed school discharge
requirements, and who did not opt to participate in the teach-out,
would still be eligible for a closed school loan discharge as would
students who agreed to participate in the teach-out in instances in
which the institution does not fulfill the requirements of the teach-
out plan and meet the other requirements. A student who elects to
participate in a teach-out, and then fails to complete the courses that
were part of the student's teach-out agreement due to no fault of the
institution, would not be eligible for a closed school loan discharge.
The Department will not permit an institution to continue to
participate in title IV after a decision has been made by the State
authorizing agency, the accrediting agency, or the Department to remove
authorization, accreditation, or to end title IV participation, without
first confirming with the institution's accrediting agency and State
authorizing agency that the institution has the capacity to conduct the
120-day teach-out, and that the reason for the withdrawal, termination,
or suspension of State authorization or accreditation does not prevent
the institution from completing an orderly teach-out.
Only those students who are enrolled will be able to participate in
the teach-out either to complete their program or to transfer to a new
institution. The institution would not be permitted to advertise or
enroll new students during the 120-day period, in accordance with Sec.
668.26(e)(1)(iii).
Changes: We have revised Sec. 668.26(e)(1) to clarify that the
provision for continued participation in title IV, HEA programs, for up
to 120 days must precede the point at which the Secretary terminates
the institution's program participation agreement; to
[[Page 58884]]
clarify that a student may take credits for the purpose of transferring
to another institution; and to provide other clarifying and conforming
edits.
In addition, we have modified Sec. 668.26(e)(2) to cross-reference
the regulations that address misrepresentation to students by the
institution regarding the teach-out plan or teach-out agreement.
Severability (Sec. 668.29)
Comments: None.
Discussion: We have added Sec. 668.29 to clarify that if a court
holds any part of the regulations for part 668, subpart B, invalid,
whether an individual section or language within a section, the
remainder would still be in effect. We believe that each of the
provisions discussed in this preamble serve one or more important,
related, but distinct, purposes. Each provision provides a distinct
value to the Department, the public, taxpayers, the Federal government,
and institutions separate from, and in addition to, the value provided
by the other provisions.
Changes: We have added Sec. 668.29 to make clear that the
regulations are designed to operate independently of each other and to
convey the Department's intent that the potential invalidity of one
provision should not affect the remainder of the provisions.
Reporting and Disclosure of Information (Sec. 668.41)
Comments: Multiple commenters opposed the proposed changes to the
job placement rate disclosures. Many of those specifically opposed the
change that would require an institution to disclose any placement rate
it calculates. Those commenters also opposed the elimination of a
requirement that institutions identify the source, timeframe, and
methodology of the job placement rates they do disclose. One commenter
suggested that by changing the requirements, an institution is likely
to cherry pick the best calculations to disclose to students.
Additionally, that commenter said that Federal funds should not support
students in academic programs related to employment requiring licensure
if the program does not meet the licensure requirements in a given
State. Another commenter who opposed changes to the job placement
disclosure requirements stated that placement rates are the most
commonly inaccurate or misleading advertisements for academic programs.
Another commenter stated that the Department did not justify why an
institution is not required to disclose any job placement rate
calculated at the behest of a State authorizer or accrediting agency.
Discussion: The Department does not believe that the changes to the
job placement rate disclosures will weaken protections to students. The
Department believes that, if an institution uses a job placement rate
in its advertising for students, or if an institution's accrediting
agency or State requires the calculation of a job placement rate, the
institution should be required to disclose those rates publicly.
However, the Department agrees with the commenter that job placement
rates are subject to inaccuracies and inconsistencies due to the
reliance on self-reported data and the myriad methods used to calculate
these rates. The Department believes that requiring institutions to
disclose any job placement rates they calculate may cause institutions
to simply calculate such rates less often or publish rates based on
flawed methodologies or surveys that have an insufficient survey
response rate. Required disclosure of any calculated job placement rate
may yield unintended consequences, including diminishing institutions'
willingness to examine ways to improve their program's placement rates
or requiring the disclosure of data to students and prospective
students that could be incomplete, invalid, or unreliable. The
Department believes institutions should have the right to utilize
internal data to diagnose and address program weaknesses and that this
flexibility will benefit students.
The Department disagrees with the commenter who claims institutions
will disclose only positive calculations to students. The Department
believes that institutions will work to improve their programs when job
placement rates reflect poor results. Improving programs will help
students, who will benefit from stronger programs and better job
options after completion.
There are other regulations that prohibit misrepresentation in
advertising, including any misrepresentation of job placement rates
used by an institution in advertisements.
The Department believes that the regulations at Sec.
668.41(d)(5)(ii) that require an institution to identify the source of
the information provided in job placement rates is duplicative of the
requirement in Sec. 668.41(d)(5)(i) that informs institutions that
they may provide this disclosure using the institution's placement rate
for any program based on data from State data systems, alumni or
student satisfaction surveys, or other relevant sources and, as a
result, is unnecessary. The changes made to this regulation do not
prohibit institutions from providing students the calculation method
they used to determine their published job placement rates.
The Department also disagrees with the commenter who stated that
programs that do not lead to licensure or certification should not be
eligible to participate in the title IV programs. Students may wish to
enroll in programs with no intention of attaining licensure or
certification in that field and should retain the right to do so as
long as they are aware of the limitations of the program. The
Department also notes that, in Sec. 668.43(a)(14), the regulations
require the disclosure of any placement rates calculated and reported
to the institution's accrediting agency or State, if the agency or the
State requires them.
Changes: None.
Institutional Information (Sec. 668.43)
Comments: Many commenters encouraged the Department to maintain
strong disclosure requirements for institutions to help level the
information playing field between students and institutions.
One commenter recommended that the Department require institutions
to share all disclosures through ``appropriate publications, mailings
or electronic media,'' rather than having disclosures be ``readily
available.'' That commenter continued by stating that the Department
should develop requirements that preclude institutions from burying
disclosures on a website with a lengthy list of other disclosures.
Discussion: The Department thanks those commenters that encouraged
the Department to maintain strong disclosure requirements for
institutions. The Department continues to believe that providing
disclosures on all programs that lead to licensure or certification,
regardless of instructional modality, is the best way to ensure that
all students are aware of the program's ability to prepare the student
to sit for licensure or certification exams or qualify for licensure or
certification.
While the Department would applaud any institution that exceeds the
requirement for making these required disclosures, the Department
remains committed to requiring only that institutions have them
``readily available.'' This is consistent with the statutory
requirements for information dissemination activities in HEA section
485(a)(1).
Changes: None.
Comments: Multiple commenters expressed support for a disclosure
related to transfer credit policies,
[[Page 58885]]
suggesting that this change may encourage institutions to discontinue
the practice of awarding transfer credit solely on the source of
accreditation or tax status of the sending program or institution. The
commenters stated that having credit transfer policy disclosures will
provide transparency for students and help to ensure that institutions
do not deny students a fair and fulsome evaluation of their earned
academic credits.
One commenter recommended that the Department also require this
disclosure to be made to part-time students. Another commenter
suggested that all accredited institutions' academic credits should be
transferable because accredited institutions must meet established
standards for course content, quality, and rigor.
Discussion: The Department thanks those commenters who supported
the Department's inclusion of a transfer credit disclosure. The
Department views this requirement as necessary to ensure transparency
to institutional policies related to transfer credits. The Department
agrees that part-time students should also receive this disclosure.
The Department does not have the authority to require institutions
to accept academic credits earned at an accredited institution because
the authority for that determination resides with the institution. The
Department of Education Organization Act of 1979 (Pub. L. 96-88)
prohibits the Department from dictating such matters.
Changes: None.
Comments: Multiple commenters opposed the inclusion of a transfer
credit disclosure, including one commenter who stated that it would be
duplicative and unnecessary for an institution to include in its
transfer credit policy the disclosure of any types of institutions from
which they will not accept credit. One commenter stated that this
disclosure would interfere with academic review of credits by faculty
members and would result in students receiving a poorer quality
education from their programs. Another commenter stated that the
disclosure would strip institutions of the autonomy to independently
determine the transferability of credit and force institutions to
accept credit from institutions that the accepting institution finds to
be academically substandard.
Discussion: The Department does not believe it is duplicative to
require institutions to list any types of institutions from which the
institution will not accept credits when also providing a description
of the transfer credit policies. It is in the best interest of students
to receive information about whether their credits will or will not
transfer prior to attempting to transfer. Providing transparency to
students regarding an institution's transfer credit policies will
improve their ability to make informed enrollment decisions. In some
cases, these disclosures will reduce the instances of students having
to retake coursework or take additional courses after transferring to
an institution that will not accept their previously earned credits.
This requirement will not interfere with the academic review of a
student's transfer courses or result in students who are less prepared
academically. The Department is not requiring institutions to adopt a
particular policy but is requiring institutions to disclose their
policies and practices; it is vitally important for students to know if
an institution categorically rejects credits based on the accrediting
agency or tax status of other institutions.
This disclosure has no impact on the academic review of credits by
faculty members, or the autonomy to independently determine the
transferability of credit. Moreover, it does not force institutions to
accept credit from institutions that the accepting institution finds to
be, as the commenter noted, academically ``substandard.'' The
disclosure simply requires institutions to inform prospective students
of any institutions or types of institutions from which it will not
consider the transferability of earned academic credits.
Comments: Multiple commenters expressed support for the inclusion
of a requirement that institutions disclose to students whether their
educational programs meet the requirements for licensure across States
so that a student will know if their investment in an educational
program will lead to the career the student intends to pursue. One
commenter stated that this provision would encourage institutions to
conduct research regarding whether their programs fulfill requirements
for State licensure, and that it is vitally important for students to
have as much information on State licensure as they can obtain. Another
commenter called this a ``common-sense requirement'' that will help
prospective students from wasting money on programs that will not lead
to licensure.
Discussion: The Department thanks those commenters who expressed
support for the inclusion of licensure and certification disclosures.
The Department continues to encourage institutions to determine if
their programs meet licensure requirements and hopes that these
regulations will encourage institutions to conduct such research.
The Department acknowledges, however, that, in some instances, it
can be difficult to ascertain the requirements for licensure or
certification in certain States, and that States sometimes have
conflicting requirements, which means that the institution may not be
able to make the determination in every State or develop programs that
meet the requirements of all States.
Changes: None.
Comments: Many commenters opposed the Department requiring
institutions to disclose if a program meets a State's licensure or
certification requirements. One commenter noted that students have as
much access to State licensure requirements as institutions do. Another
commenter opined that requiring institutions to assess whether a
program meets the educational requirements for licensure or
certification for employment in an occupation (Sec. 668.43(a)(5)(v))
should be removed because the disclosure is not required by the HEA and
it places an undue burden on institutions.
One commenter who opposed the inclusion of licensure disclosures
asserted that many students do not want licensure and to require an
institution to disclose this information creates undue burden to them
for a reason that is not always the case. The same commenter opined
that to obtain information on licensure and certification is difficult
because the appropriate agencies do not always respond timely to
inquiries. This commenter expressed concern that this disclosure
requirement may discourage institutions from offering programs that
lead to a career that requires licensure or certification because of
the extra work this disclosure requirement would cause.
Another commenter suggested that instead of requiring institutions
to determine whether their program meets the requirements for State
licensure or certification, the Department should require the States to
make it easier to find and follow the State's licensure requirements.
One commenter noted that the Department should reconsider its use
of the student's location in determining the correct location for a
licensure disclosure because a student may not plan to obtain licensure
in the same location that the student is taking their courses. Another
commenter requested that the Department go beyond requiring disclosure
of whether programs meet State licensure requirements and require that
all programs meet State licensure
[[Page 58886]]
requirements in all States where the institution offers the program.
One commenter asked whether the Department means to permit an
institution to continue to advertise a program based on whether the
program would fulfill educational requirements for licensure or
certification, but allow the institution to only make a disclosure to
students on whether the institution had not made such a determination.
The commenter was concerned that this would allow an institution to
advertise misleading or inaccurate information about whether a program
meets licensure or certification requirements.
One commenter asked for advice on how to successfully comply with
this requirement when many boards will not confirm whether the program
meets licensure requirements until individuals apply for licensure or
certification. Another commenter asked for clarification on what
programs provide licensure or certification and would be bound by the
licensure and certification disclosures. The commenter asked whether an
accounting program that meets the requirements to sit for the Certified
Public Accounting exam only in some States the program is offered in,
but does not meet the qualifications to sit for that exam in other
States, should be held to the licensure and certification disclosure.
Another commenter encouraged the Department to retain the
requirement for an institution to provide direct disclosures,
especially related to when a program does not meet the licensure and
certification requirements for a State.
Discussion: The regulations do not require an institution to make
an independent determination about whether the program it offers meets
the licensure or certification requirements; the regulations provide
that an institution may disclose that it has not made a determination
as to whether a program's curriculum meets a State's educational
requirements for licensure or certification. Including that option
provides sufficient flexibility so that an institution need not incur
any additional burden.
The Department agrees that students may have the same access to
State licensure and certification requirements as an institution;
however, students may not have access to the requisite information to
determine whether the program meets those requirements without
assistance from program experts at the institution.
The requirements in Sec. 668.43(a)(2) are for all programs that
lead to licensure or certification, or that should lead to licensure or
certification, regardless of whether these programs are offered through
distance learning, through correspondence courses, at brick-and-mortar
institutions, or through another modality.
While the Department believes that students who enroll in programs
that do not meet licensure and certification requirements for a State
could still be title IV eligible, the Department also believes that an
institution should disclose this information to all individuals who
enroll in these programs so that they are making an informed enrollment
choice. The Department does not believe that this disclosure will
dissuade institutions from offering legitimate academic programs that
may lead to State licensure or certification since, absent confirmation
of the program's alignment with licensure requirements, the institution
can simply notify a student that they have not determined whether its
program meets those requirements. If an institution opts to not confirm
whether a program meets the requirements for a State because it enrolls
a small percentage of students in that State, the institution will
remain compliant by disclosing that it has not made a determination.
The Department understands that students may not plan to obtain
licensure where they have established their location of record with the
institution. However, the institution has an obligation to make this
disclosure to students based on the students' current location.
Additionally, we believe the term ``located'' will minimize confusion
related to State legal residence requirements and is the term most
commonly used by States in policies related to distance education.
The Department requires institutions to only advertise true and
factual statements about their programs. While the Department does not
preclude an institution from advertising a program for which it has not
made a determination regarding the program's alignment with State
licensure or certification requirements, the Department expects that
institutions will accurately and truthfully provide that information on
the required disclosure.
Regarding the timing of these disclosures, the Department expects
that the institution will provide this disclosure before a student
signs an enrollment agreement or, in the event that an institution does
not provide an enrollment agreement, before the student makes a
financial commitment to the institution. The Department further expects
that an institution will determine a student's ``location'' based on
its published policies, and that the location may include the address
provided by the student at the time of enrollment or at any point when
the student notifies the institution in writing of a change in location
to a new State.
The Department does not believe these regulations will limit the
States in which an institution may recruit students since the
institution can simply state that it has not determined whether the
program meets State licensure or certification requirements in that
State. However, the Department concedes that institutions that do make
that determination may have a marketing advantage, since it might
better inform student choice.
The Department notes that these regulations require direct
disclosures to students regarding licensure and certification as
described in Sec. 668.43(c) and has not removed that requirement
entirely; rather, the Department has clarified that this direct
disclosure may be through email or other forms of electronic
communication.
Changes: None.
Comments: Another commenter stated that they support this
requirement but requested additional time for institutions to become
compliant. Multiple commenters requested a delay of at least three
years after the effective date of the regulations and contended that,
since ``brick-and-mortar'' programs were not previously subject to this
type of requirement, it would not be feasible to comply by July 1,
2020. Another commenter asked whether an institution must comply with
both the current regulations, effective as of July 1, 2018, or the new
regulations, which will become effective on July 1, 2020. The commenter
argued that the creation of two different processes to comply with two
separate regulations would be extremely burdensome to the institution.
Discussion: It is the Department's view that institutions do not
require additional time to become compliant with the licensure or
certification disclosure since an institution can comply with this
disclosure requirement by informing students that it has not made a
determination about whether its programs meet the licensure or
certification requirements for a State. If the institution later makes
a determination that its program does not meet a State's requirements
for licensure or certification, it must disclose this fact. Therefore,
the Department believes institutions can comply with this provision by
July 1, 2020. Until July 1, 2020, an institution must comply with the
disclosure requirements of the State
[[Page 58887]]
Authorization regulations published on December 19, 2016.
Changes: None.
Comments: Multiple commenters were supportive of the use of the
term ``location'' when used for disclosures on licensure or
certification, but asked for clarification on when, specifically, the
Department considers an individual to be enrolled at the institution.
One commenter also asked for clarification on what is meant by ``formal
receipt of change of address by a student'' as it pertains to this
disclosure. Another commenter stated that he supported the Department's
willingness to allow institutions to use their own policies to
determine a student's location.
Discussion: The institution determines the student's location at
the time of initial enrollment based on the information provided by the
student, and upon receipt of information from the student that their
location has changed, in accordance with the institution's procedures.
Institutions may, however, develop procedures for determining student
location that are best suited to their organization and the student
population they serve. For instance, institutions may make different
determinations for different groups of students, such as undergraduate
versus graduate students.
Changes: None.
Comments: One commenter strongly supported the Department's
proposal to require an institution to disclose information about teach-
out plans.
Discussion: The Department appreciates the support of the commenter
and believes that requiring disclosures about an institution's teach-
out plans and why an accrediting agency is requiring an institution to
maintain one is an important disclosure for a student to receive.
Changes: None.
Comments: Multiple commenters raised concerns about the lack of
specificity regarding what ``actions'' among the many actions that
could be taken against an institution would require notification under
the proposed rule, and what kind of ``notice'' would be sufficient to
comply with this regulation.
In particular, one commenter stated that there are several types of
notice, all of which might be legally sufficient depending on the
circumstances, but nevertheless would reflect different approaches by
institutions to meeting the standard.
Several other commenters, in addition to asking what constitutes
sufficient notice, asked for greater clarity concerning which actions
rise to the level of requiring notification. Another commenter pointed
out that damage could be done to an institution as a result of a
notification requirement, if the institution is required to supply
notice of an investigation, action, or prosecution by a law enforcement
agency before the investigation is complete and concerns are
substantiated, and that such damage could be unjustified to the extent
that the concerns are not ultimately substantiated. These commenters
did not directly oppose the requirement that institutions disclose
adverse actions against them, as proposed in Sec. 668.43(a)(20), but
instead sought clarification regarding which actions rise to the level
that requires notice.
One commenter noted the general burden on institutions given the
number of disclosures already required of institutions.
Other commenters supported the inclusion of disclosures related to
investigations conducted by a law enforcement agency for issues related
to academic quality, misrepresentation, or fraud. One commenter sought
to ensure that the proposed rulemaking includes actions from law
enforcement agencies, attorney general offices, or state authorization
entities so that all investigations that could impact an institution's
state authorization are included.
Discussion: As a matter of first principles, the Department
believes a student is entitled to transparency and robust disclosure of
pending legal actions by law enforcement agencies but realizes
unwarranted allegations could impact the student's ability to complete
their education or diminish the value of their education. The
Department believes that legal actions that bear on an institution's
accreditation, State authorization, or continuing participation under
title IV are the types of legal actions that have the greatest
potential to impact students. Therefore, by this rule, the Department
seeks to ensure that these categories of legal actions are fully
disclosed to students.
The Department recognizes, in light of comments that it received,
that the disclosure language provided in this section of the NPRM lacks
the necessary specificity to guide institutions as they grapple with
the practical challenges of determining which actions should result in
notification and how that disclosure should be made. The use of terms
such as ``actions'' and ``other severe matter[s]'' would result in
unnecessary and inappropriate ambiguity.
The Department agrees that it must more clearly define which
categories of ``actions'' are subject to a notification requirement.
The Department also agrees with commenters that notification
requirements that sweep in unproven allegations could cause
reputational and financial injury to an institution, prevent a current
student from completing their education, deter new enrollments in or
transfers to the institutions, or discourage students from enrolling in
a program that could benefit them. Disclosure of a government
investigation that might not even lead to allegations of misconduct
against an institution could create significant negative consequences,
including for students and alumni.
Therefore, we are revising the regulations to eliminate
investigations from the notification requirement, and better define
what types of legal actions do require disclosure. Our goal is to
ensure that students have access to information about pending legal
proceedings, including those resulting from allegations of fraud or
misrepresentation. This information may have the greatest potential to
impact a student's education--including on their ability to make an
informed choice about which school to attend, to complete a degree or
program at a school they have chosen, or to subsequently benefit from
an earned credential, without its value being inappropriately
undermined by as-yet-unproven allegations. To strike this balance, in
the final rule we provide that institutions must disclose only pending
enforcement actions or prosecutions by law enforcement agencies in
which a final judgment against the institution, if rendered, would
result in an adverse action by an accrediting agency, revocation of
State authorization, or limitation, suspension, or termination of
eligibility to participate in title IV.
Carving out the fact of investigations also protects students and
graduates from having the value of their education or their chances of
obtaining employment diminished merely because their educational
institutions were subject to government investigations. While
notification of pending enforcement actions or prosecution by a law
enforcement agency could be useful to students to avoid enrolling at
institutions that may be guilty of misrepresentation, the Department
must balance this with damage that potential students could suffer if
unfounded allegations against an institution deter students from
enrolling in a program that would otherwise benefit them. In addition,
the Department must balance the need to protect students against fraud
and misrepresentation with the need to ensure that the value of a
student's credential and their future
[[Page 58888]]
employability are not unnecessarily diminished by false allegations
against the institution.
This disclosure requirement, although it involves only disclosure
to students and not reporting to the Secretary or a trigger for a
letter of credit, mirrors the approach the Department took in its final
2019 Borrower Defense to Repayment (BD) rule. In the 2019 BD rule, in
eliminating some mandatory triggers for letters of credit based on
pending claims and non-final judgments, the Department recognized the
inappropriateness of imposing sanctions upon an institution based on
unproven allegations. The Department also learned, as a result of the
2016 BD rule, that requiring institutions to report to the Department
all legal actions against them, without regard for materiality, created
undue regulatory burden much larger than the level of burden estimated
in the final 2016 BD rule. Relying on allegations or claims made
against an institution to require an institution to provide a letter of
credit also invites abuse and denies institutions due process by
placing undue weight on unsubstantiated claims. Here, the Department is
requiring institutions to focus on specific types of legal action--
enforcement actions and prosecutions--by a specific set of governmental
entities--law enforcement agencies--that could have the most
significant negative impact on students, therefore enabling them to
make informed enrollment decisions.
In this final regulation, disclosure is required only for
enforcement actions and prosecutions, including those resulting from
allegations of fraud or misrepresentation, where the institution can
discern (based on the nature of the allegations and the progress of the
case) that, if a final judgment is rendered against the institution,
the institution's accreditor would take an adverse action against the
institution, its State authorization would be revoked, or its title IV
participation would be limited, suspended, or terminated. We have
removed actions relating to ``academic quality'' from the list of
actions requiring disclosure since accreditors and State authorizers
are charged with making quality determinations, not State or Federal
law enforcement agencies. Also, consistent with the 2019 BD rule, the
Department is limiting the risks of abuse and denial of due process to
institutions--by excluding the mere fact that an institution is under
investigation from the disclosure requirement.
We appreciate those commenters who agreed with the Department's
inclusion of a disclosure requirement but asked that we clarify what a
legally sufficient disclosure would look like. The Department agrees
that greater clarity is necessary; however, this provision is part of a
long list of items that must be disclosed by the institution and made
readily available to enrolled and prospective students. The Department
provides no additional guidance regarding how it must make those
disclosures. Many institutions meet these requirements by including
these disclosures on their website or in their catalog.
Changes: In response to comments, we have revised Sec.
668.43(a)(20) to provide that an institution must disclose enforcement
actions or prosecutions by law enforcement agencies that, upon a final
judgment, would result in an adverse action by an accrediting agency,
revocation of State authorization, or suspension, limitation or
termination of eligibility to participate in title IV. Investigations
that have not progressed to pending enforcement actions or prosecutions
need not be disclosed--regardless of their subject matter.
Comments: One commenter supported the Department's proposal to
require institutions to disclose written arrangements in the program
description in instances in which they are used to engage a non-
accredited entity in providing portions of the program.
Two commenters supported the Department's proposal to disclose the
criteria used by institutions when evaluating prior learning experience
stating that it is important to ensure that credits awarded based on a
prior learning assessment are based on academic quality, which benefits
students and the public. Another commenter noted that this disclosure
can help improve academic completion while reducing education costs.
Discussion: The Department thanks the commenter for their support
for disclosing written arrangements included in a program's
description, as proposed in Sec. 668.43(a)(12). The Department
continues to believe that standardizing the location of this disclosure
will provide uniform information to all students and provide them with
easily accessible and discernable information in which to make
enrollment decisions.
The Department also thanks the commenters for their support for the
requirement that institutions disclose their policies for evaluating
and assigning credit based on a student's prior learning experience, as
outlined in Sec. 668.43(a)(11)(iii). The Department continues to
believe that this information is important to inform student choice
since students often learn only after enrolling at a new institution
that credits they believed they would earn through prior learning
assessment are no longer being considered or granted. In addition,
institutions should publish their policies regarding the acceptance of
credits in transfer that were awarded through prior learning
assessment. The Department believes this will also encourage
institutions to potentially save students and taxpayers time and money.
The Department disagrees with the characterization that it removed
the requirements of disclosing a complaint process to students. To the
contrary, the Department continues to require institutions to provide
students with information about how to file a complaint against the
institution with a relevant State agency. However, the regulations no
longer require an institution to publish the complaint processes for
both the State in which the student is located and the State in which
the institution is located, as long as it discloses at least one point
of contact for filing student complaints.
The Department's final regulations require institutions to provide
students or prospective students with contact information for filing
complaints with its accrediting agency and with at least one relevant
State agency or official, either in the State in which the institution
is located or in the State in which the student is located, or a third
party identified by a State or a State reciprocity agreement, with whom
the student can file a complaint.
Changes: None.
Institutional Disclosures for Distance or Correspondence Programs
(Sec. 668.50)
Comments: Many commenters supported removing the requirements of
Sec. 668.50 and proposing similar requirements in Sec. 668.43(b)
because they supported providing disclosures to all students,
regardless of the program's mode of delivery.
One commenter opposed removal of Sec. 668.50 stating that the
Department was deleting most of the disclosure requirements for
distance education programs. They further claimed that we only moved
two disclosure requirements to Sec. 668.43.
One commenter disagreed with the explanation provided in the NPRM
that the deletion of refund policies in Sec. 668.50 eliminated a
duplicative requirement already required under Sec. 668.42(a)(2). The
commenter stated that Sec. 668.42(a)(2) does not require the
disclosure of refund policies.
[[Page 58889]]
One commenter stated they disagreed with statements made regarding
the requirements included in Sec. 668.50. Specifically, they disagreed
that the requirement to disclose adverse actions taken by a State or
accrediting agency would be unnecessary. Instead, the commenter stated
that these actions should be disclosed because those actions would
generally lead to the program's ineligibility to participate in the
title IV, HEA programs. The commenter stated that the definition of
``adverse actions'' differed depending on the accrediting agency and
that some of those actions would be at the level of information
gathering, or probation, which would not end in the loss of title IV
eligibility. Another commenter provided similar thoughts by stating
that an institution required to supply notice of an investigation,
action, or prosecution may damage the institution if it must provide
that notification prior to the completion of an investigation. However,
another commenter recommended that the Department keep the required
disclosure on adverse actions from accrediting agencies because they
may directly affect a student's ability to obtain a professional
license. One commenter opposed the removal of the requirement that an
institution disclose adverse actions taken by an accrediting agency
because there are often times when an accrediting agency takes an
adverse action that stops short of stripping an institution of its
title IV eligibility and that students deserve to know when an
institution fails to meet the very standards that makes it eligible for
title IV participation. That same commenter also requested that the
Department define the term ``adverse action'' from a State rather than
removing the requirement.
One commenter voiced support for a requirement to disclose adverse
actions taken by a State or accrediting agency.
Discussion: The Department appreciates the support of those who
supported removing Sec. 668.50 and replacing those requirements with
one that applies to all programs that lead to licensure or
certification (or should lead to licensure or certification),
regardless of the delivery modality of those programs. The Department
believes this will provide all students with valuable information and
necessary protections. However, the Department notes by moving
disclosures from Sec. 668.50, which only applied to distance education
programs and correspondence courses, to Sec. 668.43, which applies to
all title IV eligible programs at institutions of higher education, the
Department broadened the scope of these requirements so that more
students can make informed enrollment decisions.
The Department agrees with and thanks the commenter that noted it
made an incorrect reference to current regulations requiring an
institution to disclose refund policies. The Department meant to cite
Sec. 668.43(a)(2) instead of Sec. 668.42(a)(2) as the section which
requires institutions to disclose their refund policies. Section
668.43(a)(2) requires that institutions make readily available to
enrolled and prospective students any refund policy with which the
institution must comply for the return of unearned tuition and fees, or
other refundable portions of costs paid to the institution. This covers
the requirements of Sec. 668.50(b)(6), which required institutions to
disclose refund policies for the return of unearned tuition and fees
with which the institution must comply under the laws of any State in
which enrolled students reside.
The Department also notes that disclosures related to adverse
actions are now described at Sec. 668.43(a)(20), which requires an
institution that an institution must disclose enforcement actions or
prosecutions by law enforcement agencies that, upon a final judgment,
would result in an adverse action by an accrediting agency, revocation
of State authorization, or suspension, limitation or termination of
eligibility to participate in title IV. Investigations that have not
progressed to pending enforcement actions or prosecutions need not be
disclosed--regardless of their subject matter. We respond to further
comments about adverse actions in that section.
The Department has retained the language in Sec. 602.24(c)(8)(ii)
that an agency must not permit an institution to serve as a teach-out
institution, if it is under investigation relating to academic quality,
misrepresentation, fraud, or other severe matters by a law enforcement
agency. We would consider an allegation or finding of criminal conduct,
for example, to constitute a severe matter. The Department retains this
language because of the contractual relationship between the closing
institution and the teach-out institution, as well as the fact that the
teach-out agreement must be approved by the accrediting agency, all of
which give the teach-out institution the appearance of a preferred and
streamlined option for students, and the teach-out institution benefits
from an influx of new students. The Department has determined that to
enjoy that benefit, the teach-out institution must not be subject to
any ongoing investigation, as described in Sec. 602.24(c)(8)(ii). The
Department believes that teach-out agreements constitute a unique and
limited circumstance and, accordingly, has retained the consensus
language excluding institutions that are subject to investigation as
teach-out institutions.\27\
---------------------------------------------------------------------------
\27\ Note: Nothing in Sec. 602.24(c)(8)(ii) or anything in this
document burdens, limits, or impedes the Department's determinations
in, or interpretations of, the Institutional Accountability
regulations at 84 FR 49788.
---------------------------------------------------------------------------
The Department stands by its assessment that disclosures of adverse
actions taken by accrediting agencies often came too late to inform
student enrollment decisions. As such, the final regulations at Sec.
668.43(a)(19) require that if an accrediting agency requires an
institution to maintain a teach-out plan, the institution must disclose
the reason that the accrediting agency required such a plan. The
Department believes this will assist students who are considering
enrollment in programs where institutions may be in danger of closing
or losing accreditation by informing them of this risk. On the other
hand, some students may find teach-out plans to be reassuring on the
basis that, should an institution close, there are options available to
them to complete their programs.
The institution is not precluded, as is also the case in the 2016
State authorization regulations, from providing information to students
about any investigation, action, or prosecution and any disagreement
that the institution has with the validity of these allegations. While
the Department understands that adverse actions from an accrediting
agency may impact a student's ability to obtain professional licensure,
the Department believes the proposed disclosure in Sec. 668.43(a)(19)
addresses this concern and broadens it to accommodate all programs, not
just those offered through distance or correspondence education. The
Department emphasizes that, similar to requiring a letter of credit,
requiring a teach-out plan does not necessarily mean that an
institution will close, lose its accreditation, or lose its title IV
eligibility; however, the teach-out plan will provide additional
protections to students and taxpayers in the event that the institution
does lose accreditation, State authorization, or title IV eligibility.
The Department believes that Sec. 668.43(a)(20) provides appropriate
protection to students when the institution's or program's accrediting
agency takes negative action, and provides clarifying details about the
kinds of adverse actions that must be disclosed. However, in moving the
requirement to Sec. 668.43, the Department requires institutions to
provide the
[[Page 58890]]
disclosure to students enrolled in all programs, not just distance
education or correspondence programs.
The Department thanks the commenter that supported the Department's
changes to Sec. 668.50.
Finally, we note that the amendatory instruction to remove Sec.
668.50 was unintentionally omitted from the NPRM.
Changes:
Comments: None.
Discussion: As described above, we believe that the substance of
current Sec. 668.50 should be removed. In its place, we have added
language to clarify that, if any part of the regulations for part 668,
subpart D, whether an individual section or language within a section,
is held invalid by a court, the remainder would still be in effect. We
believe that each of the provisions discussed in this preamble serve
one or more important, related, but distinct, purposes. Each provision
provides a distinct value to the Department, the public, taxpayers, the
Federal government, and institutions separate from, and in addition to,
the value provided by the other provisions.
Changes: We have revised Sec. 668.50 to remove the current text
and added, in its place, text that clarified that the regulations are
designed to operate independently of each other and to convey the
Department's intent that the potential invalidity of one provision
should not affect the remainder of the provisions.
Severability (Sec. 668.198)
Comments: None.
Discussion: We have added Sec. 668.198 to clarify that if a court
holds any part of the regulations for part 668, subpart M, invalid,
whether an individual section or language within a section, the
remainder would still be in effect. We believe that each of the
provisions discussed in this preamble serve one or more important,
related, but distinct, purposes. Each provision provides a distinct
value to the Department, the public, taxpayers, the Federal government,
and institutions separate from, and in addition to, the value provided
by the other provisions.
Changes: We have added Sec. 668.198 to make clear that the
regulations are designed to operate independently of each other and to
convey the Department's intent that the potential invalidity of one
provision should not affect the remainder of the provisions.
Executive Orders 12866, 13563, and 13771
Regulatory Impact Analysis
Under Executive Order 12866, it must be determined whether this
regulatory action is ``significant'' and, therefore, subject to the
requirements of the Executive order and subject to review by the Office
of Management and Budget (OMB). Section 3(f) of Executive Order 12866
defines a ``significant regulatory action'' as an action likely to
result in a rule that may--
(1) Have an annual effect on the economy of $100 million or more,
or adversely affect a sector of the economy, productivity, competition,
jobs, the environment, public health or safety, or State, local, or
Tribal governments or communities in a material way (also referred to
as an ``economically significant'' rule);
(2) Create serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) Materially alter the budgetary impacts of entitlement grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
(4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles stated in the
Executive order.
This final rule is an economically significant action and will have
an annual effect on the economy of more than $100 million because the
proposed changes to the accreditation process could increase student
access, improve student mobility, and allow for the establishment of
more innovative programs, including direct assessment programs, that
may attract new students. According to the Department's FY 2020 Budget
Summary, Federal Direct Loans and Pell Grants accounted for almost $124
billion in new aid available in 2018. Given this scale of Federal
student aid amounts disbursed yearly, even small percentage changes
could produce transfers between the Federal government and students of
more than $100 million on an annualized basis.
Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
the Office of Information and Regulatory Affairs designated this rule
as a ``major rule,'' as defined by 5 U.S.C. 804(2).
This final rule is considered an E.O. 13771 deregulatory action. We
estimate that this rule will generate approximately $16.0 million in
annualized net PRA costs at a 7 percent discount rate, discounted to a
2016 equivalent, over a perpetual time horizon. While there will be
some PRA burden increase, we believe the greater effect of this
regulation is to allow for additional entrants or enhanced competition
in the postsecondary accreditation market and to promote innovation in
higher education and it is deregulatory.
As required by Executive Order 13563, the Department has assessed
the potential costs and benefits, both quantitative and qualitative, of
this regulatory action, and we are issuing these final regulations only
on a reasoned determination that their benefits justify their costs. In
choosing among alternative regulatory approaches, we selected those
approaches that maximize net benefits. Based on the analysis that
follows, the Department believes that the regulations are consistent
with the principles in Executive Order 13563.
We also have determined that this regulatory action does not unduly
interfere with State, local, or Tribal governments in the exercise of
their governmental functions.
In accordance with the Executive orders, the Department has
assessed the potential costs and benefits, both quantitative and
qualitative, of this regulatory action. The potential costs associated
with this regulatory action are those resulting from statutory
requirements and those we have determined as necessary for
administering the Department's programs and activities.
In this regulatory impact analysis, we discuss the need for
regulatory action, the potential costs and benefits, net budget
impacts, assumptions, limitations, and data sources, as well as
regulatory alternatives we considered.
Elsewhere in this section, under Paperwork Reduction Act of 1995,
we identify and explain burdens specifically associated with
information collection requirements.
Need for Regulatory Action
These final regulations address several topics, primarily related
to accreditation and innovation. The Department issues these
regulations primarily to update the Department's accreditation
recognition process to reflect only those requirements that are
critical to assessing the quality of an institution and its programs
and to protect student and taxpayer investments in order to reduce
unnecessary burden on institutions and accrediting agencies and allow
for greater innovation and educational choice for students.
In addition, these final regulations are needed to strengthen the
regulatory triad by more clearly defining the roles and
responsibilities of accrediting agencies, States, and the Department in
[[Page 58891]]
oversight of institutions participating in title IV, HEA programs.
These final regulations revise the definition of ``State authorization
reciprocity agreement'' to clarify that such agreements cannot prohibit
any member State of the agreement from enforcing its own general-
purpose State laws and regulations outside of the State authorization
of distance education.
Another area addressed in these final regulations is the definition
of ``religious mission'' as a published institutional mission that is
approved by the governing body of an institution of postsecondary
education and that includes, refers to, or is predicated upon religious
tenets, beliefs, or teachings. These final regulations require
accrediting agencies to consistently apply and enforce standards that
respect the stated mission of the institution, including religious
mission, and to not use not use as a negative factor the institution's
religious mission-based policies, decisions, and practices in the areas
covered by Sec. [thinsp]602.16(a)(1)(ii), (iii), (iv), (vi), and
(vii).
Summary of Comments on the RIA
A number of commenters raised points about the analysis of these
regulations in the NPRM. The Department summarizes and responds to
comments related to the RIA here.
Comments: One commenter noted that the expense incurred by their
accrediting agency to submit a recognition application was not
unreasonable under the current regulations and while they agreed
generally with the review process changes, they did not see the
proposed changes as entirely justified.
Discussion: The Department thanks the commenter and welcomes the
feedback. The Department believes the changes are justified for the
numerous reasons outlined in the NPRM and elsewhere in this document.
While the Department appreciates that some accrediting agencies can
manage the existing burden, other agencies are struggling to do so or,
at the very least, could redirect resources away from paperwork burden
and towards direct work with the institutions or programs the agency
oversees. The Department has received petitions for renewal of
recognition that exceed 60,000 pages. Also, these new regulations
provide staff the opportunity to randomly select files to review, and
to perform oversight that includes a more representative sample and
variety of documents--and not only those that an agency decides to
submit.
The Department also, as stated elsewhere, believes that a number of
the current regulations prevent competition, create unnecessarily high
barriers to entry for new accrediting agency, and make it difficult for
institutions to effect the radical changes necessary to reduce cost and
improve outcomes through educational innovations. The current
regulations similarly do not differentiate between high-risk activities
that demand greater attention, and low-risk activities that do not
justify distracting agency decision-making bodies from more critical
concerns related to ensuring educational quality. In addition, these
regulations seek to reduce unnecessary delays in developing and
implementing curricular and other changes in order to meet employer
needs. These regulations also encourage institutions to participate in
orderly teach-outs, thus providing more students with the opportunity
to complete their program or transition to a new institution should
their current institution close. Finally, these regulations eliminate
the distinction between students enrolled in distance learning programs
that lead to licensure and ground-based programs focused on the same by
ensuring that all students--regardless of instructional modality--
understand whether the institution's programs will meet educational
requirements for a graduate to become licensed and work in their field
in a given State.
Changes: None.
Comments: One commenter stated that the Department failed to
provide any legal, policy, factual, or cost-benefit analysis for the
new definition of ``religious mission'' or the exemptions to
accrediting agency standards. They point out that the definition is not
mentioned in the RIA and no potential costs are cited if an institution
claims exemption from any of a wide range of accreditation standards.
Furthermore, there is no estimate of how many institutions may assert
exemptions from accrediting standards based on the definition or from
what types of standards they may assert exemptions.
Discussion: The Department appreciates the commenter pointing out
the need for discussion of the definition of religious mission and the
associated impacts.
Changes: We have added discussion of the definition of ``religious
mission'' in the Costs, Benefits, and Transfers section.
Comments: One commenter contended that the Department did not
present any evidence that the current regulations have created any
substantive barriers to innovation and noted that, in fact, as an
example, distance education enrollment has grown significantly over the
past two decades under the oversight of accrediting agencies. The
commenter also contended that it may be desirable to have certain
barriers in place to promote quality and protect students.
The same commenter stated that the Department is greatly
underestimating the cost of these final regulations, citing the $3.8
billion estimate, with the reported range of estimated Pell Grant
increases from $3.1 billion to $4.5 billion as too low and the increase
in loan volume and Pell Grant recipients of at most two percent by 2029
as also too low. The commenter alluded to historical evidence regarding
the cost of innovation, citing the change from 1997 to 1998--prior to
passage of a demonstration project that allowed institutions to move
entirely online--to Fall 2017, after the law changed to permit online-
only institutions. The commenter stated that according to NCES data,
enrollment in distance education programs during this period increased
tremendously, from 1.3 million to over 6.5 million students.
The commenter claimed that the estimated two percent increase
reflected in the NPRM is likely a ``significant underestimate'' given
the potential for new accrediting agencies, new providers, and new
programs eligible for Federal funding. Also, according to the
commenter, the Department failed to adequately consider costs
associated with reduced oversight. The commenter stated that these
final regulations are likely to greatly increase borrower defense
claims that would arise from institutions operating without strong
oversight from accrediting agencies and continuing to operate under new
ownership after closure, and that, because the Department has not yet
issued new final borrower defense regulations, it must estimate these
costs based on the 2016 borrower defense regulations currently in
effect. The commenter further noted that the added costs from borrower
defense claims would be partially offset by fewer closed school
discharges resulting from fewer institutions closing.
The commenter stated that under these final regulations the bar
would be lower for entry to new accrediting bodies and therefore the
Department should assume an increase in new accrediting agencies.
The commenter provided Department of Labor (DOL) data showing that
DOL proposed to create ``standards recognition entities'' (SREs) that
would act like accrediting agencies to approve apprenticeship programs.
DOL estimates that it would receive 300 applications of which 100 would
be totally new
[[Page 58892]]
applicants without any experience in the area. The commenter believed
the Department should assume a more significant increase in applicants
for Department recognition than it does as well as institutions that
would be seeking sources of funding such as Title IV.
The commenter stated that the Department's estimate of $3.8 billion
for regulatory changes that affect the entire higher education
landscape is less than the $6.2 billion it projects from rescinding
gainful employment regulations that affect proprietary school programs
and non-degree programs at public and nonprofit institutions that
represent only a portion of the higher education landscape.
The commenter asserted that the Department should revise its
estimates substantially upwards.
Discussion: The Department believes that the final regulations
strike the right balance between the goals of encouraging innovation
and ensuring accountability while providing sufficient oversight of
accrediting agencies and institutions and protecting students,
taxpayers, and the Federal government.
With respect to the increase in distance education dating back to
1997, the Department acknowledges that the impact of the expansion of
distance education on total number of enrollments was significant as
technological advances reduced barriers to entry for students who could
not otherwise participate in opportunities offered by traditional
ground campuses. The Great Recession further contributed to enrollment
growth as high unemployment drove more individuals to participate in
postsecondary education. In addition, regulatory changes that
eliminated policies that once limited growth on line by the growth of
programs on the ground also contributed to significant growth of
enrollments in online education. While the proportion of enrolled
students who take some or all classes online is increasing, the total
number of students enrolled is shrinking. This suggests that how
students receive education may continue to change, and this regulation
could encourage even greater shifting of students to online modalities.
Enrollments are shrinking at many institutions, including most online
institutions.28 29 The Department also notes that the
internet itself and the world wide web were only becoming popular in
the mid-1990s and, according to many sources, including the National
Science Foundation,\30\ by 1995, the internet was fully commercialized
in the United States when the National Science Foundation Network was
decommissioned, removing the last restrictions on use of the internet
to carry commercial traffic.
---------------------------------------------------------------------------
\30\ www.nsf.gov/news/special_reports/cyber/internet.jsp.
---------------------------------------------------------------------------
In fact, according to a research article published in the journal
Science, ``The internet's takeover of the global communication
landscape was almost instant in historical terms: It only communicated
1% of the information flowing through two-way telecommunications
networks in the year 1993, already 51% by 2000, and more than 97% of
the telecommunicated information by 2007.'' \31\ So, a substantial
amount of growth in all online activity in the 1990s is attributable to
the new internet and world wide web activity taking place in the mid-
1990s. Therefore, a comparison between the vast innovation taking place
in the online technology arena over a 20-year period with any
innovation evolving as a result of these regulations is not an
``apples-to-apples'' comparison.
---------------------------------------------------------------------------
\31\ ``The World's Technological Capacity to Store, Communicate,
and Compute Information,'' Martin Hilbert and Priscila L[oacute]pez
(2011), Science, 332(6025), pp. 60-65, available at:
martinhilbert.net/WorldInfoCapacity.html.
---------------------------------------------------------------------------
The Department believes that its financial aid estimates related to
these regulations are not ``greatly underestimated'' as the commenter
asserts. In fact, the Department realizes that any cost estimates
relating to regulations of this type carry a strong element of
speculation since many other variables are at play over the budget
window from 2020 to 2029. And the Department also was cognizant of the
lower estimate made concerning the lifting of the 50 percent rule
related to institutional online courses, which, among other issues,
underestimated the number of adult learners who wanted to enroll in
postsecondary education if they could do so without quitting their jobs
or enrolling in campus-based programs.
Therefore, the Department provided three scenarios incorporating
low, medium, and high assumptions consistent with regulatory
guidelines. And, the Department does estimate that under the high
scenario, additional higher educational costs of $4.5 billion are
possible. While there is no definitive way to test these assumptions in
the future, the Department does not accept the commenter's assertion
that the Department is reducing accrediting agency oversight and
weakening agency oversight of institutions which will result in
significantly higher costs. The Department does not accept the premise
that it is lowering the bar to accrediting oversight and reducing
Federal responsibility. Given this different prediction about the
outcome of these final regulations compared to the commenter, we do not
anticipate a significant increase in borrower defense claims from these
final regulations. The subsidy cost associated with the estimated
increase in volume for these final regulations was based on the
President's Budget FY 2020 baseline which included the implementation
of the 2016 Borrower Defense rule and we do not believe these final
regulations will necessarily lead to an increase in bad actors or
conduct that would give rise to borrower defense claims under any
version of that regulation. We also do not expect a substantial
difference in the number of closed schools from these final
regulations, so we do not estimate any savings from reduced closures
tied to fewer accrediting agency actions at this time.
Rather, as discussed earlier in the preamble, the Department views
these regulations as enabling accrediting agencies and institutions to
be nimbler and more responsive to changing economic conditions and
workforce demands. The Department believes that the regulations are in
the best interests of both students and taxpayers and will enable
institutions to improve the quality of education.
The Department appreciates the comments regarding DOL's recent NPRM
to establish new Standards Recognition Agencies (SRAs). While there are
similarities between SRAs and accrediting agencies, those similarities
are limited to the need to evaluate quality based on a set of published
standards or metrics. It is also important to note that SRAs are likely
to include industry trade associations and other private-sector
entities that may pay higher salaries or have higher costs of operating
and decision-making based on the structure of these entities and salary
trends in certain industries. DOL's cost estimates for establishing
SRAs have no bearing on the Department's cost estimates related to
reducing unnecessary regulatory burden, encouraging institutions to
close in orderly fashions rather than precipitously, or allowing new
agencies to enter a field that has a well-established history and a
large number of existing participants. The Department believes it would
be inappropriate to apply DOL's assumptions for the cost of creating a
new quality assurance system to our regulations, which are designed
[[Page 58893]]
to increase competition and refocus accrediting agency activities on
educational quality and the student experience.
The estimates for these regulations do not assume loan performance
will decline due to the rescission of the gainful employment rule.
Although the gainful employment regulations primarily affect a limited
number of institutions, their impact could have been significant, as
they tied ineligibility to the debt-to-earnings metric. However, with
only one year of GE data available, it is hard to speculate on the
long-term impact of the GE regulations and whether program closures
would have reduced the total number of students enrolled, or simply
shifted where these students enrolled or which programs they pursued.
On the other hand, although these regulations will affect all sectors,
we believe their impact will be more limited.
Changes: None.
Costs, Benefits, and Transfers
As discussed in the NPRM, the Department is amending the
regulations governing the recognition of accrediting agencies and
institutional eligibility and certain student assistance general
provisions, as well as making various technical corrections. A number
of clarifying changes were made in these final regulations, including
updates to the definitions of terms including State authorization
reciprocity agreements, teach-out, and compliance report; noting that
prior approval is required for an aggregate change of 25 percent or
more of the clock hours, credit hours, or content of a program since
the agency's most recent accreditation review; and requiring disclosure
of negative actions taken by an accrediting agency, provided that an
institution need not disclose allegations, lawsuits, or legal actions
taken against it unless the institution has admitted guilt or there has
been a final judgment on the merits. Additionally, we have made it
clear that title IV participation may be extended for 120 days only
after a decision to end participation has been made, but prior to the
termination of accreditation, State authorization, or the program
participation agreement. All of these changes are detailed in the
Analysis of Comments and Changes section of this preamble and none are
expected to significantly change the net budget impact or cost and
benefits of the final regulations to students, institutions, or
accrediting agencies.
These final regulations will affect students, institutions of
higher education, accrediting agencies, and the Federal government. The
Department expects students, institutions, accrediting agencies, and
the Federal government will benefit as these final regulations will
provide transparency and increased autonomy and independence of
agencies and institutions. We also intend for these final regulations
to increase student access to postsecondary education, improve teach-
outs for students at closed or closing institutions, restore focus and
clarity to the Department's agency recognition process, and integrate
risk-based review into the accreditation recognition process.
The Department of Education Organization Act of 1979 (Pub. L. 96-
88) prohibits the Department from intervening in institutional
decisions regarding curriculum, faculty, administration, or academic
programs of an institution of higher education. Instead, Congress
assigned accrediting agencies the role of overseeing the quality of
institutions and academic sufficiency of instructional programs. The
Secretary recognized 53 accrediting agencies as of April 2019 as shown
on the Department's financial aid accreditation websites.\32\ In
addition, there were four State approval agencies that are also
identified as title IV gatekeepers for the approval of postsecondary
vocational education and five State approval agencies for the approval
of nurse education (for non-title IV, HEA purposes).
---------------------------------------------------------------------------
\32\ https://ope.ed.gov/dapip/#/home.
---------------------------------------------------------------------------
The 53 accrediting agencies are independent, membership-based
organizations that oversee students' access to qualified faculty,
appropriate curriculum, and other support services. Of the 53
accrediting agencies recognized by the Secretary, 36 accredit
institutions for title IV, HEA purposes and 17 solely accredit
programs. While postsecondary accreditation is voluntary, accreditation
from either a nationally recognized accrediting agency or State
approval agency is required for an institution to participate in the
title IV, HEA programs. One goal of our negotiated rulemaking was to
examine the Department's accreditation regulations and processes to
determine which are critical to assessing the quality of an institution
and its programs and to protecting student and taxpayer investments. In
negotiating these regulations, negotiators reached consensus on the
processes that accrediting agencies should follow and understood that
certain tradeoffs would be inevitable. Providing greater flexibility in
how agencies approach the accrediting process and promoting innovative
practices while reducing administrative burden and streamlining
operations are key objectives of these final regulations.
The regulatory impact on the economy of these final regulations
centers on the benefits of, and the tradeoffs associated with, (1)
streamlining and improving the Department's process for recognition and
review of accrediting agencies and (2) enabling accrediting agencies to
exercise greater autonomy and flexibility in their oversight of member
institutions and programs in order to facilitate agility and
responsiveness and promote innovation. Although we estimate here the
marketplace reaction by accrediting agencies, students, institutions,
and governmental entities to such regulatory changes, generally, there
is little critical data published on which to base estimates of how
these final regulations, which primarily promote flexibility in
accrediting processes, will impact various market segments.
Accrediting Agencies
These final regulations will allow accrediting agencies the
opportunity to exercise a greater degree of choice in how they operate.
One key change in these final regulations pertains to the concept of
not limiting an agency's accrediting activities to a particular
geographic region. These final regulations remove the ``geographic area
of accrediting activities'' from the definition of ``scope of
recognition or scope.'' The current practice of recognizing geographic
scope of an accrediting agency may discourage multiple agencies from
also including the same State in their geographic scope. By removing
this potential obstacle and acknowledging that many agencies already
operate outside their recognized geographic scope, the Department seeks
to provide increased transparency and introduce greater competition and
innovation that could allow an institution or program to select an
accrediting agency that best aligns with the institution's mission,
program offerings, and student population.
Under these final regulations, we will no longer require
accrediting agencies to apply to the Department to change the
geographic region in which the agencies accredit institutions, which
occurs about once a year. However, we will require accrediting agencies
to include in public disclosures the States (``geographic area'') in
which they conduct their accrediting activities. This includes not only
those States in which they accredit main campuses, but also the States
in which the agencies accredit branch campuses or additional
[[Page 58894]]
locations. This will promote greater transparency and clarity for
students while eliminating burden on agencies and the Department of
recognition proceedings focusing on geographic scope as well as the
anticompetitive impact of the Department appearing to endorse
allocation among individual agencies of discrete geographic regions.
In general, these final regulations will simplify the labeling of
accrediting agencies to better reflect their focus. Therefore, the
Department will no longer categorize agencies as regional or national;
we will instead include them under a combined umbrella identified as
``institutional'' or ``nationally recognized.'' The terms ``regionally
accredited'' and ``nationally accredited'' related to institutional
accreditation will no longer be used or recognized the Department. We
will, however, allow agencies to market themselves as they deem
appropriate. Programmatic agencies that currently accredit particular
programs will retain that distinction under these final regulations.
As a result of these changes, the Department expects that the
landscape of institutional accrediting agencies may change over time
from one where some agencies only accredit institutions headquartered
in particular regions (as shown on the map in Chart 1) to one where
institutional accrediting agencies accredit institutions throughout
many areas of the United States based on factors such as institutional
mission rather than geography. As indicated in Chart 2, provided by the
Higher Learning Commission during the negotiated rulemaking sessions
for this regulation, many of the institutions accredited by regional
accrediting agencies engage in activities outside of their region so
geographic distinctions in accreditation are less meaningful than they
once might have been. As a result of these regulations, some
accrediting agencies may capture a larger share of the market while
agencies that specialize in niche areas may enjoy strong demand.
However, we will not require any institution or program to change to a
different accrediting agency as a result of these regulatory changes,
nor will we require an agency to accept a new institution or program
for which it did not have capacity or interest to accredit.
BILLING CODE 4000-01-P
[GRAPHIC] [TIFF OMITTED] TR01NO19.000
[[Page 58895]]
[GRAPHIC] [TIFF OMITTED] TR01NO19.001
BILLING CODE 4000-01-C
Under these final regulations, accrediting agencies may realize
burden reduction, streamlined operations, and an increase in autonomous
control. For example, under the current regulations, an agency found to
have a minor deficiency (such as a missing document) would be required
to submit a compliance report, of which there were 17 submitted between
2014 and 2018. Agencies required to prepare compliance reports need to
invest a significant amount of time and resources. Additionally,
compliance reports require extensive review by Department staff,
NACIQI, and the senior Department official (SDO), at a minimum. Under
these final regulations, the Department may find an agency to be
substantially compliant and require it to submit a less burdensome
monitoring report to address the concern without requiring NACIQI or
SDO review, saving the agency and the Department time and money while
maintaining ample oversight and preserving the same
[[Page 58896]]
opportunity to require the more extensive review if the agency's
shortcomings prove to be not as readily remediated as anticipated. The
final regulations will also reduce burden by allowing accrediting
agencies to use senior staff instead of the agency's accrediting
commission to approve substantive changes proposed by accredited
institutions or programs. This allows accrediting agencies to structure
their work more efficiently and permit the accredited entities to
obtain agency approval more expeditiously where appropriate.
---------------------------------------------------------------------------
\33\ Council for Higher Education Accreditation, Regional
Accrediting Organizations web page. Available at https://www.chea.org/regional-accrediting-organizations-accreditor-type.
\34\ Higher Learning Commission, Accreditation and
Innovation.pdf Available at https://www2.ed.gov/policy/highered/reg/hearulemaking/2018/index.html.
---------------------------------------------------------------------------
Under these final regulations, for institutions to receive
recognition of preaccreditation or accreditation by the Secretary, they
must agree to submit any dispute with the accrediting agency to
arbitration before bringing any other legal action. This requirement
highlights the existing statutory requirement, enables agencies to
pursue adverse actions without an immediate threat of a lawsuit, and
potentially minimizes litigation costs for accrediting agencies and
institutions. The relative costs of litigation and arbitration can vary
depending upon the nature of the dispute, the parties involved, varied
costs in different States, and several other factors. According to the
Forum, previously known as the National Arbitration Forum, total
arbitration costs can amount to only 25 percent of the cost to bring
the same action to court.\35\ Another article entitled ``The Iceberg:
The True Cost of Litigation Versus Arbitration'' cites the average cost
of arbitration for a business as approximately $70,000 while the
average litigation costs for a given business total over $120,000.\36\
---------------------------------------------------------------------------
\35\ www.ffiec.gov/press/comments/nationalarbforum.pdf.
\36\ https://landwehrlawmn.com/cost-litigation-arbitration/.
---------------------------------------------------------------------------
The Department does not receive information about the number of
disputes between accrediting agencies and institutions that go to
litigation or arbitration or data about the costs associated with both
those actions. An initial review of legal news sources indicates a
range of lawsuits and outcomes involving accrediting agencies and
institutions.37(14)
---------------------------------------------------------------------------
\37\ See, e.g. Wards Corner Beauty Academy v. National Accred.
Comm'n of Arts & Sciences, 922 F.3d 568 (4th Cir. 2019) (affirming
denial of relief to institution challenging withdrawal of
accreditation); Professional Massage Training Center, Inc. v.
Accreditation Alliance of Career Schools and Colleges, 781 F.3d 161
(4th Cir. 2015) (reversing district court's decision to order
reinstatement of accreditation and to award damages); Escuela de
Medicina San Juan Bautista, Inc. v. Liaison Committee on Medical
Education, 820 F. Supp. 2d 317 (D.P.R. 2011) (granting preliminary
injunction vacating accrediting agency's appeal decision and
requiring agency to conduct a new appeal); St. Andrews Presbyterian
College v. Southern Ass'n of Colleges and Schools, Inc., 679 F.
Supp. 2d 1320 (N.D. Ga. 2009) (upholding withdrawal of accreditation
after 2 years of litigation); Western State University of Southern
California v. American Bar Ass'n, 301 F. Supp. 2d 1129 (C.D. Calif.
2004) (granting preliminary injunction against withdrawal of
provisional accreditation).
---------------------------------------------------------------------------
The likelihood is that, from a cost perspective, arbitration will
be considerably less expensive for the accrediting agencies and
institutions than litigation in the first instance and the assumption
is outcomes will not vary greatly according to the process pursued. We
note, however, that the final regulations do not preclude an
institution from pursuing a legal remedy--as provided for in statute--
after going to arbitration. Therefore, the arbitration requirement may
not ultimately change institutional behavior.
Under these final regulations, accrediting agencies are required to
report a number of items to the Department, institutions, or the
public, as shown in the Paperwork Reduction Act section of this
preamble. Accrediting agencies must, among other things: (1) Notify the
Department of, and publish on their websites, any changes to the
geographic scope of recognition; (2) publish policies for any
retroactive application of an accreditation decision; (3) provide
institutions with written timelines for compliance and a policy for
immediate adverse action when warranted; (4) provide notice to the
Department and students of the initiation of an adverse action; (5)
update and publish requirements related to teach-out plans and teach-
out agreements; and (6) redact personally identifiable and other
sensitive information prior to sending documents to the Department.
We estimate the burden for all accrediting agencies will be 6,562
hours and $297,652 annually at a $45.36 wage rate. There are also some
provisions expected to reduce burden on accrediting agencies,
including: (1) Allowing decisions to be made by a senior staff member;
(2) using SDO determination and monitoring reports and reducing
preparation and attendance at NACIQI meetings; and (3) removing
existing requirements related to evaluating credit hours. We estimate
that these changes will reduce burden for all accrediting agencies by
2,655 hours and $120,431 at a $45.36 wage rate. We estimate the net
annual burden for all accrediting agencies to be 3,907 hours and
$177,222. We based these estimates on the 2018 median hourly wage for
postsecondary education administrators in the Bureau of Labor
Statistics Occupational Outlook handbook.\38\
---------------------------------------------------------------------------
\38\ Bureau of Labor Statistics, U.S. Department of Labor,
Occupational Outlook Handbook, Postsecondary Education
Administrators, on the internet at https://www.bls.gov/ooh/management/postsecondary-education-administrators.htm (visited May
21, 2019).
---------------------------------------------------------------------------
Institutions
These final regulations will also affect institutions. Institutions
may benefit from a more efficient process to establish new programs and
the opportunity to seek out alternate accrediting agencies that
specialize in evaluating their type of institution. Institutions may
also benefit from having the option to use alternative standards for
accreditation under Sec. 602.18, provided that the institution
demonstrates the need for such an alternative and that it will not harm
students. Institutions will also benefit from accrediting agencies
having the authority to permit the institution to be out of compliance
with policies, standards, and procedures otherwise required by the
regulations, for a period of up to three years, and longer for good
cause shown, where there are circumstances beyond the institution's or
program's control requiring this exception. This gives institutions
flexibility in the event of a natural disaster, a teach-out of another
institution's students, significant documented local or national
economic changes, changes in licensure requirements, undue hardship on
students, and the availability of instructors who do not meet the
agency's faculty standards but are qualified by education or work
experience to teach courses within a dual or concurrent enrollment
program.
In making decisions about changing accrediting agencies,
institutions will have to balance the expense of maintaining existing
accreditation while working with new agencies and the possible
reputational effects of appearing to shop for accreditation. On the
other hand, if accrediting agencies do realign over time, some
institutions may need to seek out alternate accreditation as their
current agency may elect to specialize in a different market segment.
The following table, based on Federal Student Aid (FSA) information
as of April 2019, summarizes data related to title IV eligible
institutions and their distribution according to type of primary
accrediting agency, also known as the title IV gatekeeper accrediting
agency.
[[Page 58897]]
As currently configured, both public and private non-profit
institutions overwhelmingly use regional accrediting agencies as their
primary agency for title IV participation, whereas proprietary
institutions almost exclusively use national agencies. We do not
require foreign schools to report accreditation information, although
they may do so. We show foreign schools simply to provide context for
how many are participating.
[GRAPHIC] [TIFF OMITTED] TR01NO19.002
As stated earlier, under these final regulations, the Department
considers regional and national accrediting agencies under one overall
``institutional'' umbrella. One objective of this policy is to increase
students' academic and career mobility, by making it easier for
students to transfer credits to continue or attain an additional degree
at a new institution, by eliminating artificial boundaries between
institutions due in part to reliance on a reputation associated with
certain types of accrediting agencies. While this change would
primarily result in some realignment of accrediting agencies and
institutions, there is potential that certain postsecondary students
could benefit and be enabled to transfer and continue their education
at four-year institutions where previously they could not do so. This
may result in greater access and increased educational mobility for
students coming from proprietary institutions that use national
accrediting agencies. It also may result in the award of increased
financial aid, such as Federal Direct Student Loans and Pell Grants, on
behalf of students pursuing additional higher education.
From an impact perspective, there may be several outcomes. The
likelihood in the near term is that the status quo--under which
institutions, especially four-year institutions, maintain their
distinction under institutional accreditation--prevails, and the impact
is essentially zero or neutral. The Department is prohibited from
dictating an institution's credit transfer or acceptance policy, though
it strongly discourages anticompetitive practices or those that deny
students the ability to continue their education without an evaluation
of that student's academic ability or prior achievement. The Department
is hopeful that changes in these regulations will make it easier for
institutions to voluntarily set policies that promote competition,
support strong academic rigor, and allow qualified credits to transfer.
Nevertheless, we do not prohibit other practices in these final
regulations, and certain institutions may initially resist the changes
intended by these final regulations.
A shift from strictly geographic orientation may occur over time,
probably measured in years, as the characterization of
``institutional'' in terms of accreditation becomes more prevalent and
greater competition occurs, spurring an evolving dynamic marketplace.
Accrediting agencies may align in different combinations that coalesce
around specific institutional dimensions or specialties, such as
institution size, specialized degrees, or employment opportunities. If
access to higher-level educational programs by students improves, the
Department anticipates some modest increase in financial aid, through
Federal sources such as Direct Loans and Pell Grants.
The Department approaches estimates for increased financial aid in
terms of a range of low, medium, and high impacts based on student risk
groups and institution sectors. This analysis appears in the section on
Net Budget Impacts. A factor that could increase the Federal aid
received by institutions is the proposed extension of time for
achieving compliance in Sec. 602.20, which may reduce the likelihood
an accrediting agency will drop an institution.
Institutions with a religious mission would benefit from the
requirement that accrediting agencies do not hold positions and
policies resulting from that religious mission that do not interfere
with the institution's or program's curricula including all core
components required by the agency against the institution in its
review. As of June 14, 2018, 277 institutions participating in title IV
programs hold a religious exemption from some part of the regulations
applicable to postsecondary institutions. These institutions, and
others that may have similar religious missions, will be able to pursue
such exemptions without concern that it will harm their accreditation
status.
Additionally, some institutions would benefit from the changes
related to State authorization in Sec. 600.9 that generally maintain
State reciprocity agreements for distance education and correspondence
programs as an important method by which institutions may comply with
State requirements and reduce the burden on institutions
[[Page 58898]]
that would otherwise be subject to numerous sets of varying
requirements established by individual States. These final regulations
allow religious institutions exempt from State authorization under
Sec. 600.9(b) to comply with requirements for distance education or
correspondence courses by States in which the institution is not
physically located through State authorization reciprocity agreements.
The final regulations also make the administration of distance
education programs more efficient by replacing the concept of a
student's residence with that of the student's location. As noted in
the State Authorization section of this preamble, residency
requirements may differ within States for purposes of voting, paying
in-State tuition, and other rights and responsibilities. By using a
student's location instead of residence, the Department intends to make
its regulations more consistent with existing State requirements, make
it easier for institutions to administer, and ensure that students who
have not established legal or permanent residence in a State benefit
from State requirements for an institution to offer distance education
and correspondence courses in that State. Finally, these final
regulations remove the duplicative student complaint process
requirements under current Sec. 600.9(c)(2) as the regulations under
Sec. 668.43(b) already require institutions to disclose the complaint
process in each of the States where its enrolled students are located.
Under the final regulations, institutions must make some new or
revised disclosures to students and the Department, as shown in the
Paperwork Reduction Act section of this preamble. Institutions will be
required to (1) update their policies and procedures to ensure
consistent determination of a student's location for distance education
and correspondence course students, and, upon request, to provide
written documentation from the policies and procedure manual of its
method and basis for such determinations to the Secretary; (2) inform
the Secretary of the establishment of direct assessment programs after
the first; (3) inform the Secretary of written arrangements for an
ineligible program to provide more than 25 percent of a program; and
(4) provide disclosures to students about whether programs meet
licensure requirements, acceptance of transfer credits, policies on
prior learning assessment, and written arrangements for another entity
to provide all or part of a program. We estimate the cost of these
disclosures to institutions will be a burden increase of 581,980 hours
annually, totaling $26,398,613 (581,980 * $45.36). This wage is based
on the 2018 median hourly wage for postsecondary education
administrators in the Bureau of Labor Statistics Occupational Outlook
handbook.\39\
---------------------------------------------------------------------------
\39\ Bureau of Labor Statistics, U.S. Department of Labor,
Occupational Outlook Handbook, Postsecondary Education
Administrators, available at www.bls.gov/ooh/management/postsecondary-education-administrators.htm (visited May 21, 2019).
---------------------------------------------------------------------------
While institutions will incur some increased costs for these
disclosures and notifications, we do think there will be time and cost
savings from the consolidation of reporting requirements and several
provisions in these final regulations. The final regulatory package
will remove the current regulatory requirements in Sec. 668.50. This
removes seven public disclosures that institutions offering distance
education or correspondence courses were required to provide to
students enrolled or seeking enrollment in such programs. Several of
these disclosures will be required under Sec. 668.43 and are included
in the $26 million in burden described previously.
As detailed in the Paperwork Reduction Act section of this
preamble, we expect these consolidations to save 152,405 hours for a
total estimated reduction in burden of $6,913,091 at the hourly wage of
$45.36 described above. Together, we estimate the expected net impact
of the changes to disclosures to be an increase of 429,575 hours
totaling $19,485,522 at the hourly wage of $45.36. The changes to the
substantive change requirements may reduce the time and expense to
institutions by streamlining approval of institutional or programmatic
changes by dividing them into those that the agency must approve and
those the institution must simply report to the agency, and also by
permitting some changes to be approved by accrediting agency senior
staff rather than by the entire accrediting commission, as well as by
setting deadlines for agency approvals of written arrangements.
Students
As discussed earlier, these final regulations will provide various
benefits to students by improving access to higher education and
mobility and promoting innovative ways for employers to partner with
accrediting agencies in establishing appropriate quality standards that
focus on clear expectations for success. The final regulations may make
it easier for students to transfer credits to continue, or attain an
additional degree, at a new institution, including students from
proprietary institutions seeking additional education at four-year
public or private nonprofit institutions. If institutions are better
able to work with employers or communities to set up programs that
efficiently respond to local needs, students could benefit from
programs designed for specific in-demand skills. Students would have to
consider if choosing a program in a preaccreditation status or one that
takes an innovative approach provides a high-quality opportunity. The
Department believes programs added in response to these final
regulations will maintain the quality of current offerings because
institutions are still required to obtain accrediting agency approval
when they want to add programs that represent a significant departure
from the existing offerings or educational programs, or method of
delivery, from those that were offered when the agency last evaluated
the institution and when they want to add graduate programs. Lower-
level programs that are related to what they are already offering are
expected to leverage the strengths of the existing programs.
The Department does not believe many students rely on the
distinction between regional and national accrediting agencies when
deciding between programs or institutions but instead base their choice
on other factors such as location, cost, programs offerings, campus,
and career opportunities. Therefore, we do not think there are costs to
students from the change to institutional versus regional
accreditation, especially since institutions will be allowed to use
whatever terms accurately reflect their accreditation to the extent it
is useful for informing the audience of particular communications.
Additionally, if the accreditation market transforms over time and
certain agencies develop strong reputations in specialized areas over
time, that may be more informative for students interested in those
outcomes.
Students may also be affected by the provisions related to the
definition of a religious mission and the ability of institutions to
have policies that support their religious mission without it being a
negative factor in the institution's accreditation review. Institutions
should be clear in their religious mission statements and students
should evaluate if that mission is consistent with their beliefs or if
they are willing to attend an institution with those policies and
perspectives. For some students, this may limit the options in a given
commuting range or lead them to attend an institution whose religious
mission they do not share.
[[Page 58899]]
The changes to the institutional disclosures in these final
regulations are also aimed at simplifying the disclosures and providing
students more useful information. As detailed in the Disclosures
section of the NPRM, these final regulations require disclosures to
ensure that an institution provides adequate information for students
to understand its transfer-of-credit policy, especially when that
policy excludes credits from certain types of institutions. The
Department also believes that disclosures relating to an institution's
prior learning assessment policies are important to students,
especially those who have not attended college before or who are
returning to college after many years of experience or training in
other fields. Students will also receive information about any written
arrangements under which an entity other than the institution itself
provides all or part of a program. Another key disclosure is whether
the program meets educational requirements for licensure in the State
in which the student is located. These final regulations about teach-
out plans required by accrediting agencies and State actions are
intended to ensure that students have clear information about serious
problems at their institutions, and this is most likely to occur when
those institutions are required to have a teach-out plan in place or
are under investigation by a State or other agency.
Under these final regulations, in certain circumstances, such as
when an accrediting agency places an institution on probation, the
Department changes the institution to reimbursement payment method, or
the institution receives an auditor's adverse opinion, an accrediting
agency must require a teach-out plan to facilitate the opportunity for
students to complete their academic program. A closing institution will
also trigger a required teach-out opportunity. For students, this could
enable them to complete a credential with less burden associated with
transferring credits and finding a new program. Alternatively, they
will have the option to choose a closed school discharge if it makes
sense for their situation. The additional flexibility under these final
regulations for accrediting agencies to sanction programs instead of
entire institutions potentially creates a trade-off as the students in
programs that close are not eligible for closed school discharges.
However, by focusing on problematic programs, fewer institutions may
close precipitously, and fewer students would have their programs
disrupted.
Federal Government
Under these final regulations, the Federal government would incur
some additional administrative costs.
We do not expect the costs associated with processing post-
participation disbursements to be significant, as the disbursement
system is well-established and designed to accommodate fluctuations in
disbursements. A file review at the agency would be incorporated into
the review of agency applications. Currently, the Department reviews
approximately 10 accrediting agencies for initial or renewal
applications annually and we expect a file review will take Department
staff 6 hours at a GS-14 Step 1 hourly wage rate of $43.42. The
potential increase in the number of reviews due to these final
regulations is uncertain, but we estimate a cost of $261 per review (6
hours * $43.42). Additional costs may also arise from increased senior
Department official reviews under proposed Sec. 602.36(g), which
provides an agency subject to a determination that a decision to deny,
limit, or suspend recognition may be warranted with an opportunity to
submit a written response and documentation addressing the finding, and
the staff with an opportunity to present its analysis in writing. The
Department has reviewed 17 compliance reports between 2014 and 2018; we
do not expect the administrative burden on the Department from this
provision to be significant.
The Federal government will benefit from savings due to a reduced
number of closed school loan discharges as a result of an expected
increase in students completing teach-outs, but it may also incur
annual costs to fund more Pell Grants and some title IV loans for
students participating in teach-outs and increased volume from new
programs or extension of existing programs, as discussed in the Net
Budget Impacts section.
Net Budget Impacts
We estimate that these final regulations will have a net Federal
budget impact over the 2020-2029 loan cohorts of $35 million in outlays
in the primary estimate scenario and an increase in Pell Grant outlays
of $3,744 million over 10 years, for a total net impact of $3,779
million. A cohort reflects all loans originated in a given fiscal year.
Consistent with the requirements of the Credit Reform Act of 1990,
budget cost estimates for the student loan programs reflect the
estimated net present value of all future non-administrative Federal
costs associated with a cohort of loans. The Net Budget Impact is
compared to a modified version of the 2020 President's Budget baseline
(PB2020) that adjusts for the recent publication of the final Borrower
Defense rule.
As the Department recognizes that the market transformations that
could occur in connection with these final regulations are uncertain
and we have limited data on which to base estimates of accrediting
agency, institutional, and student responses to the regulatory changes,
we present alternative scenarios to capture the potential range of
impacts on Federal student aid transfers. An additional complicating
factor in developing these estimates are the related regulatory changes
on which the committee reached consensus in this negotiated rulemaking
that we will propose in separate notices of proposed rulemaking. For
example, we will address the potential expansion of distance education
or direct assessment programs because of significant proposed changes
in the regulations governing such programs in a separate notice of
proposed rulemaking. In this analysis, we address the impact of the
accreditation changes and other changes in these final regulations but
recognize that attributing future changes in the Federal student aid
disbursements to provisions that have overlapping effects is an inexact
process. Therefore, in future proposed regulations, as appropriate, we
will consider interactive effects related to the changes in these
regulations.
The main budget impacts estimated from these final regulations come
from changes in loan volumes and Pell Grants disbursed to students as
establishing a program becomes less burdensome and additional students
receive title IV, HEA funds for teach-outs. Changes that could allow
volume increases include making it easier for the Department to
recognize new accrediting agencies and reducing the experience
requirement for expanding an agency's scope to new degree levels.
Agencies will also be able to establish alternative standards that
require the institution or program to demonstrate a need for the
alternative approach, as long as the alternative will not harm students
and that they will receive equivalent benefit. The alternative standard
could allow for the faster introduction of innovative programs. The
possibility of additional accrediting agencies would increase the
chances for institutions to find an agency. Institutions' liability
associated with acquiring additional locations and expanded time to
come into compliance could also keep programs operating longer than
they otherwise might. The
[[Page 58900]]
tables below present the assumed grant and loan volume changes used in
estimating the net budget impact of these final regulations for the
primary scenario, with discussion about the assumptions following the
tables.
Table 2A--Assumptions About Change in Pell Grants by Award Year
[Additional Pell recipients]
--------------------------------------------------------------------------------------------------------------------------------------------------------
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
--------------------------------------------------------------------------------------------------------------------------------------------------------
4-year public............................. 0 8,845 15,075 30,789 39,292 48,153 57,375 66,980 68,903 70,333
2-year public............................. 0 6,790 11,624 17,891 24,469 31,395 38,633 46,219 47,710 48,933
4-year private............................ 0 3,252 5,514 11,215 14,272 17,456 20,806 24,230 24,869 25,369
2-year private............................ 0 163 281 433 597 772 956 1,155 1,193 1,235
Proprietary............................... 0 4,988 10,266 15,832 21,691 25,102 28,679 32,454 33,612 34,570
-------------------------------------------------------------------------------------------------------------
Total................................. ......... 24,038 42,760 76,161 100,321 122,879 146,450 171,037 176,288 180,441
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated program costs for Pell Grants range from $30.1 billion in
AY 2021-22 to $37.2 billion in AY 2029-30, with a 10-year total
estimate of $333.8 billion. On average, the FY 2020 President's Budget
projects a baseline increase in Pell Grant recipients from 2020 to 2029
of approximately 200,000 annually. The increase in Pell Grant
recipients estimated due to these final regulations ranges from about
12 percent in 2021 to approximately 90 percent by 2029 of the projected
average annual increase that would otherwise occur. However, even the
additional 180,441 recipients estimated for 2029 would account for
approximately 2 percent of all estimated Pell recipients in 2029 and
results in an increase in program costs of approximately $4,427
million, a 1.3 percent increase in estimated 10-year Pell Grant program
costs of $333.8 billion.
Table 2B--Assumptions About Change in Loan Volume From Final Regulations by Cohort and Risk-Group
--------------------------------------------------------------------------------------------------------------------------------------------------------
PB2020 vol est Percent change in loan volume by risk group and cohort--subsidized and unsubsidized loans
(subsidized and ---------------------------------------------------------------------------------------------------
unsubsidized)
------------------- 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
FY2020 ($mns)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proprietary...................... 2,774 0 0.5 1 1.5 2 3 4 5 5 5
2-Year Non-Profit................ 4,981 0 0.3 0.5 0.75 1 1.25 1.5 2 2.25 2.5
4-Year Fr/So..................... 17,118 0 0.3 0.5 1 1 1.5 2 2.75 3.5 4
4-Year Jr/Sr..................... 20,063 0 0.3 0.5 1 1 1.5 2 2.75 3.5 4
Grads............................ 50,734 0 0 -0.2 -0.2 -0.2 -0.2 -0.3 -0.3 -0.3 -0.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
PB2020 vol est Percent change in loan volume by risk group and cohort--PLUS loans
(PLUS) ---------------------------------------------------------------------------------------------------
-------------------
FY2020 ($mns) 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proprietary...................... 356 0 0.25 0.5 0.75 1 1.5 2 2.5 2.5 2.5
2-Year Non-Profit................ 133 0 0.15 0.25 0.375 0.5 0.625 0.75 1 1.125 1.25
4-Year Fr/So..................... 8,003 0 0.15 0.25 0.5 0.5 0.75 1 1.375 1.75 2
4-Year Jr/Sr..................... 5,713 0 0.15 0.25 0.5 0.5 0.75 1 1.375 1.75 2
Grads............................ 11,888 0 0 -0.2 -0.2 -0.2 -0.2 -0.3 -0.3 -0.3 -0.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
As seen from the approximately $100 billion annual loan volume,
even small changes will result in a significant amount of additional
loan transfers. We update loan volume estimates regularly; for PB2020
the total non-consolidated loan volume estimates between FY2020 and
FY2029 range from $100.2 billion to $116.1 billion. The additional high
and low scenarios represent a 20 percent increase or decrease from the
assumptions presented in the table. The Department does not anticipate
that the changes in the final regulations will lead to widely different
scenarios for volume growth and therefore believes the 20 percent range
captures the likeliest outcomes. For the provisions aimed at reducing
closed school discharges by enhancing teach-outs, the main assumption
is that closed school discharges will decrease by 10 percent, with a 20
percent decrease in the high scenario and a 5 percent decrease in the
low scenario. With some exceptions, the Department has limited
information about teach-outs and what motivates students to pursue them
versus a closed school discharge, but we assume proximity to
completion, convenience, and perception of the quality of the teach-out
option have a substantial effect. Absent any evidence of the effect of
the proposed changes on student response to teach-out plans, the
Department has made a conservative assumption about the decrease in
closed school discharges and the potential savings from the proposed
changes may be higher.
However, since the publication of the NPRM describing the
accreditation changes, the final Borrower Defense rule was published on
September 23, 2019 \40\ and reduced expected discharges as the
elimination of automatic closed school discharges generated more
savings than the extension of the closed school window to 180 days
increased discharges. In order to avoid attributing savings in these
final regulations for reductions in closed school discharges that would
occur because of the borrower defense changes, the Department re-
estimated the savings from this provision against the PB2020 baseline
with the borrower defense closed school changes incorporated in it.
Evaluated against this reduced level of expected future closed school
discharges, the estimated savings from the closed school provision
decreased
[[Page 58901]]
from $120 million in the main 10 percent reduction scenario to $79
million.
---------------------------------------------------------------------------
\40\ 84 FR 49788 published September 23, 2019. Available at
https://www.govinfo.gov/content/pkg/FR-2019-09-23/pdf/2019-19309.pdf.
---------------------------------------------------------------------------
The assumed changes in loan volume would result in a small cost
that represents the net impact of offsetting subsidy changes by loan
type and risk group due to positive subsidy rates for Subsidized and
Unsubsidized Stafford loans and negative subsidy rates for Parent PLUS
Loans and the interaction of the potential reduction in closed school
discharges and increases in loan volume. The costs of the volume
increase do differ from the NPRM as a result of the modified baseline
that takes the final Borrower Defense rule into account as reduced
discharge rates reduce subsidy costs. We do not assume any changes in
subsidy rates from the potential creation of new programs or the other
changes reflected in these final regulations. Depending on how programs
are configured, the market demand for them, and their quality, key
subsidy components such as defaults, prepayments, and repayment plan
choice may vary and affect the costs estimates. For example, if
institutions with less favorable program outcomes find more lenient
accrediting agencies or if they take advantage of the substantive
change policy revisions to expand their program offerings, there could
be an increase in default rates or other repayment issues. On the other
hand, institutions with strong programs may take advantage of the
flexibility allowed by the substantive change policy revisions to
expand their program offerings, possibly by adding certificate
programs. We do not have information at this point to assume that new
programs established under these provisions would have a different
range of performance from current programs or to estimate how
performance could vary.
Table 3 summarizes the Pell and loan effects for the Low, Main, and
High impact scenarios over a 10-year period with years 2022 through
2029 showing amounts of over $100 million in outlays per year. Each
column reflects a low impact, medium impact, or high impact scenario
showing estimated changes to Pell Grants and Direct Loans under those
low, medium, and high conditions. Therefore, the overall amounts
reflect the sum of outlay changes occurring under each scenario for
Pell Grants and Direct Loans when combined. The loan amounts reflect
the combined change in the volumes and closed school discharges, which
do have interactive and offsetting effects. For example, the closed
school changes had estimated savings ranging from $41 million to $164
million when evaluated without the volume changes, and the volume
changes had costs of $81 million to $139 million when estimated without
the closed school changes.
Table 3--Estimated Net Impact of Pell Grant and Loan Changes--2020-2029 Outlays
[$mns]
----------------------------------------------------------------------------------------------------------------
Low Main High
----------------------------------------------------------------------------------------------------------------
Pell Grants..................................................... 2,981 3,744 4,463
Loans........................................................... 40 35 -25
-----------------------------------------------
Overall..................................................... 3,021 3,779 4,438
----------------------------------------------------------------------------------------------------------------
When considering the impact of these final regulations on Federal
student aid programs, a key question is the extent to which the changes
will expand the pool of students who will receive grants or borrow
loans compared to the potential shifting of students and associated aid
to different programs that may arise because of the changes in
accreditation. The Department believes many of the final regulatory
provisions that clarify definitions or reflect current practice will
not lead to significant expansion of program offerings that would not
otherwise occur for reasons related to institutions' business plans or
academic mission. We believe these provisions may ease the burden of
setting up new programs and accelerate the timeframe for offering them.
Accreditation is a significant consideration when establishing a
program because of the expense and work involved in seeking and
maintaining it, but institutions make decisions about programs to offer
based on employment needs, student demand, availability of faculty, and
several other factors. Therefore, the Department does not expect these
final regulations to increase total loan volumes more than 2 percent or
Pell Grant recipients more than 2 percent by 2029 compared to the FY
2020 President's Budget baseline.
Another factor reflected in Table 3 is that we do not expect the
impacts of these final regulations to occur immediately upon
implementation, but to be the result of changes in postsecondary
education over time. Institutions generally undergo accreditation
review every 7 to 10 years, depending upon the accrediting agency and
their status. Additionally, accrediting agencies may develop a new
focus area or geographic scope over time as they increase resources to
expand their operations. To the extent that there is a change in the
institutional accreditation landscape, we would not expect institutions
to change agencies until their next review point, so the impacts of
these final regulations will be gradual.
The changes to the substantive change requirements, which will
allow institutions to respond quickly to market demand and create
undergraduate programs at different credential levels and focus agency
attention on the creation of graduate certificate and masters level
programs where many loan dollars are directed, could lead to expansion
in Federal aid disbursed. The increased volume change of the high
scenario reflects uncertainty about the extent of this potential
expansion, as well as the fact that much of the expansion may involve
online programs subject to forthcoming proposed regulatory changes that
would interact with these final regulations. The number of graduate
programs awarding credentials has increased substantially since the
introduction of graduate PLUS loans in 2006, as has the volume of loans
disbursed to graduate borrowers, as shown in Table 5. These final
regulations will not change the substantive change requirements for
graduate programs. This emphasis reflects the Department's concern
about the growing practice of elevating the level of the credential
required to satisfy occupational licensure requirements. Focusing
accrediting agency attention on graduate programs may slow down or
prevent the creation of some new programs, which we reflect in the
slight reduction in graduate loan volume in Table 2.
[[Page 58902]]
Table 4 41--Programs Awarding Credentials and Credentials Awarded in Selected Years 2006-2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
Programs Awards
-----------------------------------------------------------------------------------------------
2006 2010 2013 2017 2006 2010 2013 2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
Undergraduate Certificates.............................. 50,960 58,870 60,440 64,490 1,461,460 734,880 1,987,740 1,919,950
Public 4 year....................................... 1,890 3,130 4,160 7,970 30,740 34,840 104,860 196,790
Private 4 year...................................... 1,810 2,280 2,490 2,810 21,640 9,990 27,320 27,720
Prop 4 year......................................... 950 1,550 2,150 1,820 30,220 13,680 61,200 61,470
Public 2 year or less............................... 33,570 37,250 36,740 39,020 713,690 409,720 986,440 1,064,240
Private 2 year or less.............................. 1,290 1,050 1,010 890 58,490 22,350 41,920 40,030
Prop 2 year or less................................. 11,440 13,620 13,900 11,990 606,670 244,290 766,010 529,700
+Undergraduate Degrees.................................. 136,190 149,840 161,220 168,980 4,596,970 2,144,470 5,942,860 6,164,090
Public 4 year....................................... 40,000 42,670 46,770 55,080 2,126,290 1,036,150 2,709,700 3,048,600
Private 4 year...................................... 57,240 61,950 67,070 71,550 1,101,850 488,020 1,289,280 1,349,090
Prop 4 year......................................... 4,680 9,460 11,270 7,170 202,920 159,620 519,650 342,520
Public 2 year or less............................... 30,280 31,590 31,880 32,320 1,029,930 413,450 1,282,000 1,343,570
Private 2 year or less.............................. 840 620 570 540 19,480 4,240 13,200 14,090
Prop 2 year or less................................. 3,160 3,550 3,660 2,330 116,510 42,980 129,020 66,210
Graduate Certificates................................... 5,580 7,530 9,920 13,280 74,870 33,990 74,870 74,870
Public 4 year....................................... 2,320 3,250 4,480 6,740 31,620 14,560 48,950 65,420
Private 4 year...................................... 3,000 4,000 4,780 5,860 40,830 17,770 48,450 51,400
Prop 4 year......................................... 260 280 650 680 2,400 1,660 7,420 7,990
Public 2 year or less............................... .......... .......... .......... .......... .......... .......... .......... ..........
Private 2 year or less.............................. .......... .......... .......... .......... .......... .......... .......... ..........
Prop 2 year or less................................. .......... .......... .......... .......... 20 .......... .......... ..........
Graduate Degrees........................................ 44,370 47,970 51,820 59,980 1,465,180 712,760 1,875,660 1,993,430
Public 4 year....................................... 24,850 25,850 27,370 32,250 731,320 335,760 870,070 935,950
Private 4 year...................................... 18,280 20,190 22,270 25,160 672,990 323,390 834,740 899,630
Prop 4 year......................................... 1,230 1,920 2,180 2,580 60,880 53,610 170,840 157,850
Public 2 year or less............................... .......... .......... .......... .......... .......... .......... .......... ..........
Private 2 year or less.............................. .......... .......... .......... .......... .......... .......... .......... ..........
Prop 2 year or less................................. .......... .......... .......... .......... .......... .......... .......... ..........
--------------------------------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------
\41\ U.S. Department of Education analysis of IPEDS completion
data for 2006, 2010, 2013, and 2017. Available at https://nces.ed.gov/ipeds/datacenter/DataFiles.aspx.
Table 5 42--Graduate PLUS and Graduate Unsubsidized Loans Disbursed to Students in Selected Years 2006-2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
AY2005-06 AY2009-10 AY2012-13 AY2016-17
-----------------------------------------------------------------------------------------------------------------
Grad PLUS Grad PLUS Grad PLUS Grad unsub Grad PLUS Grad unsub
--------------------------------------------------------------------------------------------------------------------------------------------------------
Public................................ 12,793,910 1,276,149,977 1,838,645,436 10,232,321,388 2,444,408,219 10,584,552,835
Private............................... 59,288,547 3,909,981,128 4,934,939,609 12,629,730,564 6,094,281,420 13,030,559,389
Proprietary........................... 4,000,483 575,779,471 830,210,361 3,967,504,952 1,106,645,769 3,410,171,851
-----------------------------------------------------------------------------------------------------------------
Total............................. 76,082,940 5,761,910,576 7,603,795,406 26,829,556,904 9,645,335,408 27,025,284,075
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Unsubsidized loans to graduate students not included as not split in volume reports until 2010-11.
---------------------------------------------------------------------------
\42\ FSA Data Center loan volume files available at https://studentaid.ed.gov/sa/about/data-center/student/title-iv.
---------------------------------------------------------------------------
These final regulations also aim to bring greater clarity to the
nature of teach-outs and to create a more orderly process for students
and institutions when institutions are closing precipitously. We seek
through these final regulations to provide students with the
opportunity to finish their program of study and attain their
credential and keep closed school discharges to a minimum to reduce
taxpayer cost.
These final regulations will permit an accrediting agency to
sanction a specific program or location within an institution without
acting against the entire institution if the agency found that only
that program or location was noncompliant. The Department recognizes
that this situation would preclude a student from obtaining a closed
school discharge, since only a program was subject to closure and not
the entire institution. However, accrediting agency actions have rarely
been the sole cause of institutional closure, so the potential
application of this more limited response may not change the level of
closed school discharges significantly.
Nevertheless, students would be entitled to teach-outs that
facilitate program completion and degree attainment. In turn, the
expansion of teach-outs could have budgetary impacts related to
financial aid amounts as students take out loans or grants to complete
their programs. When participating in a teach-out, the receiving
institution may not charge students more than what the closing or
closed institution would have charged for the same courses. If teach-
outs increase significantly, this could result in some increase in loan
volume and Pell Grants to such students. Closed school discharges are a
very small percent of cohort volume, so we do not expect the potential
volume increase associated with increased teach-outs ranges to be
substantial or to contribute to the volume increases presented in Table
2.
[[Page 58903]]
Accounting Statement
As required by OMB Circular A-4 (available at www.whitehouse.gov/sites/default/files/omb/assets/omb/circulars/a004/a-4.pdf), in the
following table we have prepared an accounting statement showing the
classification of the expenditures associated with the provisions of
these final regulations. This table provides our best estimate of the
changes in annual monetized transfers as a result of these final
regulations. Expenditures are classified as transfers from the Federal
Government to affected student loan borrowers and Pell Grant
recipients.
Table 6--Accounting Statement: Classification of Estimated Expenditures
[In millions]
------------------------------------------------------------------------
------------------------------------------------------------------------
Category Benefits
------------------------------------------------------------------------
Restored focus and clarity for
accrediting agency recognition process. Not Quantified
------------------------------------------------------------------------
Not Quantified
------------------------------------------------------------------------
Costs
Category -------------------------------
7% 3%
------------------------------------------------------------------------
Cost of compliance with paperwork $20.1 $20.1
requirements...........................
------------------------------------------------------------------------
Transfers
Category -------------------------------
7% 3%
------------------------------------------------------------------------
Increased Pell Grants transferred to $323.2 $351.9
students who enter postsecondary
education because of programs
established or that remain open because
of accreditation changes or who
participate in teach-outs..............
Change in transfers from increased 1.9 2.2
Federal student loans transferred to
students who enter postsecondary
education because of programs
established or that remain open because
of accreditation changes or who
participate in teach-outs and reduced
closed school discharges from the
Federal Government to affected
borrowers..............................
------------------------------------------------------------------------
Regulatory Alternatives Considered
In the interest of ensuring that these final regulations produce
the best possible outcome, we considered a broad range of proposals
from internal sources as well as from non-Federal negotiators and
members of the public as part of the negotiated rulemaking process. We
reviewed these alternatives in detail in the preamble to the NPRM under
the ``Reasons'' sections accompanying the discussion of each proposed
regulatory provision. Among the items discussed was removing or
revising the limit on how much of a program a non-accredited entity may
offer, which could allow faster expansion of programs but raised
concerns about maintaining program quality. Also, a variety of
alternatives to the proposed elimination of the requirement that an
agency must have conducted accrediting activities for at least two
years prior to seeking recognition when the agency is affiliated with,
or is a division of, a recognized agency were considered by the
negotiating committee. The committee did not agree to a proposal to
make all regional accrediting agencies national but did agree to using
the institutional designation for Department business. The committee
also considered stricter requirements for obtaining approval of
graduate programs. These proposals would likely have had a stronger
negative effect on graduate program creation than these final
regulations.
Paperwork Reduction Act of 1995
As part of its continuing effort to reduce paperwork and respondent
burden, the Department provides the general public and Federal agencies
with an opportunity to comment on proposed and continuing collections
of information in accordance with the Paperwork Reduction Act of 1995
(PRA) (44 U.S.C. 3506(c)(2)(A)). This helps ensure that: The public
understands the Department's collection instructions, respondents can
provide the requested data in the desired format, reporting burden
(time and financial resources) is minimized, collection instruments are
clearly understood, and the Department can properly assess the impact
of collection requirements on respondents.
Sections 600, 602, and 668 contain information collection
requirements. Under the PRA the Department has submitted a copy of
these sections to OMB for its review.
A Federal agency may not conduct or sponsor a collection of
information unless OMB approves the collection under the PRA and the
corresponding information collection instrument displays a currently
valid OMB control number.
Notwithstanding any other provision of law, no person is required
to comply with, or is subject to penalty for failure to comply with, a
collection of information if the collection instrument does not display
a currently valid OMB control number.
In these final regulations, we display the control numbers assigned
by OMB to any information collection requirements adopted in the final
regulations. In the case of a new information collection, the OMB
control number will be issued upon the information collection request
approval.
Discussion
The goal of accreditation is to ensure that institutions of higher
education meet acceptable levels of quality. Accreditation in the
United States involves non-governmental entities as well as Federal and
State government agencies. Accreditation's quality assurance function
is one of the three main elements of oversight governing the HEA's
Federal student aid programs. In order for students to receive Federal
student aid from the Department for postsecondary study, the
institution must be accredited by a ``nationally recognized''
accrediting agency (or, for certain vocational institutions, approved
by a recognized State approval agency), be authorized by the State in
which the institution is located, and receive approval from the
Department through a program participation agreement.
Accrediting agencies, which are private educational associations
[[Page 58904]]
operating in multiple states or with national scope, develop evaluation
criteria and conduct peer evaluations to assess whether institutions
and programs meet those criteria. Institutions and programs that
request an accrediting agency's evaluation and that meet that agency's
criteria are then ``accredited.''
As of April 2019, the Secretary recognized 53 accrediting agencies
that are independent, membership-based organizations designed to ensure
students have access to qualified faculty, appropriate curriculum, and
other support services. Of these 53 accrediting agencies recognized by
the Secretary, 36 are institutional for title IV HEA purposes and 18
are solely programmatic. Institutional accrediting agencies accredit
institutions of higher education, and programmatic accrediting agencies
accredit specific educational programs that prepare students for entry
into a profession, occupation, or vocation. The PRA section will use
these figures in assessing burden. Additionally, we use the number of
title IV eligible institutions noted in the Regulatory Impact Analysis
(1,860 public institutions, 1,704 private institutions, and 1,783
proprietary institutions) as the basis for assessing institutional
burden in the PRA.
Through this process we identified areas where cost savings will
likely occur under the final regulations; however, many of the
associated criteria do not have existing information collection
requests and consequently we did not then assign OMB numbers for data
collection purposes. Instead, we included them in the collections table
in a column titled: ``Estimated savings absent ICR requirement,'' and
they are sometimes referred to as ``hours saved.'' We did not include
these areas of anticipated costs savings in the total burden
calculations.
Section 600.9--State Authorization
Requirements
Under Sec. 600.9(c)(2)(i), the institution must determine in which
State a student is located while enrolled in a distance education or
correspondence course when the institution participates in a State
authorization reciprocity agreement under which it is covered in
accordance with the institution's policies and procedures. The
institution must make such determinations consistently and apply them
to all students.
Under Sec. 600.9(c)(2)(ii), the institution must, upon request,
provide the Secretary with written documentation of its determination
of a student's location, including the basis for such determination.
Burden Calculation
We estimate that, on average, an institution will need 30 minutes
to update its policies and procedures manual to ensure consistent
location determinations for distance education and correspondence
course students. Additionally, we estimate that it will take an
institution 30 minutes to provide the Secretary, upon request, with
written documentation from its policies and procedures manual of its
method of determination of a student's location, including the basis
for such determination.
Table 7--Sec. 600.9(c)(2)(i)
----------------------------------------------------------------------------------------------------------------
Entity Responses Time per response Total hours
----------------------------------------------------------------------------------------------------------------
Public........................................ 1,860 .5 hours (30 min.).............. = 930
Private....................................... 1,704 .5 hours (30 min.).............. = 852
Proprietary................................... 1,783 .5 hours (30 min.).............. = 892
rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
.............. ................................ = 2,674
----------------------------------------------------------------------------------------------------------------
We estimate that no more than five percent of institutions will be
required to provide written documentation to the Secretary regarding
the basis for the institutions' determinations of a State location for
a student. We estimate that 93 public institutions will require 47
hours to provide written documentation of their basis for a location
determination for a student as requested by the Secretary. We estimate
that 85 private institutions will require 43 hours to provide written
documentation of their basis for a location determination for a student
as requested by the Secretary. We estimate that 89 proprietary
institutions will require 45 hours to provide written documentation of
their basis for a location determination for a student as requested by
the Secretary.
Table 8--Sec. 600.9(c)(2)(ii)
----------------------------------------------------------------------------------------------------------------
Entity Responses Time per response Total hours
----------------------------------------------------------------------------------------------------------------
Public........................................ 1,860 5% x .5 hours (30 min.)......... = 47
Private....................................... 1,704 5% x .5 hours (30 min.)......... = 43
Proprietary................................... 1,783 5% x .5 hours (30 min.)......... = 45
rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
.............. ................................ = 135
----------------------------------------------------------------------------------------------------------------
The estimated burden for Sec. 600.9 is 2,809 hours under OMB
Control Number 1845-0144. The estimated institutional cost is $127,416
based on $45.36 per hour for Postsecondary Education Administrators,
from the 2019 Bureau of Labor Statistics Occupational Outlook Handbook.
Section 602.12--Accrediting Experience
Requirements
The Department will require under Sec. 602.12(b)(1) that an
accrediting agency notify the Department of its geographic expansion
and to publicly disclose it on its website.
Burden Calculation
Under Sec. 602.12(b)(1), we estimate that, on average, it will
take an agency 1 hour to inform the Department that it has expanded its
geographic scope and to disclose the information publicly on its
website. However, overall burden will decrease because an agency will
no longer need to request approval of such
[[Page 58905]]
an expansion by the Department, which takes, on average, 20 hours. The
Department has received, on average, one such request annually.
The estimated burden under Sec. 602.12 will increase by 1 hour [1
x 1] under OMB Control Number 1840-0788. In addition, in absence of an
ICR for expansion of scope, we estimate, on average, burden reduction
under Sec. 602.12 will be 19 hours [1 x (20-1)] under OMB Control
Number 1840-0788. The estimated institutional cost is $45.36 based on
$45.36 per hour for Postsecondary Education Administrators, from the
2019 Bureau of Labor Statistics Occupational Outlook Handbook.
Section 602.18--Ensuring Consistency in Decision-Making; Section
602.20--Enforcement of Standards; Section 602.22--Substantive Changes
and Other Reporting; Section 602.23--Operating Procedures All Agencies
Must Have; Section 602.24--Additional Procedures Certain Institutional
Agencies Must Have; and Section 602.26--Notifications of Accrediting
Decisions: All Related to Final Accreditation Agency Policy Changes
Requirements
Under Sec. 602.18(a)(6), we will require that accrediting agencies
publish any policies for retroactive application of an accreditation
decision. The policies must not provide for an effective date that
predates an earlier denial by the agency of accreditation or
preaccreditation to the institution or program or the agency's formal
approval of the institution or program for consideration in the
agency's accreditation or preaccreditation process.
Under Sec. 602.20(a)(2), we will require that accrediting agencies
provide institutions or programs with written timelines for coming into
compliance, which may include intermediate checkpoints as the
institutions progress to full compliance.
Under Sec. 602.20(b), we will require that accrediting agencies
have a policy for taking immediate adverse action when warranted. We
will require both changes to remove overly prescriptive timelines for
accrediting agencies that will emphasize acting in the best interest of
students rather than merely acting swiftly.
Under Sec. 602.20(d), we will add that accrediting agencies could
limit adverse actions to specific programs or additional locations
without taking action against the entire institution. This change will
provide accrediting agencies with more tools to hold programs or
locations within institutions accountable.
The Department will revise substantive change regulations to
provide accrediting agencies more flexibility to focus on the most
important changes. Under Sec. 602.22(a)(3)(i), we will allow
accrediting agencies' decision-making bodies to designate agency senior
staff members to approve or disapprove certain substantive changes.
Under Sec. 602.22(a)(3)(ii), we will allow a 90-day timeframe (180
days for those with significant circumstances) for accrediting agencies
to make final decisions about substantive changes involving written
arrangements for provision of 25 to 50 percent of a program by a non-
eligible entity. Under Sec. 602.22(b), we will add two additional
substantive changes for which an institution placed on probation or
equivalent status must receive prior approval and for which other
institutions must provide notice to the accrediting agency. Under Sec.
602.23(f)(1)(ii), agencies must require that all preaccredited
institutions have a teach-out plan that ensures students completing the
teach-out will meet curricular requirements for professional licensure
or certification, if any. Further, the teach-out plan must include a
list of academic programs offered by the institution, as well as the
names of other institutions that offer similar programs and that could
potentially enter into a teach-out agreement with the institution.
Under final Sec. 602.24(a), agencies are no longer required to use
an institution's business plan, submitted to the Department, to
describe the operation, management, and physical resources of the
branch campus and remove the requirement that an agency may only extend
accreditation to a branch campus after the agency evaluates the
business plan and takes whatever other actions it deems necessary to
determine that the branch campus has enough educational, financial,
operational, management, and physical resources to meet the agency's
standards.
Under Sec. 602.24(c), we will require new requirements for teach-
out plans and teach-out agreements. These changes will add additional
specificity and clarity to teach-out plans and agreements and new
provisions regarding when they will be required, what they must
include, and what accrediting agencies must consider before approving
them.
Under Sec. 602.24(f), we will require that agencies adopt and
apply the definitions of ``branch campus'' and ``additional location''
in 34 CFR 600.2, and on the Secretary's request, conform its
designations of an institution's branch campuses and additional
locations with the Secretary's if it learns its designations diverge.
This change will standardize the use of these terms and alleviate
misunderstandings.
Under Sec. 602.26(b), we will require that accrediting agencies
provide written notice of a final decision of a probation or equivalent
status, or an initiated adverse action to the Secretary, the
appropriate State licensing or authorizing agency, and the appropriate
accrediting agencies at the same time it notifies the institution or
program of the decision.
Further, we will require the institution or program to disclose
such an action within seven business days of receipt to all current and
prospective students.
Burden Calculation
Under Sec. 602.18(a)(6), Sec. 602.20(a)(2), Sec. 602.20(b),
Sec. 602.20(d), Sec. 602.22(a)(3)(i), Sec. 602.22(a)(3)(ii), Sec.
602.22(b), Sec. 602.23(f)(1)(ii), Sec. 602.24(a), Sec. 602.24(c),
Sec. 602.24(f), and Sec. 602.26(b), we estimate that, on average, an
agency will need 12 hours to develop policies regarding submitting
written documentation to the Secretary, which includes obtaining
approval from its decision-making bodies, updating its policies and
procedures manual, distributing the new policies to its institutions,
and training agency volunteers on the changes.
Collectively, the one-time estimated burden for Sec. 602.18(a)(6),
Sec. 602.20(a)(2), Sec. 602.20(b), Sec. 602.20(d), Sec.
602.22(a)(3)(i), Sec. 602.22(a)(3)(ii), Sec. 602.22(b), Sec.
602.23(f)(1)(ii), Sec. 602.24(a), Sec. 602.24(c), Sec. 602.24(f),
and Sec. 602.26(b), is 636 hours (53 x 12) under OMB Control Number
1840-0788. The estimated institutional cost is $28,849 based on $45.36
per hour for Postsecondary Education Administrators, from the 2019
Bureau of Labor Statistics Occupational Outlook Handbook.
[[Page 58906]]
Table 9--Summary of Accrediting Agency Policy Manual Changes
----------------------------------------------------------------------------------------------------------------
Number of
Requirements Hours agencies Total burden
----------------------------------------------------------------------------------------------------------------
Write Policies.................................................. 4 53 212
Obtain Approval................................................. 2 53 106
Update Manual................................................... 2 53 106
Distribute Policies............................................. 1 53 53
Train Volunteers................................................ 3 53 159
-----------------------------------------------
Total....................................................... 12 53 636
----------------------------------------------------------------------------------------------------------------
Section 602.22--Substantive Changes and Other Reporting Requirements
Requirements
Under 602.22(a)(3)(i), for certain substantive changes, the
agency's decision-making body may designate agency senior staff to
approve or disapprove the request.
Burden Calculation
Although a formal ICR does not exist under Sec. Sec.
602.22(a)(3)(i), we estimate that we will save time, on average, by 6
hours given that a designated agency staff member could approve or
disapprove certain substantive changes in place of decision-making
bodies.
The estimated amount of time saved under Sec. 602.22(a)(3)(i) is
318 hours [53 x (-6)] under OMB Control Number 1840-0788. There is no
estimated institutional cost under Sec. 602.22(a)(3)(i), but we
believe that there will be an overall savings of $14,424.48 for
agencies.
Section 602.23--Operating Procedures All Agencies Must Have
Requirements
Under Sec. 602.23(a)(2), we will require that accrediting agencies
make publicly available the procedures that institutions or programs
must follow in applying for substantive changes. While we are aware
that some agencies voluntarily make such procedures publicly available,
we will now require it. Further, we will require that the agencies make
publicly available the sequencing of steps relative to any applications
or decisions required by States or the Department relative to the
agency's preaccreditation, accreditation or substantive change
decisions.
Burden Calculation
Under Sec. 602.23(a)(2), we estimate that, on average, it will
take an agency a one-time effort of 2 hours to make its application
procedures publicly available. We anticipate that accrediting agencies
will use their websites to comply, but any reasonable method is
acceptable if the information is available to the public.
The estimated one-time burden for Sec. 602.23 is 106 hours (53 x
2) under OMB Control Number 1840-0788. The estimated institutional cost
is $4,808 based on $45.36 per hour for Postsecondary Education
Administrators, from the 2019 Bureau of Labor Statistics Occupational
Outlook Handbook.
Section 602.24--Additional Procedures Certain Institutional Agencies
Must Have
Requirements
Under final Sec. 602.24(a), agencies will not have to require an
institution's business plan, submitted to the Department, to describe
the operation, management, and physical resources of the branch campus
and we will remove the requirement that an agency may only extend
accreditation to a branch campus after the agency evaluates the
business plan and takes whatever other actions it deems necessary to
determine that the branch campus has enough educational, financial,
operational, management, and physical resources to meet the agency's
standards. Final Sec. 602.24(c) will establish new requirements for
teach-out plans and teach-out agreements, including when an agency must
require them and what elements the agency must include.
Final Sec. 602.24(f) will remove the requirement that an agency
conduct an effective review and evaluation of the reliability and
accuracy of the institution's assignment of credit hours.
Burden Calculation
We believe the requirements under Sec. 602.24 that we are deleting
are unnecessarily prescriptive and administratively burdensome without
adding significant assurance that the agency review will result in
improved accountability or protection for students or taxpayers.
Institutional accrediting agencies reviewed and extended
accreditation to 53 branch campuses in 2018; and 26 to date in 2019.
Given these figures, we estimate that under final Sec. 602.24(a), an
agency will save, on average, three hours ([2 hours x 53 business plans
= 106]/36 institutional accrediting agencies = 3 hours) not reviewing
business plans for branch campus applications. Under Sec. 602.24(c),
we estimate that an agency will need, on average, an additional hour to
review the extra requirements for teach-out plans and teach-out
agreements of their Title IV gatekeeping institutions (1 hour x 5,347
institutions).
Accrediting agencies review their institutions at different
intervals with a maximum of 10 years. Using a five-year interval as a
``mean,'' agencies will review and evaluate credit hours of 5,347 Title
IV gatekeeping institutions every five years. Under Sec. 602.24(f), we
estimate that accrediting agencies have conducted the one-time review
and evaluation of 80 percent (4,277) of their institutions' credit
hours given the requirement became effective eight years ago (2011)
leaving, no more than likely, 20 percent (1,070) of institutions'
credit hours to be reviewed and evaluated.
Collectively, under Sec. 602.24(a), (c), and (f), we estimate, on
average, added burden of 5,347 hours (1 x 5,347); and 2,246 saved hours
(106 + 2,140) if an ICR was associated with the final changes to lift
required review of institutions' business plans and credit hours.
The estimated institutional cost is $242,540 based on $45.36 per
hour for Postsecondary Education Administrators, from the 2019 Bureau
of Labor Statistics Occupational Outlook Handbook.
[[Page 58907]]
Table 10--Summary of Proposed Burden and Hours Saved for Additional Procedures Certain Institutional Agencies
Must Have
----------------------------------------------------------------------------------------------------------------
Changes Hours Branch campus Total burden Hours saved
----------------------------------------------------------------------------------------------------------------
Business Plans--Applications.................... 2 53 .............. 106
Teach-out Plans & Agreements.................... 1 5,347 5,347 ..............
Credit Hours.................................... 2 x 5,347 x 20 .............. 2,140
---------------------------------------------------------------
Total....................................... 1 .............. 5,347 2,246
----------------------------------------------------------------------------------------------------------------
Section 602.31--Agency Applications and Reports To Be Submitted to the
Department
Requirements
Given the increased number of Freedom of Information Act (FOIA)
requests, in Sec. 602.31(f), we will require that accrediting agencies
redact personally identifiable information and other sensitive
information prior to sending documents to the Department to help
prevent public disclosure of that sensitive information.
Burden Calculation
In FY 2018, the Department closed 10 FOIA requests that were
associated with accreditation. The estimated calculations are based on
the time Department staff spent redacting PII, not the total time staff
used to conduct searches and process the requests. Using the FY 2018
FOIA data related to accrediting agencies, we estimate that, on
average, it will take an agency 5.37 hours to comply with the final
redaction requirements under Sec. 602.31(f).
The estimated burden for Sec. 602.31 is 285 hours ([285 hours/53
agencies] = 5.37) under OMB Control Number 1840-0788. The estimated
institutional cost is $12,928 based on $45.36 per hour for
Postsecondary Education Administrators, from the 2019 Bureau of Labor
Statistics Occupational Outlook Handbook.
Table 11--Summary of Burden for Agencies to Redact PII
----------------------------------------------------------------------------------------------------------------
Total cost
Hours Cost per hour burden Per agency
----------------------------------------------------------------------------------------------------------------
Total................................... 285 $45.36 $12,928 $244
----------------------------------------------------------------------------------------------------------------
Section 602.32--Procedures for Applying for Recognition, Renewal of
Recognition, or for Expansion of Scope, Compliance Reports, and
Increases in Enrollment
Requirements
Under Sec. 602.32(a), we will specify what accrediting agencies
preparing for recognition renewal will submit to the Department 24
months prior to the date their current recognition expires.
Under Sec. 602.32(j)(1), we will outline the process for an agency
seeking an expansion of scope, either as a part of the regular renewal
of recognition process or during a period of recognition.
Burden Calculation
Under Sec. 602.32(a), we anticipate that, on average, it will take
an agency 3 hours to gather, in conjunction with materials required by
Sec. 602.31(a), a list of all institutions or programs that the agency
plans to consider for an award of initial or renewed accreditation over
the next year or, if none, over the succeeding year, and any
institutions subject to compliance reports or reporting requirements.
Also, under Sec. 602.32(j)(1), we anticipate that, on average, it will
take an agency 20 hours to compose and submit a request for an
expansion of scope of recognition.
Over the last five years, the Department has received fewer than
five requests for expansion of scope.
The estimated burden for Sec. 602.32 is 179 hours (53 x 3) + (1 x
20) under OMB Control Number 1840-0788. The estimated institutional
cost is $8,119 based on $45.36 per hour for Postsecondary Education
Administrators, from the 2019 Bureau of Labor Statistics Occupational
Outlook Handbook.
Section 602.36--Senior Department Official's Decision
Requirements
Under final Sec. [thinsp]602.36(f), the SDO will determine whether
an agency is compliant or substantially compliant, which will give
accrediting agencies opportunities to make minor modifications to
reflect progress toward full compliance using periodic monitoring
reports.
Burden Calculation
If we determine that an agency is substantially compliant, the SDO
will allow the agency to submit periodic monitoring reports for review
by Department staff in place of the currently used compliance report;
the compliance report, requires a review by the NACIQI, attendance at
one of its bi-annual meetings, and conceivably comments filed with the
SDO and an appeal to the Secretary. From 2014 through 2018, the
Department reviewed 17 compliance reports. Under final Sec.
[thinsp]602.36(f) these 17 compliance reports would have had the
following designations: Five monitoring reports (one annually); two
requiring both compliance and monitoring reports (less than one
annually); and 10 (two annually) as compliance reports. Using data from
our findings during reviews, we anticipate that final changes will
reduce the burden on an agency.
If an accrediting agency is required to submit a monitoring report,
we estimate that, on average, the final changes will save an agency 72
hours for travel and meeting attendance, given we will not require
attendance at one of NACIQI's bi-annual meetings unless the agency does
not address the initial areas of noncompliance satisfactorily through
the use of monitoring reports. However, if we require an accrediting
agency to submit both a monitoring report and a compliance report, we
estimate that the final changes in Sec. [thinsp]602.36(f) will
increase the burden for an accrediting agency by 8 hours as the agency
completes its application for renewal of recognition by the Secretary.
[[Page 58908]]
We estimate that, on average, the burden for Sec. [thinsp]602.36
will increase 8 hours (1 x 8) under OMB Control Number 1840-0788.
However, considering the time saved for travel, we estimate (72 - 8 =
64) 64 saved hours overall. The estimated institutional cost is $363
based on $45.36 per hour for Postsecondary Education Administrators,
from the 2019 Bureau of Labor Statistics Occupational Outlook Handbook.
Table 12--Summary of Burden and Hours Saved Using Monitoring Reports
----------------------------------------------------------------------------------------------------------------
Report type Number Hours Total burden Hours saved
----------------------------------------------------------------------------------------------------------------
Monitoring...................................... 1 72 .............. 72
Monitoring and Compliance....................... 1 8 8 ..............
----------------------------------------------------------------------------------------------------------------
Section 668.26--End of an Institution's Participation in the Title IV,
HEA Programs
Requirements
Under final Sec. [thinsp]668.26, the Secretary may permit an
institution that has ended its participation in title IV programs to
continue to originate, award, or disburse title IV funds for up to 120
days under specific circumstances. The institution must notify the
Secretary of its plans to conduct an orderly closure in accordance with
its accrediting agency, teach out its students, agree to abide by the
conditions of the program participation agreement in effect at the time
of the loss of participation, and provide written assurances of the
health and safety of the students, the adequate financial resources to
complete the teach-out and the institution is not subject to adverse
action by the institution's State authorizing body or the accrediting
agency.
Burden Calculation
We estimate that, on average, an institution will need 5 hours to
draft, and finalize for the appropriate institutional management
signature, the written request for extension of eligibility from the
Secretary. We anticipate that 5 institutions may utilize this
opportunity annually.
Table 13--Sec. 668.26
----------------------------------------------------------------------------------------------------------------
Time per
Respondent Responses Response Total hours
(hours)
----------------------------------------------------------------------------------------------------------------
Public.......................................................... 1 5 = 5
Private......................................................... 2 5 = 10
Proprietary..................................................... 2 5 = 10
-----------------------------------------------
Total....................................................... .............. .............. = 25
----------------------------------------------------------------------------------------------------------------
The estimated burden for Sec. [thinsp]668.26 is 25 hours under OMB
Control Number 1845-0156. The estimated institutional cost is $1,134
based on $45.36 per hour for Postsecondary Education Administrators,
from the 2019 Bureau of Labor Statistics Occupational Outlook Handbook.
Section 668.43--Institutional Information
Requirements
The final regulations in Sec. [thinsp]668.43(a)(5) will require an
institution to disclose whether the program will fulfill educational
requirements for licensure or certification if the program is designed
to or advertised as meeting such requirements. Institutions will be
required to disclose, for each State, whether the program did or did
not meet such requirements, or whether the institution had not made
such a determination.
The final regulations in Sec. [thinsp]668.43(a)(11) will revise
the information about an institution's transfer of credit policies to
require the disclosure of any types of institutions from which the
institution will not accept transfer credits. Institutions will also be
required to disclose any written criteria used to evaluate and award
credit for prior learning experience.
The final regulations in Sec. [thinsp]668.43(a)(12) will require
institutions to provide disclosures in the program description
regarding written arrangements under which an entity other than the
institution itself provides all or part of a program.
The final regulations will add disclosure requirements that are in
statute but not reflected fully in the regulations as well as new
disclosure requirements. These disclosures will include: In Sec.
[thinsp]668.43(a)(13), the percentage of the institution's enrolled
students disaggregated by gender, race, ethnicity, and those who are
Pell Grant recipients; in Sec. [thinsp]668.43(a)(14) placement in
employment of, and types of employment obtained by, graduates of the
institution's degree or certificate programs; in Sec.
[thinsp]668.43(a)(15) the types of graduate and professional education
in which graduates of the institution's four-year degree programs
enrolled; in Sec. [thinsp]668.43(a)(16) the fire safety report
prepared by the institution pursuant to Sec. [thinsp]668.49; in Sec.
[thinsp]668.43(a)(17) the retention rate of certificate- or degree-
seeking, first-time, full-time, undergraduate students; and in Sec.
[thinsp]668.43(a)(18) institutional policies regarding vaccinations.
The final regulations in Sec. [thinsp]668.43(a)(19) will require
an institution to disclose to students if its accrediting agency
requires it to maintain a teach-out plan under Sec.
[thinsp]602.24(c)(1), and to indicate the reason why the accrediting
agency required such a plan.
The final regulations in Sec. [thinsp]668.43(a)(20) will require
that an institution must disclose enforcement actions or prosecutions
by law enforcement agencies that, upon a final judgment, would result
in an adverse action by an accrediting agency, revocation of State
authorization, or suspension, limitation or termination of eligibility
to participate in title IV. Investigations that have not progressed to
pending enforcement actions or prosecutions need not be disclosed--
regardless of their subject matter.
The final regulations will add a new paragraph (c) requiring an
institution to make direct disclosures to individual students in
certain circumstances.
[[Page 58909]]
Institutions will be required to disclose to a prospective student that
the program in which they intended to enroll did not meet the
educational requirements for licensure in the State in which the
student was located, or if such a determination of whether the program
met the licensure requirements in that State had not been made. We will
also require an institution to make a similar disclosure to a student
who was enrolled in a program previously meeting those requirements
which ceased to meet the educational requirements for licensure in that
State. The final regulations will hold the institutions responsible for
establishing and consistently applying policies for determining the
State in which each of its students is located. Such a determination
will have to be made at the time of initial enrollment, and upon
receipt of information from the student, in accordance with
institutional policies, that his or her location had changed to another
State. The final regulations require institutions to provide the
Secretary, on request, with written documentation of its determination
regarding a student's location.
Comments
Several commenters disagreed with the proposed estimated time in
the NPRM regarding the licensure and certification disclosure
requirements as well as the estimated time to gather and complete the
individualized disclosures. They felt that the proposed hours per
institution was underestimating the time it would take an institution
to research and maintain programmatic license or certification
information.
Discussion
As we stated in the preamble, the Department does not require that
an institution determine the licensure and certification requirements
for their eligible programs for each State. If an institution does not
make such a determination for each State, it can inform students that
it has not made such a determination and comply with the regulations.
The Department has not made an adjustment to the estimated burden
hours.
Burden Calculation
We anticipate that most institutions will provide this disclosure
information electronically on either the general institution website or
individual program websites as required. Using data from the National
Center for Educational Statistics, there were approximately 226,733
certificate and degree granting programs in 2017 identified for the
public, private and proprietary sectors. Of those, public institutions
offered 134,387 programs, private institutions offered 70,678 programs,
and proprietary institutions offered 21,668 programs.
For Sec. 668.43(a)(5)(v), we estimate that five percent or 11,337
of all programs will be designed for specific professional licenses or
certifications required for employment in an occupation or is
advertised as meeting such State requirements. We further estimate that
it will take an institution an estimated 50 hours per program to
research individual State requirements, determine program compatibility
and provide a listing of the States where the program curriculum meets
the State requirements, where it does not meet the State requirements,
or list the States where no such determination has been made. We base
this estimate on institutions electing not to research and report
licensing requirements for States in which they had no enrollment or
expressed interest. Additionally, we believe that some larger
institutions and associations have gathered such data and have shared
it with other institutions so there is less burden as they complete
this research.
The estimated burden for Sec. 668.43(a)(5)(v) will be 566,850
hours under OMB Control Number 1845-0156.
Table 14--Sec. 668.43(a)(5)(v)
----------------------------------------------------------------------------------------------------------------
Time per
Respondent Responses response Total hours
(hours)
----------------------------------------------------------------------------------------------------------------
Public.......................................................... 6,719 50 = 335,950
Private......................................................... 3,534 50 = 176,700
Proprietary..................................................... 1,084 50 = 54,200
-----------------------------------------------
Total....................................................... .............. .............. = 566,850
----------------------------------------------------------------------------------------------------------------
For Sec. 668.43(a)(11) through (20), we estimate that it will take
institutions an average of 2 hours to research, develop and post on
institutional or programmatic websites the required information. The
estimated burden for Sec. 668.43(a)(13) through (20) will be 10,694
hours under OMB Control Number 1845-0156.
Table 15--Sec. 668.43(a)(11) Through (20)
----------------------------------------------------------------------------------------------------------------
Time per
Respondent Responses response Total hours
(hours)
----------------------------------------------------------------------------------------------------------------
Public.......................................................... 1,860 2 = 3,720
Private......................................................... 1,704 2 = 3,408
Proprietary..................................................... 1,783 2 = 3,566
-----------------------------------------------
Total....................................................... .............. .............. = 10,694
----------------------------------------------------------------------------------------------------------------
For Sec. 668.43(c), we anticipate that institutions will provide
this information electronically to prospective students regarding the
determination of a program's curriculum to meet State requirements for
students located in that State or if no such determination has been
made. Likewise, we anticipate that institutions will provide this
information electronically to enrolled students when a determination
has been made that the
[[Page 58910]]
program's curriculum no longer meets State requirements. We estimate
that institutions will take an average of 2 hours to develop the
language for the individualized disclosures. We estimate that it will
take an additional average of 4 hours for the institutions to disclose
this information to prospective and enrolled students for a total of 6
hour of burden. We estimate that five percent of the institutions will
meet the criteria to require these disclosures. The estimated burden
for Sec. 668.43(c) will be 1,602 hours under OMB Control Number 1845-
0156.
Table 16--Sec. 668.43(c)
----------------------------------------------------------------------------------------------------------------
Time per
Respondent Responses response Total hours
(hours)
----------------------------------------------------------------------------------------------------------------
Public........................................................ 1,860 x 5% = 93 6 = 558
Private....................................................... 1,704 x 5% = 85 6 = 510
Proprietary................................................... 1,783 x 5% = 89 6 = 534
-------------------------------------------------
Total..................................................... ................ .............. = 1,602
----------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------
Section Total hours
------------------------------------------------------------------------
668.43(a)(5)............................................ 566,850
668.43(a)(11)-(20)...................................... 10,694
668.43(c)............................................... 1,602
------------------------------------------------------------------------
The total estimated burden for final Sec. 668.43 will be 579,146
hours under OMB Control Number 1845-0156. The estimated institutional
cost is $26,270,062.56 based on $45.36 per hour for Postsecondary
Education Administrators, from the 2019 Bureau of Labor Statistics
Occupational Outlook Handbook.
668.50--Institutional Disclosures for Distance or Correspondence
Programs
Requirements
The final regulatory package will remove the current regulatory
requirements in Sec. 668.50, add in its place a severability
provision.
Burden Calculation
The final regulatory package will remove the current regulatory
requirements in Sec. 668.50. This removes seven public disclosures
that institutions offering distance education or correspondence courses
were required to provide to students enrolled or seeking enrollment in
such programs. These disclosures included whether the distance
education program was authorized by the State where the student
resided, if the institution was part of a State reciprocity agreement
and consequences of a student moving to a State where the institution
did not meet State authorization requirements.
Other disclosures covered the process of submitting a complaint to
the appropriate State agency where the main campus is located, process
of submitting a complaint if the institution is covered under a State
reciprocity agreement, disclosure of adverse actions initiated by the
institution's State entity related to distance education, disclosure of
adverse actions initiated by the institution accrediting agency, the
disclosure of any refund policy required by any State in which the
institution enrolls a student, and disclosure of whether the distance
education program meets the applicable prerequisites for professional
licensure or certification in the State where the student resides, if
such a determination has been made. Also, there were two disclosures
that were required to be provided directly to currently enrolled and
prospective students in either distance education. Those disclosures
included notice of an adverse action taken by a State or accrediting
agency related to the distance education program and provided within 30
days of when the institution became aware of the action; and, a notice
of the institution's determination the distance education program no
longer meets the prerequisites for licensure or certification of a
State. This disclosure had to be made within seven days of such a
determination.
The removal of these regulations will eliminate the burden as
assessed Sec. 668.50 which is associated with OMB Control Number 1845-
0145. The total burden hours of 152,405 are currently in the
information collection 1845-0145 that will be discontinued upon the
final effective date of the regulatory package. The estimated
institutional cost savings is $-6,913,091 based on $45.36 per hour for
Postsecondary Education Administrators, from the 2019 Bureau of Labor
Statistics Occupational Outlook Handbook.
Consistent with the discussion above, the following chart describes
the sections of the final regulations involving information collection,
the information being collected and the collections that the Department
will submit to OMB for approval and public comment under the PRA, and
the estimated costs associated with the information collections. The
monetized costs of the increased burden on institutions and accrediting
agencies using wage data developed using Bureau of Labor Statistics
data, available at https://www.bls.gov/ooh/management/postsecondary-education-adminstrators.htm is $26,696,265 as shown in the chart below.
At the effective date of July 1, 2020, there will be a savings of
$7,033,522 for a total annual net cost of $19,662,744. This cost is
based on the estimated hourly rate of $45.36 for institutions and
accrediting agencies.
[[Page 58911]]
Collection Information
----------------------------------------------------------------------------------------------------------------
Estimated savings
Regulatory section Information collection OMB control No. and Estimated costs absent ICR
estimated burden requirement
----------------------------------------------------------------------------------------------------------------
Sec. Institution must determine OMB 1845-0144. We $127,417..........
600.9(c)(2)(i), in which State a student estimate that the
Sec. is located while enrolled burden will
600.9(c)(2)(ii)--St in a distance education or increase by 2,809
ate authorization. correspondence course when hours.
the institution
participates in a State
authorization reciprocity
agreement under which it
is covered in accordance
with the institution's
policies and procedures,
and make such
determinations
consistently and apply
them to all students.
Institution must, upon
request, provide the
Secretary with written
documentation of its
determination of a
student's location,
including the basis for
such determination.
Sec. 602.12(b)(1)-- Agency will notify the OMB 1840-0788. We $45............... We estimate that,
Accrediting Department of a geographic estimate that the on average,
experience. expansion and publicly burden will agencies will save
disclose it on the increase by 1 hour. 19 hours given
agency's website, without they will inform
requesting permission. the Department of
a geographic
expansion rather
than request it,
amounting to a
$861.84 savings.
Sec. 602.18(a)(6)-- Agency will publish and OMB 1840-0788. We $28,849...........
Ensuring distribute new policies, estimate that the
consistency in with detailed burden will
decision-making. requirements. increase by 636
hours.
Sec. 602.20(a)(2);
Sec. 602.20(b),
Sec. 602.20(d)--
Enforcement of
standards.
Sec.
602.22(a)(3)(i),
Sec.
602.22(a)(3)(ii),
Sec. 602.22(b)--
Substantive changes
and other reporting
requirements.
Sec.
602.23(f)(1)(ii)--O
perating procedures
all agencies must
have.
Sec. 602.24(a),
Sec. 602.24(c),
Sec. 602.24(f)--
Additional
procedures certain
institutional
agencies must have.
Sec. 602.26(b)--
Notifications of
accrediting
decisions.
Sec. Agency will designate a .................... .................. We estimate
602.22(a)(3)(i)--Su staff member to approve or agencies will
bstantive changes disapprove certain save, on average,
and other reporting substantive changes. 318 hours, given
requirements. designated
substantive
approvals could be
determined by a
senior staff
member in place of
the now required
decision-making
body, amounting to
$14,424.48.
Sec. 602.23(a)(2), Agency will make publicly OMB 1840-0788. We $4,808............
Sec. available the procedures estimate that the
602.23(f)(1)(ii)--O that institutions or burden will
perating procedures programs must follow in increase by 106
all agencies must applying for hours.
have. accreditation,
preaccreditation, or
substantive changes and
the sequencing of those
steps relative to any
applications or decisions
required by States or the
Department relative to the
agency's preaccreditation,
accreditation or
substantive change
decisions; require that
all preaccredited
institutions have a teach-
out plan with specific
requirements.
Sec. 602.24-- Agency will delete existing OMB 1840-0788. We $242,540.......... We estimate that
Additional credit hour policy estimate that the agencies will save
procedures certain requirements and overly burden will overall, on
institutional prescriptive language; and increase by 5,347 average, 2,246
agencies must have. add new language with hours. hours given the
definition clarifications. final regulation
will delete
existing
requirements
related to
evaluating credit
hours amounting to
a $101,878.56
savings.
Sec. 602.31(f)-- Agency will redact OMB 1840-0788. We $12,928...........
Agency applications personally identifiable estimate that the
and reports to be information and other burden will
submitted to the sensitive information increase by 285
Department. prior to sending documents hours.
to the Department.
[[Page 58912]]
Sec. 602.32(a), Specifies what accrediting OMB 1840-0788. We $8,119............
Sec. agencies preparing for estimate that the
602.32(j)(1)--Proce recognition renewal will burden will
dures for applying submit to the Department increase by 179
for recognition, 24 months prior to the hours.
renewal of date their current
recognition, or for recognition expires;
expansion of scope, outlines the process for
compliance reports, an agency seeking an
and increases in expansion of scope, either
enrollment. as a part of the regular
renewal of recognition
process or during a period
of recognition.
Sec. 602.36(f)-- Senior Department Official OMB 1840-0788. We $363.............. The increase in
Senior Department will determine whether an estimate that the burden does not
official's agency is compliant or burden will reflect the time
decision. substantially compliant, increase by 8 saved for
which will give hours. preparing and
accrediting agencies attending NACIQI
opportunities to make meetings. We
minor modifications to estimate that
reflect progress toward there will be 72
full compliance using hours saved, on
periodic monitoring average, amounting
reports. to $3,265.92.
Sec. 668.26--End Secretary may permit an OMB 1845-0156. We $1,134............
of an institution's institution that has ended estimate that the
participation in its participation in title burden will
the Title IV, HEA IV programs to continue to increase by 25
programs. originate, award, or hours.
disburse title IV funds
for up to 120 days under
specific circumstances.
The institution must
notify the Secretary of
its plans to conduct an
orderly closure in
accordance with its
accrediting agency, teach
out its students, agree to
abide by the conditions of
the program participation
agreement in effect at the
time of the loss of
participation, and provide
written assurances of the
health and safety of the
students, the adequate
financial resources to
complete the teach-out and
the institution is not
subject to adverse action
by the institution's State
authorizing body or the
accrediting agency.
Sec. 668.43(a)(5)-- The final regulations will OMB 1845-0156. We $25,712,316.......
Institutional require an institution to estimate that the
information. disclose whether a program burden will
will fulfill educational increase by 566,850
requirements for licensure hours.
or certification if the
program is designed to or
advertised as meeting such
requirements. Institutions
will be required to
disclose, for each State,
whether the program did or
did not meet such
requirements, or whether
the institution had not
made such a determination.
Sec. 668.43(a)(11) The final regulations will OMB 1845-0156. We $485,080..........
through (20)-- add disclosure estimate that the
Institutional requirements that are in burden will
information. statute but not reflected increase by 10,694
fully in the regulations hours.
as well as new disclosure
requirements.
Sec. 668.43(c)-- The final regulations will OMB 1845-0156. We $72,667...........
Institutional require direct disclosure estimate that the
information. to individual students in burden will
circumstances where an increase by 1,602
offered program no longer hours.
met the education
requirements for licensure
in a State where a
prospective student was
located, as well as to
students enrolled in a
program that ceased to
meet such requirements.
Sec. 668.50-- The final regulations will OMB 1845-0145. We This represents a
Institutional remove and replace this estimate a decrease cost savings of
Disclosure for language with a of 152,405 hours. $6,913,091.
Distance or severability provision. We will discontinue
Correspondence The final regulations have this collection
Programs. moved some of the upon the final
disclosure requirements effective date of
from this section to Sec. the regulatory
668.43. Other package.
requirements have been
deemed duplicative.
----------------------------------------------------------------------------------------------------------------
The total burden hours and change in burden hours associated with
each OMB Control number affected by the regulations follows:
[[Page 58913]]
------------------------------------------------------------------------
Total Change in
Control No. burden burden
hours hours
------------------------------------------------------------------------
1840-0788..................................... 10,550 +6,562
1845-0144..................................... 2,969 +2,809
1845-0145..................................... -152,405 -152,405
1845-0156..................................... 579,171 +579,171
------------------------------------------------------------------------
If you want to comment on the final information collection
requirements, please send your comments to the Office of Information
and Regulatory Affairs, OMB, Attention: Desk Officer for U.S.
Department of Education. Send these comments by email to
[email protected] or by fax to (202) 395-6974. You may also send
a copy of these comments to the Department contact named in the
ADDRESSES section of this preamble.
We have prepared an Information Collection Request (ICR) for these
collections. You may to review the ICR, which is available at
www.reginfo.gov. Click on Information Collection Review. These final
collections are identified as final collections 1840-0788, 1845-0012,
1845-0144, 1845-0145, and 1845-0156.
Regulatory Flexibility Act Certification
The Secretary certifies that these final regulations will not have
a significant economic impact on a substantial number of small
entities.
Of the entities that the final regulations will affect, we consider
many institutions to be small. The Department recently proposed a size
classification based on enrollment using IPEDS data that established
the percentage of institutions in various sectors considered to be
small entities, as shown in Table 17. We described this size
classification in the NPRM published in the Federal Register on July
31, 2018 for the proposed borrower defense rule (83 FR 37242, 37302).
The Department discussed the proposed standard with the Chief Counsel
for Advocacy of the Small Business Administration, and while no change
has been finalized, the Department continues to believe this approach
better reflects a common basis for determining size categories that is
linked to the provision of educational services.
Table 17--Small Entities Under Enrollment Based Definition
----------------------------------------------------------------------------------------------------------------
Level Type Small Total Percent
----------------------------------------------------------------------------------------------------------------
2-year................................ Public.................. 342 1,240 28
2-year................................ Private................. 219 259 85
2-year................................ Proprietary............. 2,147 2,463 87
4-year................................ Public.................. 64 759 8
4-year................................ Private................. 799 1,672 48
4-year................................ Proprietary............. 425 558 76
-----------------------------------------------
Total............................. ........................ 3,996 6,951 57
----------------------------------------------------------------------------------------------------------------
However, we do not expect the final regulations to have a
significant economic impact on small entities. Nothing in the final
regulations will compel institutions, small or not, to engage in
substantive changes to programs that will trigger reporting to
accrediting agencies or the Department. The final regulations will
consolidate or relocate several institutional disclosures and add
disclosure requirements under Sec. 668.43, including disclosures
relating to whether a program meets requirements for licensure,
transfer of credit policies, written criteria to evaluate and award
credit for prior learning experience, and written agreements under
which an entity other than the institution itself provides all or part
of a program. The final regulations will also add disclosure
requirements that exist in statute but are not currently reflected in
the regulations, including: (1) The percentage of the institution's
enrolled students who are Pell Grant recipients, disaggregated by race,
ethnicity, and gender; (2) placement in employment of, and types of
employment obtained by, graduates of the institution's degree or
certificate programs if its accrediting agency or State required it to
calculate such rates; (3) the types of graduate and professional
education in which graduates of the institution's four-year degree
programs enrolled; (4) the fire safety report prepared by the
institution pursuant to Sec. 668.49; (5) the retention rate of
certificate- or degree-seeking, first-time, full-time, undergraduate
students; and (6) institutional policies regarding vaccinations. The
small institutions that have distance education or correspondence
programs will benefit from the elimination of the disclosure
requirement related to the complaints process. Across all institutions,
the net result of the institutional disclosure changes is $19,485,522
and there is no reason to believe the burden will fall
disproportionately on small institutions. Using the 57 percent figure
for small institutions in Table 17, the estimated cost of the
disclosures in the final regulations for small institutions is
$11,106,748. Institutions of any size will benefit from the opportunity
to seek out a different or additional accreditation in a timeframe that
suits them, but there is no requirement to do so.
The other group affected by the final regulations are accrediting
agencies. The State agencies that act as accrediting are not small, as
we define public institutions as ``small organizations'' if they are
operated by a government overseeing a population below 50,000.
The Department does not have revenue information for accrediting
agencies and believes most organize as nonprofit entities that we
define as ``small entities'' if they are independently owned and
operated and not dominant in their field of operation. While dominance
in accreditation is hard to determine, as it currently stands, the
Department believes regional accrediting agencies are dominant within
their regions and programmatic accrediting agencies very often dominate
their field. Therefore, we do not consider the 53 accrediting agencies
to be small entities.
Even if we considered the accrediting agencies to be small
entities, we designed these final regulations to grant the agencies
greater operational flexibility and to reduce administrative burden so
they can focus on higher risk changes to institutions and programs.
Nothing in the final regulations will require accrediting agencies to
expand their operations or take on new institutions, but they will give
them that opportunity. There could even be potential opportunities for
accrediting agencies that are small entities to develop in specialized
areas and potentially grow.
Thus, the Department believes small entities will experience
regulatory relief and a positive economic impact as a result of these
final regulations with effects that will develop over years as
[[Page 58914]]
accrediting agencies and institutions decide how to react to the
changes in the final regulations.
Intergovernmental Review
These programs are subject to the requirements of Executive Order
12372 and the regulations in 34 CFR part 79. One of the objectives of
the Executive order is to foster an intergovernmental partnership and a
strengthened federalism. The Executive order relies on processes
developed by State and local governments for coordination and review of
proposed Federal financial assistance.
This document provides early notification of our specific plans and
actions for these programs.
Assessment of Educational Impact
Based on the response to the NPRM and on our review, we have
determined that these final regulations do not require transmission of
information that any other agency or authority of the United States
gathers or makes available.
Federalism
Executive Order 13132 requires us to ensure meaningful and timely
input by State and local elected officials in the development of
regulatory policies that have federalism implications. ``Federalism
implications'' means substantial direct effects on the States, on the
relationship between the National Government and the States, or on the
distribution of power and responsibilities among the various levels of
government.
In the NPRM we noted that Sec. Sec. 600, 602, 603, and 668 may
have federalism implications and encouraged State and local elected
officials to review and provide comments on these final regulations. In
the Public Comment section of this preamble, we discuss any comments we
received on this subject.
Accessible Format: Individuals with disabilities can obtain this
document in an accessible format (e.g., Braille, large print,
audiotape, or compact disc) on request to one of the program contact
persons listed under FOR FURTHER INFORMATION CONTACT.
Electronic Access to This Document: The official version of this
document is the document published in the Federal Register. You may
access the official edition of the Federal Register and the Code of
Federal Regulations at www.govinfo.gov.
At this site you can view this document, as well as all other
documents of this Department published in the Federal Register, in text
or Adobe Portable Document Format (PDF). To use PDF, you must have
Adobe Acrobat Reader, which is available free at the site.
You may also access documents of the Department published in the
Federal Register by using the article search feature at:
www.federalregister.gov. Specifically, through the advanced search
feature at this site, you can limit your search to documents published
by the Department.
List of Subjects
34 CFR Part 600
Colleges and universities, Foreign relations, Grant programs--
education, Loan programs--education, Reporting and recordkeeping
requirements, Student aid, Vocational education.
34 CFR Part 602
Colleges and universities, Reporting and recordkeeping
requirements.
34 CFR Part 603
Colleges and universities, Vocational education.
34 CFR Part 654
Grant programs-education, Reporting and recordkeeping requirements,
Scholarships and fellowships.
34 CFR Part 668
Administrative practice and procedure, Colleges and universities,
Consumer protection, Grant programs--education, Loan programs--
education, Reporting and recordkeeping requirements, Selective Service
System, Student aid, Vocational education.
34 CFR Part 674
Loan programs-education, Reporting and recordkeeping, Student aid.
Dated: October 18, 2019.
Betsy DeVos,
Secretary of Education.
For the reasons discussed in the preamble, the Secretary of
Education amends parts 600, 602, 603, 654, 668 and 674 of title 34 of
the Code of Federal Regulations as follows:
PART 600--INSTITUTIONAL ELIGIBILITY UNDER THE HIGHER EDUCATION ACT
OF 1965 AS AMENDED
0
1. The authority citation for part 600 continues to read as follows:
Authority: 20 U.S.C. 1001, 1002, 1003, 1088, 1091, 1094, 1099b,
and 1099c, unless otherwise noted.
0
2. Section 600.2 is amended by:
0
a. Adding in alphabetical order a definition for ``Additional
location'';
0
b. Revising the definition of ``Branch Campus'';
0
c. Adding in alphabetical order a definition for ``Preaccreditation'';
0
d. Removing the definition of ``Preaccredited'';
0
e. Adding in alphabetical order a definition for ``Religious mission'';
0
f. Revising in alphabetical order the definition of ``State
authorization reciprocity agreement'';
0
g. Adding in alphabetical order definitions for Teach-out'' and
``Teach-out agreement''; and
0
h. Revising the definition of ``Teach-out plan''.
The additions and revisions read as follows:
Sec. 600.2 Definitions.
* * * * *
Additional location: A facility that is geographically apart from
the main campus of the institution and at which the institution offers
at least 50 percent of a program and may qualify as a branch campus.
* * * * *
Branch campus: An additional location of an institution that is
geographically apart and independent of the main campus of the
institution. The Secretary considers a location of an institution to be
independent of the main campus if the location--
(1) Is permanent in nature;
(2) Offers courses in educational programs leading to a degree,
certificate, or other recognized educational credential;
(3) Has its own faculty and administrative or supervisory
organization; and
(4) Has its own budgetary and hiring authority.
* * * * *
Preaccreditation: The status of accreditation and public
recognition that a nationally recognized accrediting agency grants to
an institution or program for a limited period of time that signifies
the agency has determined that the institution or program is
progressing toward full accreditation and is likely to attain full
accreditation before the expiration of that limited period of time
(sometimes referred to as ``candidacy'').
* * * * *
Religious mission: A published institutional mission that is
approved by the governing body of an institution of postsecondary
education and that includes, refers to, or is predicated upon religious
tenets, beliefs, or teachings.
* * * * *
State authorization reciprocity agreement: An agreement between two
or more States that authorizes an
[[Page 58915]]
institution located and legally authorized in a State covered by the
agreement to provide postsecondary education through distance education
or correspondence courses to students located in other States covered
by the agreement and cannot prohibit any member State of the agreement
from enforcing its own general-purpose State laws and regulations
outside of the State authorization of distance education.
* * * * *
Teach-out: A process during which a program, institution, or
institutional location that provides 100 percent of at least one
program engages in an orderly closure or when, following the closure of
an institution or campus, another institution provides an opportunity
for the students of the closed school to complete their program,
regardless of their academic progress at the time of closure.
Teach-out agreement: A written agreement between institutions that
provides for the equitable treatment of students and a reasonable
opportunity for students to complete their program of study if an
institution, or an institutional location that provides 100 percent of
at least one program offered, ceases to operate or plans to cease
operations before all enrolled students have completed their program of
study.
Teach-out plan: A written plan developed by an institution that
provides for the equitable treatment of students if an institution, or
an institutional location that provides 100 percent of at least one
program, ceases to operate or plans to cease operations before all
enrolled students have completed their program of study.
* * * * *
0
3. Section 600.4 is amended by revising paragraph (c) to read as
follows:
Sec. 600.4 Institution of higher education.
* * * * *
(c) The Secretary does not recognize the accreditation or
preaccreditation of an institution unless the institution agrees to
submit any dispute involving an adverse action, such as the final
denial, withdrawal, or termination of accreditation, to arbitration
before initiating any other legal action.
* * * * *
0
4. Section 600.5 is amended by revising paragraphs (d) and (e) to read
as follows:
Sec. 600.5 Proprietary institution of higher education.
* * * * *
(d) The Secretary does not recognize the accreditation of an
institution unless the institution agrees to submit any dispute
involving an adverse action, such as the final denial, withdrawal, or
termination of accreditation, to arbitration before initiating any
other legal action.
(e) For purposes of this section, a ``program leading to a
baccalaureate degree in liberal arts'' is a program that is a general
instructional program falling within one or more of the following
generally accepted instructional categories comprising such programs,
but including only instruction in regular programs, and excluding
independently designed programs, individualized programs, and
unstructured studies:
(1) A program that is a structured combination of the arts,
biological and physical sciences, social sciences, and humanities,
emphasizing breadth of study.
(2) An undifferentiated program that includes instruction in the
general arts or general science.
(3) A program that focuses on combined studies and research in
humanities subjects as distinguished from the social and physical
sciences, emphasizing languages, literature, art, music, philosophy,
and religion.
(4) Any single instructional program in liberal arts and sciences,
general studies, and humanities not listed in paragraphs (e)(1) through
(3) of this section.
* * * * *
0
5. Section 600.6 is amended by revising paragraph (d) to read as
follows:
Sec. 600.6 Postsecondary vocational institution.
* * * * *
(d) The Secretary does not recognize the accreditation or
preaccreditation of an institution unless the institution agrees to
submit any dispute involving an adverse action, such as the final
denial, withdrawal, or termination of accreditation, to arbitration
before initiating any other legal action.
* * * * *
0
6. Section 600.9 is amended by:
0
a. Revising paragraphs (b) and (c); and
0
b. Revising paragraph (d)(1)(iii). The revisions read as follows:
Sec. 600.9 State authorization.
* * * * *
(b) An institution is considered to be legally authorized to
operate educational programs beyond secondary education if it is exempt
as a religious institution from State authorization under the State
constitution or by State law.
(c)(1)(i) If an institution that meets the requirements under
paragraph (a)(1) or (b) of this section offers postsecondary education
through distance education or correspondence courses to students
located in a State in which the institution is not physically located
or in which the institution is otherwise subject to that State's
jurisdiction as determined by that State, except as provided in
paragraph (c)(1)(ii) of this section, the institution must meet any of
that State's requirements for it to be legally offering postsecondary
distance education or correspondence courses in that State. The
institution must, upon request, document the State's approval to the
Secretary; or
(ii) If an institution that meets the requirements under paragraph
(a)(1) or (b) of this section offers postsecondary education through
distance education or correspondence courses in a State that
participates in a State authorization reciprocity agreement, and the
institution is covered by such agreement, the institution is considered
to meet State requirements for it to be legally offering postsecondary
distance education or correspondence courses in that State, subject to
any limitations in that agreement and to any additional requirements of
that State not relating to State authorization of distance education.
The institution must, upon request, document its coverage under such an
agreement to the Secretary.
(c)(2)(i) For purposes of this section, an institution must make a
determination, in accordance with the institution's policies or
procedures, regarding the State in which a student is located, which
must be applied consistently to all students.
(ii) The institution must, upon request, provide the Secretary with
written documentation of its determination of a student's location,
including the basis for such determination.
(iii) An institution must make a determination regarding the State
in which a student is located at the time of the student's initial
enrollment in an educational program and, if applicable, upon formal
receipt of information from the student, in accordance with the
institution's procedures, that the student's location has changed to
another State.
* * * * *
(d) * * *
(1) * * *
(iii) The additional location or branch campus must be approved by
the institution's recognized accrediting agency in accordance with
Sec. 602.22(a)(2)(ix) and (c).
* * * * *
[[Page 58916]]
0
7. Section 600.11 is amended by revising paragraphs (a) and (b)(2) to
read as follows:
Sec. 600.11 Special rules regarding institutional accreditation or
preaccreditation.
(a) Change of accrediting agencies. (1) For purposes of Sec. Sec.
600.4(a)(5)(i), 600.5(a)(6), and 600.6(a)(5)(i), the Secretary does not
recognize the accreditation or preaccreditation of an otherwise
eligible institution if that institution is in the process of changing
its accrediting agency, unless the institution provides the following
to the Secretary and receives approval:
(i) All materials related to its prior accreditation or
preaccreditation.
(ii) Materials demonstrating reasonable cause for changing its
accrediting agency. The Secretary will not determine such cause to be
reasonable if the institution--
(A) Has had its accreditation withdrawn, revoked, or otherwise
terminated for cause during the preceding 24 months, unless such
withdrawal, revocation, or termination has been rescinded by the same
accrediting agency; or
(B) Has been subject to a probation or equivalent, show cause
order, or suspension order during the preceding 24 months.
(2) Notwithstanding paragraph (a)(1)(ii) of this section, the
Secretary may determine the institution's cause for changing its
accrediting agency to be reasonable if the agency did not provide the
institution its due process rights as defined in Sec. 602.25, the
agency applied its standards and criteria inconsistently, or if the
adverse action or show cause or suspension order was the result of an
agency's failure to respect an institution's stated mission, including
religious mission.
(b) * * *
(2) Demonstrates to the Secretary reasonable cause for that
multiple accreditation or preaccreditation.
(i) The Secretary determines the institution's cause for multiple
accreditation to be reasonable unless the institution--
(A) Has had its accreditation withdrawn, revoked, or otherwise
terminated for cause during the preceding 24 months, unless such
withdrawal, revocation, or termination has been rescinded by the same
accrediting agency; or
(B) Has been subject to a probation or equivalent, show cause
order, or suspension order during the preceding 24 months.
(ii) Notwithstanding paragraphs (b)(2)(i)(A) and (B) of this
section, the Secretary may determine the institution's cause for
seeking multiple accreditation or preaccreditation to be reasonable if
the institution's primary interest in seeking multiple accreditation is
based on that agency's geographic area, program-area focus, or mission;
and
* * * * *
0
8. Add Sec. 600.12 to read as follows:
Sec. 600.12 Severability.
If any provision of this subpart or its application to any person,
act, or practice is held invalid, the remainder of the subpart or the
application of its provisions to any person, act, or practice shall not
be affected thereby.
0
9. Section 600.31 is amended by:
0
a. Revising paragraph (a)(1);
0
b. In paragraph (b), revising the definitions of ``Closely-held
corporation'', ``Ownership or ownership interest'', ``Parent'', and
``Person''; and
0
c. Revising paragraphs (c)(3) through (5).
The revisions read as follows:
Sec. 600.31 Change in ownership resulting in a change in control for
private nonprofit, private for-profit and public institutions.
(a)(1) Except as provided in paragraph (a)(2) of this section, a
private nonprofit, private for-profit, or public institution that
undergoes a change in ownership that results in a change in control
ceases to qualify as an eligible institution upon the change in
ownership and control. A change of ownership that results in a change
in control includes any change by which a person who has or thereby
acquires an ownership interest in the entity that owns the institution
or the parent of that entity, acquires or loses the ability to control
the institution.
* * * * *
(b) * * *
Closely-held corporation. Closely-held corporation (including the
term ``close corporation'') means--
(1) A corporation that qualifies under the law of the State of its
incorporation or organization as a closely-held corporation; or
(2) If the State of incorporation or organization has no definition
of closely-held corporation, a corporation the stock of which--
(i) Is held by no more than 30 persons; and
(ii) Has not been and is not planned to be publicly offered.
* * * * *
Ownership or ownership interest. (1) Ownership or ownership
interest means a legal or beneficial interest in an institution or its
corporate parent, or a right to share in the profits derived from the
operation of an institution or its corporate parent.
(2) Ownership or ownership interest does not include an ownership
interest held by--
(i) A mutual fund that is regularly and publicly traded;
(ii) A U.S. institutional investor, as defined in 17 CFR 240.15a-
6(b)(7);
(iii) A profit-sharing plan of the institution or its corporate
parent, provided that all full-time permanent employees of the
institution or its corporate parent are included in the plan; or
(iv) An employee stock ownership plan (ESOP).
Parent. The parent or parent entity is the entity that controls the
specified entity directly or indirectly through one or more
intermediaries.
Person. Person includes a legal entity or a natural person.
* * * * *
(c) * * *
(3) Other entities. The term ``other entities'' includes limited
liability companies, limited liability partnerships, limited
partnerships, and similar types of legal entities. A change in
ownership and control of an entity that is neither closely-held nor
required to be registered with the SEC occurs when--
(i) A person who has or acquires an ownership interest acquires
both control of at least 25 percent of the total of outstanding voting
stock of the corporation and control of the corporation; or
(ii) A person who holds both ownership or control of at least 25
percent of the total outstanding voting stock of the corporation and
control of the corporation, ceases to own or control that proportion of
the stock of the corporation, or to control the corporation.
(4) General partnership or sole proprietorship. A change in
ownership and control occurs when a person who has or acquires an
ownership interest acquires or loses control as described in this
section.
(5) Wholly owned subsidiary. An entity that is a wholly owned
subsidiary changes ownership and control when its parent entity changes
ownership and control as described in this section.
* * * * *
0
10. Section 600.32 is amended by revising paragraphs (c) introductory
text, (c)(1) and (2), (d)(1), (d)(2)(i) introductory text, and
(d)(2)(i)(A) and (B) to read as follows:
Sec. 600.32 Eligibility of additional locations.
* * * * *
[[Page 58917]]
(c) Notwithstanding paragraph (b) of this section, an additional
location is not required to satisfy the two-year requirement of Sec.
600.5(a)(7) or Sec. 600.6(a)(6) if the applicant institution and the
original institution are not related parties and there is no
commonality of ownership, control, or management between the
institutions, as described in 34 CFR 668.188(b) and 34 CFR 668.207(b)
and the applicant institution agrees--
(1) To be liable for all improperly expended or unspent title IV,
HEA program funds received during the current academic year and up to
one academic year prior by the institution that has closed or ceased to
provide educational programs;
(2) To be liable for all unpaid refunds owed to students who
received title IV, HEA program funds during the current academic year
and up to one academic year prior; and
* * * * *
(d)(1) An institution that conducts a teach-out at a site of a
closed institution or an institution engaged in a teach-out plan
approved by the institution's agency may apply to have that site
approved as an additional location if--
(i) The closed institution ceased operations, or the closing
institution is engaged in an orderly teach-out plan and the Secretary
has evaluated and approved that plan; and
(ii) The teach-out plan required under 34 CFR 668.14(b)(31) is
approved by the closed or closing institution's accrediting agency.
(2)(i) An institution that conducts a teach-out and is approved to
add an additional location described in paragraph (d)(1) of this
section--
(A) Does not have to meet the requirement of Sec. 600.5(a)(7) or
Sec. 600.6(a)(6) for the additional location described in paragraph
(d)(1) of this section;
(B) Is not responsible for any liabilities of the closed or closing
institution as provided under paragraph (c)(1) and (c)(2) of this
section if the institutions are not related parties and there is no
commonality of ownership or management between the institutions, as
described in 34 CFR 668.188(b) and 34 CFR 668.207(b); and
* * * * *
0
11. Add Sec. 600.33 to read as follows:
Sec. 600.33 Severability.
If any provision of this subpart or its application to any person,
act, or practice is held invalid, the remainder of the subpart or the
application of its provisions to any person, act, or practice shall not
be affected thereby.
0
12. Section 600.41 is amended by:
0
a. Removing paragraph (a)(1)(ii)(B) and redesignating paragraphs
(a)(1)(ii)(C) through (G) as paragraphs (a)(1)(ii)(B) through (F); and
0
b. Revising paragraph (d) introductory text.
The revision reads as follows:
Sec. 600.41 Termination and emergency action proceedings.
* * * * *
(d) After a termination under this section of the eligibility of an
institution as a whole or as to a location or educational program
becomes final, the institution may not originate applications for, make
awards of or commitments for, deliver, or disburse funds under the
applicable title IV, HEA program, except--
* * * * *
0
13. Add Sec. 600.42 to read as follows:
Sec. 600.42 Severability.
If any provision of this subpart or its application to any person,
act, or practice is held invalid, the remainder of the subpart or the
application of its provisions to any person, act, or practice shall not
be affected thereby.
PART 602--THE SECRETARY'S RECOGNITION OF ACCREDITING AGENCIES
0
14. The authority citation for part 602 continues to read as follows:
Authority: 20 U.S.C. 1099b, unless otherwise noted.
0
15. Section 602.3 is amended by:
0
a. Redesignating the introductory text as paragraph (b);
0
b. Adding paragraph (a); and
0
c. In newly redesignated paragraph (b):
0
i. Removing the definition of ``Branch campus'';
0
ii. Revising the definition of ``Compliance report'';
0
iii. Removing the definition of ``Correspondence education'' and
``Direct assessment program'';
0
iv. Revising the definition of ``Final accrediting action'';
0
v. Removing the definition of ``Institution of higher education or
institution'';
0
vi. Adding in alphabetical order a definition for ``Monitoring
report'';
0
vii. Removing the definitions of ``Nationally recognized accrediting
agency, nationally recognized agency, or recognized agency'' and
``Preaccreditation'';
0
viii. Revising the definitions of ``Programmatic accrediting agency''
and ``Scope of recognition or scope'';
0
ix. Removing the definition of ``Secretary'';
0
x. Revising the definition of ``Senior Department official'';
0
ix. Removing the definition of ``State'';
0
x. Adding in alphabetical order a definition for ``Substantial
compliance''; and
0
xi. Removing the definitions of ``Teach-out agreement'' and ``Teach-out
plan''.
The additions and revisions read as follows:
Sec. 602.3 What definitions apply to this part?
(a) The following definitions are contained in the regulations for
Institutional Eligibility under the Higher Education Act of 1965, as
amended, 34 CFR part 600:
(1) Accredited
(2) Additional location
(3) Branch campus
(4) Correspondence course
(5) Direct assessment program
(6) Institution of higher education
(7) Nationally recognized accrediting agency
(8) Preaccreditation
(9) Religious mission
(10) Secretary
(11) State
(12) Teach-out
(13) Teach-out agreement
(14) Teach-out plan
(b) * * *
* * * * *
Compliance report means a written report that the Department
requires an agency to file when the agency is found to be out of
compliance to demonstrate that the agency has corrected deficiencies
specified in the decision letter from the senior Department official or
the Secretary. Compliance reports must be reviewed by Department staff
and the Advisory Committee and approved by the senior Department
official or, in the event of an appeal, by the Secretary.
* * * * *
Final accrediting action means a final determination by an
accrediting agency regarding the accreditation or preaccreditation
status of an institution or program. A final accrediting action is a
decision made by the agency, at the conclusion of any appeals process
available to the institution or program under the agency's due process
policies and procedures.
* * * * *
Monitoring report means a report that an agency is required to
submit to Department staff when it is found to be substantially
compliant. The report contains documentation to demonstrate that--
(i) The agency is implementing its current or corrected policies;
or
[[Page 58918]]
(ii) The agency, which is compliant in practice, has updated its
policies to align with those compliant practices.
* * * * *
Programmatic accrediting agency means an agency that accredits
specific educational programs, including those that prepare students in
specific academic disciplines or for entry into a profession,
occupation, or vocation.
* * * * *
Scope of recognition or scope means the range of accrediting
activities for which the Secretary recognizes an agency. The Secretary
may place a limitation on the scope of an agency's recognition for
title IV, HEA purposes. The Secretary's designation of scope defines
the recognition granted according to--
(i) Types of degrees and certificates covered;
(ii) Types of institutions and programs covered;
(iii) Types of preaccreditation status covered, if any; and
(iv) Coverage of accrediting activities related to distance
education or correspondence courses.
Senior Department official means the official in the U.S.
Department of Education designated by the Secretary who has, in the
judgment of the Secretary, appropriate seniority and relevant subject
matter knowledge to make independent decisions on accrediting agency
recognition.
Substantial compliance means the agency demonstrated to the
Department that it has the necessary policies, practices, and standards
in place and generally adheres with fidelity to those policies,
practices, and standards; or the agency has policies, practices, and
standards in place that need minor modifications to reflect its
generally compliant practice.
* * * * *
0
16. Add Sec. 602.4 to read as follows:
Sec. 602.4 Severability.
If any provision of this subpart or its application to any person,
act, or practice is held invalid, the remainder of the subpart or the
application of its provisions to any person, act, or practice shall not
be affected thereby.
0
17. Section 602.10 is amended by revising paragraph (a) to read as
follows:
Sec. 602.10 Link to Federal programs.
* * * * *
(a) If the agency accredits institutions of higher education, its
accreditation is a required element in enabling at least one of those
institutions to establish eligibility to participate in HEA programs.
If, pursuant to 34 CFR 600.11(b), an agency accredits one or more
institutions that participate in HEA programs and that could designate
the agency as its link to HEA programs, the agency satisfies this
requirement, even if the institution currently designates another
institutional accrediting agency as its Federal link; or
* * * * *
0
18. Section 602.11 is revised to read as follows:
Sec. 602.11 Geographic area of accrediting activities.
The agency must demonstrate that it conducts accrediting activities
within--
(a) A State, if the agency is part of a State government;
(b) A region or group of States chosen by the agency in which an
agency provides accreditation to a main campus, a branch campus, or an
additional location of an institution. An agency whose geographic area
includes a State in which a branch campus or additional location is
located is not required to also accredit a main campus in that State.
An agency whose geographic area includes a State in which only a branch
campus or additional location is located is not required to accept an
application for accreditation from other institutions in such State; or
(c) The United States.
(Authority: 20 U.S.C. 1099b)
0
19. Section 602.12 is revised to read as follows:
Sec. 602.12 Accrediting experience.
(a) An agency seeking initial recognition must demonstrate that it
has--
(1) Granted accreditation or preaccreditation prior to submitting
an application for recognition--
(i) To one or more institutions if it is requesting recognition as
an institutional accrediting agency and to one or more programs if it
is requesting recognition as a programmatic accrediting agency;
(ii) That covers the range of the specific degrees, certificates,
institutions, and programs for which it seeks recognition; and
(iii) In the geographic area for which it seeks recognition; and
(2) Conducted accrediting activities, including deciding whether to
grant or deny accreditation or preaccreditation, for at least two years
prior to seeking recognition, unless the agency seeking initial
recognition is affiliated with, or is a division of, an already
recognized agency.
(b)(1) A recognized agency seeking an expansion of its scope of
recognition must follow the requirements of Sec. Sec. 602.31 and
602.32 and demonstrate that it has accreditation or preaccreditation
policies in place that meet all the criteria for recognition covering
the range of the specific degrees, certificates, institutions, and
programs for which it seeks the expansion of scope and has engaged and
can show support from relevant constituencies for the expansion. A
change to an agency's geographic area of accrediting activities does
not constitute an expansion of the agency's scope of recognition, but
the agency must notify the Department of, and publicly disclose on the
agency's website, any such change.
(2) An agency that cannot demonstrate experience in making
accreditation or preaccreditation decisions under the expanded scope at
the time of its application or review for an expansion of scope may--
(i) If it is an institutional accrediting agency, be limited in the
number of institutions to which it may grant accreditation under the
expanded scope for a designated period of time; or
(ii) If it is a programmatic accrediting agency, be limited in the
number of programs to which it may grant accreditation under that
expanded scope for a certain period of time; and
(iii) Be required to submit a monitoring report regarding
accreditation decisions made under the expanded scope.
(Authority: 20 U.S.C. 1099b)
Sec. 602.13 [Removed and Reserved]
0
20. Section 602.13 is removed and reserved.
0
21. Section 602.14 is revised to read as follows:
Sec. 602.14 Purpose and organization.
(a) The Secretary recognizes only the following four categories of
accrediting agencies:
(1) A State agency that--
(i) Has as a principal purpose the accrediting of institutions of
higher education, higher education programs, or both; and
(ii) Has been listed by the Secretary as a nationally recognized
accrediting agency on or before October 1, 1991.
(2) An accrediting agency that--
(i) Has a voluntary membership of institutions of higher education;
(ii) Has as a principal purpose the accrediting of institutions of
higher education and that accreditation is used to provide a link to
Federal HEA programs in accordance with Sec. 602.10; and
[[Page 58919]]
(iii) Satisfies the ``separate and independent'' requirements in
paragraph (b) of this section.
(3) An accrediting agency that--
(i) Has a voluntary membership; and
(ii) Has as its principal purpose the accrediting of institutions
of higher education or programs, and the accreditation it offers is
used to provide a link to non-HEA Federal programs in accordance with
Sec. 602.10.
(4) An accrediting agency that, for purposes of determining
eligibility for title IV, HEA programs--
(i)(A) Has a voluntary membership of individuals participating in a
profession; or
(B) Has as its principal purpose the accrediting of programs within
institutions that are accredited by another nationally recognized
accrediting agency; and
(ii) Satisfies the ``separate and independent'' requirements in
paragraph (b) of this section or obtains a waiver of those requirements
under paragraph (d) of this section.
(b) For purposes of this section, ``separate and independent''
means that--
(1) The members of the agency's decision-making body, who decide
the accreditation or preaccreditation status of institutions or
programs, establish the agency's accreditation policies, or both, are
not elected or selected by the board or chief executive officer of any
related, associated, or affiliated trade association, professional
organization, or membership organization and are not staff of the
related, associated, or affiliated trade association, professional
organization, or membership organization;
(2) At least one member of the agency's decision-making body is a
representative of the public, and at least one-seventh of the body
consists of representatives of the public;
(3) The agency has established and implemented guidelines for each
member of the decision-making body including guidelines on avoiding
conflicts of interest in making decisions;
(4) The agency's dues are paid separately from any dues paid to any
related, associated, or affiliated trade association or membership
organization; and
(5) The agency develops and determines its own budget, with no
review by or consultation with any other entity or organization.
(c) The Secretary considers that any joint use of personnel,
services, equipment, or facilities by an agency and a related,
associated, or affiliated trade association or membership organization
does not violate the ``separate and independent'' requirements in
paragraph (b) of this section if--
(1) The agency pays the fair market value for its proportionate
share of the joint use; and
(2) The joint use does not compromise the independence and
confidentiality of the accreditation process.
(d) For purposes of paragraph (a)(4) of this section, the Secretary
may waive the ``separate and independent'' requirements in paragraph
(b) of this section if the agency demonstrates that--
(1) The Secretary listed the agency as a nationally recognized
agency on or before October 1, 1991, and has recognized it continuously
since that date;
(2) The related, associated, or affiliated trade association or
membership organization plays no role in making or ratifying either the
accrediting or policy decisions of the agency;
(3) The agency has sufficient budgetary and administrative autonomy
to carry out its accrediting functions independently;
(4) The agency provides to the related, associated, or affiliated
trade association or membership organization only information it makes
available to the public.
(e) An agency seeking a waiver of the ``separate and independent''
requirements under paragraph (d) of this section must apply for the
waiver each time the agency seeks recognition or continued recognition.
(Authority: 20 U.S.C. 1099b)
0
22. Section 602.15 is revised to read as follows:
Sec. 602.15 Administrative and fiscal responsibilities.
The agency must have the administrative and fiscal capability to
carry out its accreditation activities in light of its requested scope
of recognition. The agency meets this requirement if the agency
demonstrates that--
(a) The agency has--
(1) Adequate administrative staff and financial resources to carry
out its accrediting responsibilities;
(2) Competent and knowledgeable individuals, qualified by education
or experience in their own right and trained by the agency on their
responsibilities, as appropriate for their roles, regarding the
agency's standards, policies, and procedures, to conduct its on-site
evaluations, apply or establish its policies, and make its accrediting
and preaccrediting decisions, including, if applicable to the agency's
scope, their responsibilities regarding distance education and
correspondence courses;
(3) Academic and administrative personnel on its evaluation,
policy, and decision-making bodies, if the agency accredits
institutions;
(4) Educators, practitioners, and/or employers on its evaluation,
policy, and decision-making bodies, if the agency accredits programs or
single-purpose institutions that prepare students for a specific
profession;
(5) Representatives of the public, which may include students, on
all decision-making bodies; and
(6) Clear and effective controls, including guidelines, to prevent
or resolve conflicts of interest, or the appearance of conflicts of
interest, by the agency's--
(i) Board members;
(ii) Commissioners;
(iii) Evaluation team members;
(iv) Consultants;
(v) Administrative staff; and
(vi) Other agency representatives; and
(b) The agency maintains complete and accurate records of--
(1) Its last full accreditation or preaccreditation review of each
institution or program, including on-site evaluation team reports, the
institution's or program's responses to on-site reports, periodic
review reports, any reports of special reviews conducted by the agency
between regular reviews, and a copy of the institution's or program's
most recent self-study; and
(2) All decision letters issued by the agency regarding the
accreditation and preaccreditation of any institution or program and
any substantive changes.
(Authority: 20 U.S.C. 1099b)
0
23. Section 602.16 is revised to read as follows:
Sec. 602.16 Accreditation and preaccreditation standards.
(a) The agency must demonstrate that it has standards for
accreditation, and preaccreditation, if offered, that are sufficiently
rigorous to ensure that the agency is a reliable authority regarding
the quality of the education or training provided by the institutions
or programs it accredits. The agency meets this requirement if the
following conditions are met:
(1) The agency's accreditation standards must set forth clear
expectations for the institutions or programs it accredits in the
following areas:
(i) Success with respect to student achievement in relation to the
institution's mission, which may include different standards for
different
[[Page 58920]]
institutions or programs, as established by the institution, including,
as appropriate, consideration of State licensing examinations, course
completion, and job placement rates.
(ii) Curricula.
(iii) Faculty.
(iv) Facilities, equipment, and supplies.
(v) Fiscal and administrative capacity as appropriate to the
specified scale of operations.
(vi) Student support services.
(vii) Recruiting and admissions practices, academic calendars,
catalogs, publications, grading, and advertising.
(viii) Measures of program length and the objectives of the degrees
or credentials offered.
(ix) Record of student complaints received by, or available to, the
agency.
(x) Record of compliance with the institution's program
responsibilities under title IV of the Act, based on the most recent
student loan default rate data provided by the Secretary, the results
of financial or compliance audits, program reviews, and any other
information that the Secretary may provide to the agency; and
(2) The agency's preaccreditation standards, if offered, must--
(i) Be appropriately related to the agency's accreditation
standards; and
(ii) Not permit the institution or program to hold preaccreditation
status for more than five years before a final accrediting action is
made.
(b) Agencies are not required to apply the standards described in
paragraph (a)(1)(x) of this section to institutions that do not
participate in title IV, HEA programs. Under such circumstance, the
agency's grant of accreditation or preaccreditation must specify that
the grant, by request of the institution, does not include
participation by the institution in title IV, HEA programs.
(c) If the agency only accredits programs and does not serve as an
institutional accrediting agency for any of those programs, its
accreditation standards must address the areas in paragraph (a)(1) of
this section in terms of the type and level of the program rather than
in terms of the institution.
(d)(1) If the agency has or seeks to include within its scope of
recognition the evaluation of the quality of institutions or programs
offering distance education, correspondence courses, or direct
assessment education, the agency's standards must effectively address
the quality of an institution's distance education, correspondence
courses, or direct assessment education in the areas identified in
paragraph (a)(1) of this section.
(2) The agency is not required to have separate standards,
procedures, or policies for the evaluation of distance education or
correspondence courses.
(e) If none of the institutions an agency accredits participates in
any title IV, HEA program, or if the agency only accredits programs
within institutions that are accredited by a nationally recognized
institutional accrediting agency, the agency is not required to have
the accreditation standards described in paragraphs (a)(1)(viii) and
(a)(1)(x) of this section.
(f) An agency that has established and applies the standards in
paragraph (a) of this section may establish any additional
accreditation standards it deems appropriate.
(g) Nothing in paragraph (a) of this section restricts--
(1) An accrediting agency from setting, with the involvement of its
members, and applying accreditation standards for or to institutions or
programs that seek review by the agency;
(2) An institution from developing and using institutional
standards to show its success with respect to student achievement,
which achievement may be considered as part of any accreditation
review; or
(3) Agencies from having separate standards regarding an
institution's or a program's process for approving curriculum to enable
programs to more effectively meet the recommendations of--
(i) Industry advisory boards that include employers who hire
program graduates;
(ii) Widely recognized industry standards and organizations;
(iii) Credentialing or other occupational registration or
licensure; or
(iv) Employers in a given field or occupation, in making hiring
decisions.
(4) Agencies from having separate faculty standards for instructors
teaching courses within a dual or concurrent enrollment program, as
defined in 20 U.S.C. 7801, or career and technical education courses,
as long as the instructors, in the agency's judgment, are qualified by
education or work experience for that role.
(Authority: 20 U.S.C. 1099b)
0
24. Section 602.17 is revised to read as follows:
Sec. 602.17 Application of standards in reaching accreditation
decisions.
The agency must have effective mechanisms for evaluating an
institution's or program's compliance with the agency's standards
before reaching a decision to accredit or preaccredit the institution
or program. The agency meets this requirement if the agency
demonstrates that it--
(a) Evaluates whether an institution or program--
(1) Maintains clearly specified educational objectives that are
consistent with its mission and appropriate in light of the degrees or
certificates awarded;
(2) Is successful in achieving its stated objectives at both the
institutional and program levels; and
(3) Maintains requirements that at least conform to commonly
accepted academic standards, or the equivalent, including pilot
programs in Sec. 602.18(b);
(b) Requires the institution or program to engage in a self-study
process that assesses the institution's or program's education quality
and success in meeting its mission and objectives, highlights
opportunities for improvement, and includes a plan for making those
improvements;
(c) Conducts at least one on-site review of the institution or
program during which it obtains sufficient information to determine if
the institution or program complies with the agency's standards;
(d) Allows the institution or program the opportunity to respond in
writing to the report of the on-site review;
(e) Conducts its own analysis of the self-study and supporting
documentation furnished by the institution or program, the report of
the on-site review, the institution's or program's response to the
report, and any other information substantiated by the agency from
other sources to determine whether the institution or program complies
with the agency's standards;
(f) Provides the institution or program with a detailed written
report that assesses the institution's or program's compliance with the
agency's standards, including areas needing improvement, and the
institution's or program's performance with respect to student
achievement;
(g) Requires institutions to have processes in place through which
the institution establishes that a student who registers in any course
offered via distance education or correspondence is the same student
who academically engages in the course or program; and
(h) Makes clear in writing that institutions must use processes
that protect student privacy and notify students of any projected
additional student charges associated with the verification of student
identity at the time of registration or enrollment.
(Authority: 20 U.S.C. 1099b)
0
25. Section 602.18 is revised to read as follows:
[[Page 58921]]
Sec. 602.18 Ensuring consistency in decision-making.
(a) The agency must consistently apply and enforce standards that
respect the stated mission of the institution, including religious
mission, and that ensure that the education or training offered by an
institution or program, including any offered through distance
education, correspondence courses, or direct assessment education is of
sufficient quality to achieve its stated objective for the duration of
any accreditation or preaccreditation period.
(b) The agency meets the requirement in paragraph (a) of this
section if the agency--
(1) Has written specification of the requirements for accreditation
and preaccreditation that include clear standards for an institution or
program to be accredited or preaccredited;
(2) Has effective controls against the inconsistent application of
the agency's standards;
(3) Bases decisions regarding accreditation and preaccreditation on
the agency's published standards and does not use as a negative factor
the institution's religious mission-based policies, decisions, and
practices in the areas covered by Sec. 602.16(a)(1)(ii), (iii), (iv),
(vi), and (vii) provided, however, that the agency may require that the
institution's or program's curricula include all core components
required by the agency;
(4) Has a reasonable basis for determining that the information the
agency relies on for making accrediting decisions is accurate;
(5) Provides the institution or program with a detailed written
report that clearly identifies any deficiencies in the institution's or
program's compliance with the agency's standards; and
(6) Publishes any policies for retroactive application of an
accreditation decision, which must not provide for an effective date
that predates either--
(i) An earlier denial by the agency of accreditation or
preaccreditation to the institution or program; or
(ii) The agency's formal approval of the institution or program for
consideration in the agency's accreditation or preaccreditation
process.
(c) Nothing in this part prohibits an agency, when special
circumstances exist, to include innovative program delivery approaches
or, when an undue hardship on students occurs, from applying equivalent
written standards, policies, and procedures that provide alternative
means of satisfying one or more of the requirements set forth in 34 CFR
602.16, 602.17, 602.19, 602.20, 602.22, and 602.24, as compared with
written standards, policies, and procedures the agency ordinarily
applies, if--
(1) The alternative standards, policies, and procedures, and the
selection of institutions or programs to which they will be applied,
are approved by the agency's decision-making body and otherwise meet
the intent of the agency's expectations and requirements;
(2) The agency sets and applies equivalent goals and metrics for
assessing the performance of institutions or programs;
(3) The agency's process for establishing and applying the
alternative standards, policies, and procedures is set forth in its
published accreditation manuals; and
(4) The agency requires institutions or programs seeking the
application of alternative standards to demonstrate the need for an
alternative assessment approach, that students will receive equivalent
benefit, and that students will not be harmed through such application.
(d) Nothing in this part prohibits an agency from permitting the
institution or program to be out of compliance with one or more of its
standards, policies, and procedures adopted in satisfaction of
Sec. Sec. 602.16, 602.17, 602.19, 602.20, 602.22, and 602.24 for a
period of time, as determined by the agency annually, not to exceed
three years unless the agency determines there is good cause to extend
the period of time, and if--
(1) The agency and the institution or program can show that the
circumstances requiring the period of noncompliance are beyond the
institution's or program's control, such as--
(i) A natural disaster or other catastrophic event significantly
impacting an institution's or program's operations;
(ii) Accepting students from another institution that is
implementing a teach-out or closing;
(iii) Significant and documented local or national economic
changes, such as an economic recession or closure of a large local
employer;
(iv) Changes relating to State licensure requirements;
(v) The normal application of the agency's standards creates an
undue hardship on students; or
(vi) Instructors who do not meet the agency's typical faculty
standards, but who are otherwise qualified by education or work
experience, to teach courses within a dual or concurrent enrollment
program, as defined in 20 U.S.C. 7801, or career and technical
education courses;
(2) The grant of the period of noncompliance is approved by the
agency's decision-making body;
(3) The agency projects that the institution or program has the
resources necessary to achieve compliance with the standard, policy, or
procedure postponed within the time allotted; and
(4) The institution or program demonstrates to the satisfaction of
the agency that the period of noncompliance will not--
(i) Contribute to the cost of the program to the student without
the student's consent;
(ii) Create any undue hardship on, or harm to, students; or
(iii) Compromise the program's academic quality.
(Authority: 20 U.S.C. 1099b)
0
26. Section 602.19 is revised to read as follows:
Sec. 602.19 Monitoring and reevaluation of accredited institutions
and programs.
(a) The agency must reevaluate, at regularly established intervals,
the institutions or programs it has accredited or preaccredited.
(b) The agency must demonstrate it has, and effectively applies,
monitoring and evaluation approaches that enable the agency to identify
problems with an institution's or program's continued compliance with
agency standards and that take into account institutional or program
strengths and stability. These approaches must include periodic
reports, and collection and analysis of key data and indicators,
identified by the agency, including, but not limited to, fiscal
information and measures of student achievement, consistent with the
provisions of Sec. 602.16(g). This provision does not require
institutions or programs to provide annual reports on each specific
accreditation criterion.
(c) Each agency must monitor overall growth of the institutions or
programs it accredits and, at least annually, collect head-count
enrollment data from those institutions or programs.
(d) Institutional accrediting agencies must monitor the growth of
programs at institutions experiencing significant enrollment growth, as
reasonably defined by the agency.
(e) Any agency that has notified the Secretary of a change in its
scope in accordance with Sec. 602.27(a) must monitor the headcount
enrollment of each institution it has accredited that offers distance
education or correspondence courses. The Secretary will require a
review, at the next meeting of the National Advisory Committee on
Institutional Quality and Integrity, of any change in scope
[[Page 58922]]
undertaken by an agency if the enrollment of an institution that offers
distance education or correspondence courses that is accredited by such
agency increases by 50 percent or more within any one institutional
fiscal year. If any such institution has experienced an increase in
head-count enrollment of 50 percent or more within one institutional
fiscal year, the agency must report that information to the Secretary
within 30 days of acquiring such data.
(Authority: 20 U.S.C. 1099b)
0
27. Section 602.20 is revised to read as follows:
Sec. 602.20 Enforcement of standards.
(a) If the agency's review of an institution or program under any
standard indicates that the institution or program is not in compliance
with that standard, the agency must--
(1) Follow its written policy for notifying the institution or
program of the finding of noncompliance;
(2) Provide the institution or program with a written timeline for
coming into compliance that is reasonable, as determined by the
agency's decision-making body, based on the nature of the finding, the
stated mission, and educational objectives of the institution or
program. The timeline may include intermediate checkpoints on the way
to full compliance and must not exceed the lesser of four years or 150
percent of the--
(i) Length of the program in the case of a programmatic accrediting
agency; or
(ii) Length of the longest program at the institution in the case
of an institutional accrediting agency;
(3) Follow its written policies and procedures for granting a good
cause extension that may exceed the standard timeframe described in
paragraph (a)(2) of this section when such an extension is determined
by the agency to be warranted; and
(4) Have a written policy to evaluate and approve or disapprove
monitoring or compliance reports it requires, provide ongoing
monitoring, if warranted, and evaluate an institution's or program's
progress in resolving the finding of noncompliance.
(b) Notwithstanding paragraph (a) of this section, the agency must
have a policy for taking an immediate adverse action, and take such
action, when the agency has determined that such action is warranted.
(c) If the institution or program does not bring itself into
compliance within the period specified in paragraph (a) of this
section, the agency must take adverse action against the institution or
program, but may maintain the institution's or program's accreditation
or preaccreditation until the institution or program has had reasonable
time to complete the activities in its teach-out plan or to fulfill the
obligations of any teach-out agreement to assist students in
transferring or completing their programs.
(d) An agency that accredits institutions may limit the adverse or
other action to particular programs that are offered by the institution
or to particular additional locations of an institution, without
necessarily taking action against the entire institution and all of its
programs, provided the noncompliance was limited to that particular
program or location.
(e) All adverse actions taken under this subpart are subject to the
arbitration requirements in 20 U.S.C. 1099b(e).
(f) An agency is not responsible for enforcing requirements in 34
CFR 668.14, 668.15, 668.16, 668.41, or 668.46, but if, in the course of
an agency's work, it identifies instances or potential instances of
noncompliance with any of these requirements, it must notify the
Department.
(g) The Secretary may not require an agency to take action against
an institution or program that does not participate in any title IV,
HEA or other Federal program as a result of a requirement specified in
this part.
(Authority: 20 U.S.C. 1099b)
0
28. Section 602.21 is amended by revising paragraphs (a) and (c) and
adding paragraph (d) to read as follows:
Sec. 602.21 Review of standards.
(a) The agency must maintain a comprehensive systematic program of
review that involves all relevant constituencies and that demonstrates
that its standards are adequate to evaluate the quality of the
education or training provided by the institutions and programs it
accredits and relevant to the educational or training needs of
students.
* * * * *
(c) If the agency determines, at any point during its systematic
program of review, that it needs to make changes to its standards, the
agency must initiate action within 12 months to make the changes and
must complete that action within a reasonable period of time.
(d) Before finalizing any changes to its standards, the agency
must--
(1) Provide notice to all of the agency's relevant constituencies,
and other parties who have made their interest known to the agency, of
the changes the agency proposes to make;
(2) Give the constituencies and other interested parties adequate
opportunity to comment on the proposed changes; and
(3) Take into account and be responsive to any comments on the
proposed changes submitted timely by the relevant constituencies and
other interested parties.
* * * * *
0
29. Section 602.22 is revised to read as follows:
Sec. 602.22 Substantive changes and other reporting requirements.
(a)(1) If the agency accredits institutions, it must maintain
adequate substantive change policies that ensure that any substantive
change, as defined in this section, after the agency has accredited or
preaccredited the institution does not adversely affect the capacity of
the institution to continue to meet the agency's standards. The agency
meets this requirement if--
(i) The agency requires the institution to obtain the agency's
approval of the substantive change before the agency includes the
change in the scope of accreditation or preaccreditation it previously
granted to the institution; and
(ii) The agency's definition of substantive change covers high-
impact, high-risk changes, including at least the following:
(A) Any substantial change in the established mission or objectives
of the institution or its programs.
(B) Any change in the legal status, form of control, or ownership
of the institution.
(C) The addition of programs that represent a significant departure
from the existing offerings or educational programs, or method of
delivery, from those that were offered or used when the agency last
evaluated the institution.
(D) The addition of graduate programs by an institution that
previously offered only undergraduate programs or certificates.
(E) A change in the way an institution measures student progress,
including whether the institution measures progress in clock hours or
credit-hours, semesters, trimesters, or quarters, or uses time-based or
non-time-based methods.
(F) A substantial increase in the number of clock hours or credit
hours awarded, or an increase in the level of credential awarded, for
successful completion of one or more programs.
(G) The acquisition of any other institution or any program or
location of another institution.
(H) The addition of a permanent location at a site at which the
institution is conducting a teach-out for students of another
institution that has ceased
[[Page 58923]]
operating before all students have completed their program of study.
(I) The addition of a new location or branch campus, except as
provided in paragraph (c) of this section. The agency's review must
include assessment of the institution's fiscal and administrative
capability to operate the location or branch campus, the regular
evaluation of locations, and verification of the following:
(1) Academic control is clearly identified by the institution.
(2) The institution has adequate faculty, facilities, resources,
and academic and student support systems in place.
(3) The institution is financially stable.
(4) The institution had engaged in long-range planning for
expansion.
(J) Entering into a written arrangement under 34 CFR 668.5 under
which an institution or organization not certified to participate in
the title IV, HEA programs offers more than 25 and up to 50 percent of
one or more of the accredited institution's educational programs.
(K) Addition of each direct assessment program.
(2)(i) For substantive changes under only paragraph (a)(1)(ii)(C),
(E), (F), (H), or (J) of this section, the agency's decision-making
body may designate agency senior staff to approve or disapprove the
request in a timely, fair, and equitable manner; and
(ii) In the case of a request under paragraph (a)(1)(ii)(J) of this
section, the agency must make a final decision within 90 days of
receipt of a materially complete request, unless the agency or its
staff determine significant circumstances related to the substantive
change require a review by the agency's decision-making body to occur
within 180 days.
(b) Institutions that have been placed on probation or equivalent
status, have been subject to negative action by the agency over the
prior three academic years, or are under a provisional certification,
as provided in 34 CFR 668.13, must receive prior approval for the
following additional changes (all other institutions must report these
changes within 30 days to their accrediting agency):
(1) A change in an existing program's method of delivery.
(2) An aggregate change of 25 percent or more of the clock hours,
credit hours, or content of a program since the agency's most recent
accreditation review.
(3) The development of customized pathways or abbreviated or
modified courses or programs to--
(i) Accommodate and recognize a student's existing knowledge, such
as knowledge attained through employment or military service; and
(ii) Close competency gaps between demonstrated prior knowledge or
competency and the full requirements of a particular course or program.
(4) Entering into a written arrangement under 34 CFR 668.5 under
which an institution or organization not certified to participate in
the title IV, HEA programs offers up to 25 percent of one or more of
the accredited institution's educational programs.
(c) Institutions that have successfully completed at least one
cycle of accreditation and have received agency approval for the
addition of at least two additional locations as provided in paragraph
(a)(1)(ii)(I) of this section, and that have not been placed on
probation or equivalent status or been subject to a negative action by
the agency over the prior three academic years, and that are not under
a provisional certification, as provided in 34 CFR 668.13, need not
apply for agency approval of subsequent additions of locations, and
must report these changes to the accrediting agency within 30 days, if
the institution has met criteria established by the agency indicating
sufficient capacity to add additional locations without individual
prior approvals, including, at a minimum, satisfactory evidence of a
system to ensure quality across a distributed enterprise that
includes--
(1) Clearly identified academic control;
(2) Regular evaluation of the locations;
(3) Adequate faculty, facilities, resources, and academic and
student support systems;
(4) Financial stability; and
(5) Long-range planning for expansion.
(d) The agency must have an effective mechanism for conducting, at
reasonable intervals, visits to a representative sample of additional
locations approved under paragraphs (a)(1)(ii)(H) and (I) of this
section.
(e) The agency may determine the procedures it uses to grant prior
approval of the substantive change. However, these procedures must
specify an effective date, on which the change is included in the
program's or institution's grant of accreditation or preaccreditation.
The date of prior approval must not pre-date either an earlier agency
denial of the substantive change, or the agency's formal acceptance of
the application for the substantive change for inclusion in the
program's or institution's grant of accreditation or preaccreditation.
An agency may designate the date of a change in ownership as the
effective date of its approval of that substantive change if the
accreditation decision is made within 30 days of the change in
ownership. Except as provided in paragraphs (d) and (f) of this
section, an agency may require a visit before granting such an
approval.
(f) Except as provided in paragraph (c) of this section, if the
agency's accreditation of an institution enables the institution to
seek eligibility to participate in title IV, HEA programs, the agency's
procedures for the approval of an additional location that is not a
branch campus where at least 50 percent of an educational program is
offered must include--
(1) A visit, within six months, to each additional location the
institution establishes, if the institution--
(i) Has a total of three or fewer additional locations;
(ii) Has not demonstrated, to the agency's satisfaction, that the
additional location is meeting all of the agency's standards that apply
to that additional location; or
(iii) Has been placed on warning, probation, or show cause by the
agency or is subject to some limitation by the agency on its
accreditation or preaccreditation status;
(2) A mechanism for conducting, at reasonable intervals, visits to
a representative sample of additional locations of institutions that
operate more than three additional locations; and
(3) A mechanism, which may, at the agency's discretion, include
visits to additional locations, for ensuring that accredited and
preaccredited institutions that experience rapid growth in the number
of additional locations maintain education quality.
(g) The purpose of the visits described in paragraph (f) of this
section is to verify that the additional location has the personnel,
facilities, and resources the institution claimed it had in its
application to the agency for approval of the additional location.
(h) The agency's substantive change policy must define when the
changes made or proposed by an institution are or would be sufficiently
extensive to require the agency to conduct a new comprehensive
evaluation of that institution.
(Authority: 20 U.S.C. 1099b)
0
30. Section 602.23 is amended by:
0
a. Revising paragraphs (a)(2), (a)(5) introductory text, and (d);
0
b. Redesignating paragraph (f) as paragraph (g); and
0
c. Adding a new paragraph (f).
[[Page 58924]]
The revisions and addition read as follows:
Sec. 602.23 Operating procedures all agencies must have.
(a) * * *
(2) The procedures that institutions or programs must follow in
applying for accreditation, preaccreditation, or substantive changes
and the sequencing of those steps relative to any applications or
decisions required by States or the Department relative to the agency's
preaccreditation, accreditation, or substantive change decisions;
* * * * *
(5) A list of the names, academic and professional qualifications,
and relevant employment and organizational affiliations of--
* * * * *
(d) If an institution or program elects to make a public disclosure
of its accreditation or preaccreditation status, the agency must ensure
that the institution or program discloses that status accurately,
including the specific academic or instructional programs covered by
that status and the name and contact information for the agency.
* * * * *
(f)(1) If preaccreditation is offered--
(i) The agency's preaccreditation policies must limit the status to
institutions or programs that the agency has determined are likely to
succeed in obtaining accreditation;
(ii) The agency must require all preaccredited institutions to have
a teach-out plan, which must ensure students completing the teach-out
would meet curricular requirements for professional licensure or
certification, if any, and which must include a list of academic
programs offered by the institution and the names of other institutions
that offer similar programs and that could potentially enter into a
teach-out agreement with the institution;
(iii) An agency that denies accreditation to an institution it has
preaccredited may maintain the institution's preaccreditation for
currently enrolled students until the institution has had a reasonable
time to complete the activities in its teach-out plan to assist
students in transferring or completing their programs, but for no more
than 120 days unless approved by the agency for good cause; and
(iv) The agency may not move an accredited institution or program
from accredited to preaccredited status unless, following the loss of
accreditation, the institution or program applies for initial
accreditation and is awarded preaccreditation status under the new
application. Institutions that participated in the title IV, HEA
programs before the loss of accreditation are subject to the
requirements of 34 CFR 600.11(c).
(2) All credits and degrees earned and issued by an institution or
program holding preaccreditation from a nationally recognized agency
are considered by the Secretary to be from an accredited institution or
program.
* * * * *
0
31. Section 602.24 is revised to read as follows:
Sec. 602.24 Additional procedures certain institutional agencies must
have.
If the agency is an institutional accrediting agency and its
accreditation or preaccreditation enables those institutions to obtain
eligibility to participate in title IV, HEA programs, the agency must
demonstrate that it has established and uses all of the following
procedures:
(a) Branch campus. The agency must require the institution to
notify the agency if it plans to establish a branch campus and to
submit a business plan for the branch campus that describes--
(1) The educational program to be offered at the branch campus; and
(2) The projected revenues and expenditures and cash flow at the
branch campus.
(b) Site visits. The agency must undertake a site visit to a new
branch campus or following a change of ownership or control as soon as
practicable, but no later than six months, after the establishment of
that campus or the change of ownership or control.
(c) Teach-out plans and agreements. (1) The agency must require an
institution it accredits to submit a teach-out plan as defined in 34
CFR 600.2 to the agency for approval upon the occurrence of any of the
following events:
(i) For a nonprofit or proprietary institution, the Secretary
notifies the agency of a determination by the institution's independent
auditor expressing doubt about the institution's ability to operate as
a going concern or indicating an adverse opinion or a finding of
material weakness related to financial stability.
(ii) The agency acts to place the institution on probation or
equivalent status.
(iii) The Secretary notifies the agency that the institution is
participating in title IV, HEA programs under a provisional program
participation agreement and the Secretary has required a teach-out plan
as a condition of participation.
(2) The agency must require an institution it accredits or
preaccredits to submit a teach-out plan and, if practicable, teach-out
agreements (as defined in 34 CFR 600.2) to the agency for approval upon
the occurrence of any of the following events:
(i) The Secretary notifies the agency that it has placed the
institution on the reimbursement payment method under 34 CFR 668.162(c)
or the heightened cash monitoring payment method requiring the
Secretary's review of the institution's supporting documentation under
34 CFR 668.162(d)(2).
(ii) The Secretary notifies the agency that the Secretary has
initiated an emergency action against an institution, in accordance
with section 487(c)(1)(G) of the HEA, or an action to limit, suspend,
or terminate an institution participating in any title IV, HEA program,
in accordance with section 487(c)(1)(F) of the HEA.
(iii) The agency acts to withdraw, terminate, or suspend the
accreditation or preaccreditation of the institution.
(iv) The institution notifies the agency that it intends to cease
operations entirely or close a location that provides one hundred
percent of at least one program, including if the location is being
moved and is considered by the Secretary to be a closed school.
(v) A State licensing or authorizing agency notifies the agency
that an institution's license or legal authorization to provide an
educational program has been or will be revoked.
(3) The agency must evaluate the teach-out plan to ensure it
includes a list of currently enrolled students, academic programs
offered by the institution, and the names of other institutions that
offer similar programs and that could potentially enter into a teach-
out agreement with the institution.
(4) If the agency approves a teach-out plan that includes a program
or institution that is accredited by another recognized accrediting
agency, it must notify that accrediting agency of its approval.
(5) The agency may require an institution it accredits or
preaccredits to enter into a teach-out agreement as part of its teach-
out plan.
(6) The agency must require a closing institution to include in its
teach-out agreement--
(i) A complete list of students currently enrolled in each program
at the institution and the program requirements each student has
completed;
(ii) A plan to provide all potentially eligible students with
information about how to obtain a closed school discharge
[[Page 58925]]
and, if applicable, information on State refund policies;
(iii) A record retention plan to be provided to all enrolled
students that delineates the final disposition of teach-out records
(e.g., student transcripts, billing, financial aid records);
(iv) Information on the number and types of credits the teach-out
institution is willing to accept prior to the student's enrollment; and
(v) A clear statement to students of the tuition and fees of the
educational program and the number and types of credits that will be
accepted by the teach-out institution.
(7) The agency must require an institution it accredits or
preaccredits that enters into a teach-out agreement, either on its own
or at the request of the agency, to submit that teach-out agreement for
approval. The agency may approve the teach-out agreement only if the
agreement meets the requirements of 34 CFR 600.2 and this section, is
consistent with applicable standards and regulations, and provides for
the equitable treatment of students being served by ensuring that the
teach-out institution--
(i) Has the necessary experience, resources, and support services
to provide an educational program that is of acceptable quality and
reasonably similar in content, delivery modality, and scheduling to
that provided by the institution that is ceasing operations either
entirely or at one of its locations; however, while an option via an
alternate method of delivery may be made available to students, such an
option is not sufficient unless an option via the same method of
delivery as the original educational program is also provided;
(ii) Has the capacity to carry out its mission and meet all
obligations to existing students; and
(iii) Demonstrates that it--
(A) Can provide students access to the program and services without
requiring them to move or travel for substantial distances or
durations; and
(B) Will provide students with information about additional
charges, if any.
(8) Irrespective of any teach-out plan or signed teach-out
agreement, the agency must not permit an institution to serve as a
teach-out institution under the following conditions:
(i) The institution is subject to the conditions in paragraph
(c)(1) or (2) of this section.
(ii) The institution is under investigation, subject to an action,
or being prosecuted for an issue related to academic quality,
misrepresentation, fraud, or other severe matters by a law enforcement
agency.
(9) The agency is permitted to waive requirements regarding the
percentage of credits that must be earned by a student at the
institution awarding the educational credential if the student is
completing his or her program through a written teach-out agreement or
transfer.
(10) The agency must require the institution to provide copies of
all notifications from the institution related to the institution's
closure or to teach-out options to ensure the information accurately
represents students' ability to transfer credits and may require
corrections.
(d) Closed institution. If an institution the agency accredits or
preaccredits closes without a teach-out plan or agreement, the agency
must work with the Department and the appropriate State agency, to the
extent feasible, to assist students in finding reasonable opportunities
to complete their education without additional charges.
(e) Transfer of credit policies. The accrediting agency must
confirm, as part of its review for initial accreditation or
preaccreditation, or renewal of accreditation, that the institution has
transfer of credit policies that--
(1) Are publicly disclosed in accordance with Sec.
[thinsp]668.43(a)(11); and
(2) Include a statement of the criteria established by the
institution regarding the transfer of credit earned at another
institution of higher education.
(f) Agency designations. In its accrediting practice, the agency
must--
(1) Adopt and apply the definitions of ``branch campus'' and
``additional location'' in 34 CFR 600.2;
(2) On the Secretary's request, conform its designations of an
institution's branch campuses and additional locations with the
Secretary's if it learns its designations diverge; and
(3) Ensure that it does not accredit or preaccredit an institution
comprising fewer than all of the programs, branch campuses, and
locations of an institution as certified for title IV participation by
the Secretary, except with notice to and permission from the Secretary.
(Authority: 20 U.S.C. 1099b)
0
32. Section 602.25 is amended by revising paragraphs (f)(1)(iii) and
(iv) to read as follows:
Sec. 602.25 Due process.
* * * * *
(f) * * *
(1) * * *
(iii) Does not serve only an advisory or procedural role, and has
and uses the authority to make the following decisions: To affirm,
amend, or remand adverse actions of the original decision-making body;
and
(iv) Affirms, amends, or remands the adverse action. A decision to
affirm or amend the adverse action is implemented by the appeals panel
or by the original decision-making body, at the agency's option;
however, in the event of a decision by the appeals panel to remand the
adverse action to the original decision-making body for further
consideration, the appeals panel must explain the basis for a decision
that differs from that of the original decision-making body and the
original decision-making body in a remand must act in a manner
consistent with the appeals panel's decisions or instructions.
* * * * *
0
33. Section 602.26 is amended by:
0
a. Redesignating paragraphs (b), (c), (d), and (e) as paragraphs (c),
(d), (e), and (f);
0
b. Adding a new paragraph (b); and
0
c. Revising newly redesignated paragraphs (c), (d), (e), and (f).
The addition and revisions read as follows:
Sec. 602.26 Notification of accrediting decisions.
* * * * *
(b) Provides written notice of a final decision of a probation or
equivalent status or an initiated adverse action to the Secretary, the
appropriate State licensing or authorizing agency, and the appropriate
accrediting agencies at the same time it notifies the institution or
program of the decision and requires the institution or program to
disclose such an action within seven business days of receipt to all
current and prospective students;
(c) Provides written notice of the following types of decisions to
the Secretary, the appropriate State licensing or authorizing agency,
and the appropriate accrediting agencies at the same time it notifies
the institution or program of the decision, but no later than 30 days
after it reaches the decision:
(1) A final decision to deny, withdraw, suspend, revoke, or
terminate the accreditation or preaccreditation of an institution or
program.
(2) A final decision to take any other adverse action, as defined
by the agency, not listed in paragraph (c)(1) of this section;
(d) Provides written notice to the public of the decisions listed
in paragraphs (b) and (c) of this section within one business day of
its notice to the institution or program;
[[Page 58926]]
(e) For any decision listed in paragraph (c) of this section,
requires the institution or program to disclose the decision to current
and prospective students within seven business days of receipt and
makes available to the Secretary, the appropriate State licensing or
authorizing agency, and the public, no later than 60 days after the
decision, a brief statement summarizing the reasons for the agency's
decision and the official comments that the affected institution or
program may wish to make with regard to that decision, or evidence that
the affected institution has been offered the opportunity to provide
official comment;
(f) Notifies the Secretary, the appropriate State licensing or
authorizing agency, the appropriate accrediting agencies, and, upon
request, the public if an accredited or preaccredited institution or
program--
(1) Decides to withdraw voluntarily from accreditation or
preaccreditation, within 10 business days of receiving notification
from the institution or program that it is withdrawing voluntarily from
accreditation or preaccreditation; or
(2) Lets its accreditation or preaccreditation lapse, within 10
business days of the date on which accreditation or preaccreditation
lapses.
* * * * *
0
34. Section 602.27 is revised to read as follows:
Sec. 602.27 Other information an agency must provide the Department.
(a) The agency must submit to the Department--
(1) A list, updated annually, of its accredited and preaccredited
institutions and programs, which may be provided electronically;
(2) A summary of the agency's major accrediting activities during
the previous year (an annual data summary), if requested by the
Secretary to carry out the Secretary's responsibilities related to this
part;
(3) Any proposed change in the agency's policies, procedures, or
accreditation or preaccreditation standards that might alter its--
(i) Scope of recognition, except as provided in paragraph (a)(4) of
this section; or
(ii) Compliance with the criteria for recognition;
(4) Notification that the agency has expanded its scope of
recognition to include distance education or correspondence courses as
provided in section 496(a)(4)(B)(i)(I) of the HEA. Such an expansion of
scope is effective on the date the Department receives the
notification;
(5) The name of any institution or program it accredits that the
agency has reason to believe is failing to meet its title IV, HEA
program responsibilities or is engaged in fraud or abuse, along with
the agency's reasons for concern about the institution or program; and
(6) If the Secretary requests, information that may bear upon an
accredited or preaccredited institution's compliance with its title IV,
HEA program responsibilities, including the eligibility of the
institution or program to participate in title IV, HEA programs.
(b) If an agency has a policy regarding notification to an
institution or program of contact with the Department in accordance
with paragraph (a)(5) or (6) of this section, it must provide for a
case-by-case review of the circumstances surrounding the contact, and
the need for the confidentiality of that contact. When the Department
determines a compelling need for confidentiality, the agency must
consider that contact confidential upon specific request of the
Department.
0
35. Add Sec. 602.29 to read as follows:
Sec. 602.29 Severability.
If any provision of this subpart or its application to any person,
act, or practice is held invalid, the remainder of the subpart or the
application of its provisions to any person, act, or practice shall not
be affected thereby.
(Authority: 20 U.S.C. 1099b)
Sec. 602.30 [Removed and Reserved]
0
36. Section 602.30 is removed and reserved.
0
37. Section 602.31 is revised to read as follows:
Sec. 602.31 Agency applications and reports to be submitted to the
Department.
(a) Applications for recognition or renewal of recognition. An
accrediting agency seeking initial or continued recognition must submit
a written application to the Secretary. Each accrediting agency must
submit an application for continued recognition at least once every
five years, or within a shorter time period specified in the final
recognition decision, and, for an agency seeking renewal of
recognition, 24 months prior to the date on which the current
recognition expires. The application, to be submitted concurrently with
information required by Sec. [thinsp]602.32(a) and, if applicable,
Sec. [thinsp]602.32(b), must consist of--
(1) A statement of the agency's requested scope of recognition;
(2) Documentation that the agency complies with the criteria for
recognition listed in subpart B of this part, including a copy of its
policies and procedures manual and its accreditation standards; and
(3) Documentation of how an agency that includes or seeks to
include distance education or correspondence courses in its scope of
recognition applies its standards in evaluating programs and
institutions it accredits that offer distance education or
correspondence courses.
(b) Applications for expansions of scope. An agency seeking an
expansion of scope by application must submit a written application to
the Secretary. The application must--
(1) Specify the scope requested;
(2) Provide copies of any relevant standards, policies, or
procedures developed and applied by the agency for its use in
accrediting activities conducted within the expansion of scope proposed
and documentation of the application of these standards, policies, or
procedures; and
(3) Provide the materials required by Sec. [thinsp]602.32(j) and,
if applicable, Sec. [thinsp]602.32(l).
(c) Compliance or monitoring reports. If an agency is required to
submit a compliance or monitoring report, it must do so within 30 days
following the end of the period for achieving compliance as specified
in the decision of the senior Department official or Secretary, as
applicable.
(d) Review following an increase in headcount enrollment. If an
agency that has notified the Secretary in writing of its change in
scope to include distance education or correspondence courses in
accordance with Sec. [thinsp]602.27(a)(4) reports an increase in
headcount enrollment in accordance with Sec. [thinsp]602.19(e) for an
institution it accredits, or if the Department notifies the agency of
such an increase at one of the agency's accredited institutions, the
agency must, within 45 days of reporting the increase or receiving
notice of the increase from the Department, as applicable, submit a
report explaining--
(1) How the agency evaluates the capacity of the institutions or
programs it accredits to accommodate significant growth in enrollment
and to maintain education quality;
(2) The specific circumstances regarding the growth at the
institution or program that triggered the review and the results of any
evaluation conducted by the agency; and
(3) Any other information that the agency deems appropriate to
demonstrate the effective application of the criteria for recognition
or that the Department may require.
[[Page 58927]]
(e) Consent to sharing of information. By submitting an application
for recognition, the agency authorizes Department staff throughout the
application process and during any period of recognition--
(1) To observe its site visits to one or more of the institutions
or programs it accredits or preaccredits, on an announced or
unannounced basis;
(2) To visit locations where agency activities such as training,
review and evaluation panel meetings, and decision meetings take place,
on an announced or unannounced basis;
(3) To obtain copies of all documents the staff deems necessary to
complete its review of the agency; and
(4) To gain access to agency records, personnel, and facilities.
(f) Public availability of agency records obtained by the
Department.
(1) The Secretary's processing and decision-making on requests for
public disclosure of agency materials reviewed under this part are
governed by the Freedom of Information Act, 5 U.S.C. 552; the Trade
Secrets Act, 18 U.S.C. 1905; the Privacy Act of 1974, as amended, 5
U.S.C. 552a; the Federal Advisory Committee Act, 5 U.S.C. Appdx. 1; and
all other applicable laws. In recognition proceedings, agencies must,
before submission to the Department--
(i) Redact the names and any other personally identifiable
information about individual students and any other individuals who are
not agents of the agency or of an institution or program the agency is
reviewing;
(ii) Redact the personal addresses, personal telephone numbers,
personal email addresses, Social Security numbers, and any other
personally identifiable information regarding individuals who are
acting as agents of the agency or of an institution or program under
review;
(iii) Designate all business information within agency submissions
that the agency believes would be exempt from disclosure under
exemption 4 of the Freedom of Information Act (FOIA), 5 U.S.C.
552(b)(4). A blanket designation of all information contained within a
submission, or of a category of documents, as meeting this exemption
will not be considered a good faith effort and will be disregarded; and
(iv) Ensure documents submitted are only those required for
Department review or as requested by Department officials.
(2) The agency may, but is not required to, redact the identities
of institutions or programs that it believes are not essential to the
Department's review of the agency and may identify any other material
the agency believes would be exempt from public disclosure under FOIA,
the factual basis for the request, and any legal basis the agency has
identified for withholding the document from public disclosure.
(3) The Secretary processes FOIA requests in accordance with 34 CFR
part 5 and makes all documents provided to the Advisory Committee
available to the public.
(4) Upon request by Department staff, the agency must disclose to
Department staff any specific material the agency has redacted that
Department staff believes is needed to conduct the staff review.
Department staff will make any arrangements needed to ensure that the
materials are not made public if prohibited by law.
(g) Length of submissions. The Secretary may publish reasonable,
uniform limits on the length of submissions described in this section.
(Authority: 20 U.S.C. 1099b)
0
38. Section 602.32 is revised to read as follows:
Sec. 602.32 Procedures for submitting an application for recognition,
renewal of recognition, expansion of scope, compliance reports, and
increases in enrollment.
(a) An agency preparing for renewing recognition will submit, 24
months prior to the date on which the current recognition expires, and
in conjunction with the materials required by Sec. [thinsp]602.31(a),
a list of all institutions or programs that the agency plans to
consider for an award of initial or renewed accreditation over the next
year or, if none, over the succeeding year, as well as any institutions
or programs currently subject to compliance report review or reporting
requirements. An agency that does not anticipate a review of any
institution or program for an initial award of accreditation or renewed
accreditation in the 24 months prior to the date of recognition
expiration may submit a list of institutions or programs it has
reviewed for an initial award of accreditation or renewal of
accreditation at any time since the prior award of recognition or
leading up to the application for an initial award of recognition.
(b) An agency seeking initial recognition must follow the policies
and procedures outlined in paragraph (a) of this section, but in
addition must also submit--
(1) Letters of support for the agency from at least three
accredited institutions or programs, three educators, and, if
appropriate, three employers or practitioners, explaining the role for
such an agency and the reasons for their support; and
(2) Letters from at least one program or institution that will rely
on the agency as its link to a Federal program upon recognition of the
agency or intends to seek multiple accreditation which will allow it in
the future to designate the agency as its Federal link.
(c) Department staff publishes a notice of the agency's submission
of an application in the Federal Register inviting the public to
comment on the agency's compliance with the criteria for recognition
and establishing a deadline for receipt of public comment.
(d) The Department staff analyzes the agency's application for
initial or renewal of recognition, to determine whether the agency
satisfies the criteria for recognition, taking into account all
available relevant information concerning the compliance of the agency
with those criteria and the agency's consistency in applying the
criteria. The analysis of an application may include and, after January
1, 2021, will include--
(1)(i) Observations from site visits, on an announced or
unannounced basis, to the agency or to a location where the agency
conducts activities such as training, review and evaluation panel
meetings, or decision meetings;
(ii) Observations from site visits, on an announced or unannounced
basis, to one or more of the institutions or programs the agency
accredits or preaccredits;
(iii) A file review at the agency of documents, at which time
Department staff may retain copies of documents needed for inclusion in
the administrative record;
(iv) Review of the public comments and other third-party
information Department staff receives by the established deadline, the
agency's responses to the third-party comments, as appropriate, and any
other information Department staff obtains for purposes of evaluating
the agency under this part; and
(v) Review of complaints or legal actions involving the agency; and
(2) Review of complaints or legal actions against an institution or
program accredited or preaccredited by the agency, which may be
considered but are not necessarily determinative of compliance.
(e) The Department may view as a negative factor when considering
an application for initial, or expansion of scope of, recognition as
proposed by an agency, among other factors, any evidence that the
agency was part of a concerted effort to unnecessarily restrict
[[Page 58928]]
the qualifications necessary for a student to sit for a licensure or
certification examination or otherwise be eligible for entry into a
profession.
(f) Department staff's evaluation of an agency may also include a
review of information directly related to institutions or programs
accredited or preaccredited by the agency relative to their compliance
with the agency's standards, the effectiveness of the standards, and
the agency's application of those standards, but must make all
materials relied upon in the evaluation available to the agency for
review and comment.
(g) If, at any point in its evaluation of an agency seeking initial
recognition, Department staff determines that the agency fails to
demonstrate compliance with the basic eligibility requirements in
Sec. Sec. [thinsp]602.10 through 602.15, the staff--
(1) Returns the agency's application and provides the agency with
an explanation of the deficiencies that caused staff to take that
action; and
(2) Requires that the agency withdraw its application and instructs
the agency that it may reapply when the agency is able to demonstrate
compliance.
(h) Except with respect to an application that has been returned
and is withdrawn under paragraph (g) of this section, when Department
staff completes its evaluation of the agency, the staff may and, after
July 1, 2021, will--
(1) Prepare a written draft analysis of the agency's application;
(2) Send to the agency the draft analysis including any identified
areas of potential noncompliance and all third-party comments and
complaints, if applicable, and any other materials the Department
received by the established deadline or is including in its review;
(3) Invite the agency to provide a written response to the draft
analysis and third-party comments or other material included in the
review, specifying a deadline that provides at least 180 days for the
agency's response;
(4) Review the response to the draft analysis the agency submits,
if any, and prepares the written final analysis--
(i) Indicating that the agency is in full compliance, substantial
compliance, or noncompliance with each of the criteria for recognition;
and
(ii) Recommending that the senior Department official approve,
renew with compliance reporting requirements due in 12 months, renew
with compliance reporting requirements with a deadline in excess of 12
months based on a finding of good cause and extraordinary
circumstances, approve with monitoring or other reporting requirements,
or deny, limit, suspend, or terminate recognition; and
(5) Provide to the agency, no later than 30 days before the
Advisory Committee meeting, the final staff analysis and any other
available information provided to the Advisory Committee under Sec.
602.34(c).
(i) The agency may request that the Advisory Committee defer acting
on an application at that Advisory Committee meeting if Department
staff fails to provide the agency with the materials described, and
within the timeframes provided, in paragraphs (g)(3) and (5) of this
section. If the Department staff's failure to send the materials in
accordance with the timeframe described in paragraph (g)(3) or (5) of
this section is due to the failure of the agency to, by the deadline
established by the Secretary, submit reports to the Department, other
information the Secretary requested, or its response to the draft
analysis, the agency forfeits its right to request a deferral of its
application.
(j) An agency seeking an expansion of scope, either as part of the
regular renewal of recognition process or during a period of
recognition, must submit an application to the Secretary, separately or
as part of the policies and procedures outlined in paragraph (a) of
this section, that satisfies the requirements of Sec. Sec. 602.12(b)
and 602.31(b) and--
(1) States the reason for the expansion of scope request;
(2) Includes letters from at least three institutions or programs
that would seek accreditation under one or more of the elements of the
expansion of scope; and
(3) Explains how the agency must expand capacity to support the
expansion of scope, if applicable, and, if necessary, how it will do so
and how its budget will support that expansion of capacity.
(k) The Department may view as a negative factor when considering
an application for initial or expansion of scope of recognition as
proposed by an agency, among other factors, any evidence that the
agency was part of a concerted effort to unnecessarily restrict the
qualifications necessary for a student to sit for a licensure or
certification examination or otherwise be eligible for entry into a
profession.
(l) Department staff's evaluation of a compliance report includes
review of public comments solicited by Department staff in the Federal
Register received by the established deadline, the agency's responses
to the third-party comments, as appropriate, other third-party
information Department staff receives, and additional information
described in paragraphs (d) and (e) of this section, as appropriate.
(m) The Department will process an application for an expansion of
scope, compliance report, or increase in enrollment report in
accordance with paragraphs with paragraphs (c) through (h) of this
section.
(Authority: 20 U.S.C. 1099b)
0
39. Section 602.33 is revised to read as follows:
Sec. 602.33 Procedures for review of agencies during the period of
recognition, including the review of monitoring reports.
(a) Department staff may review the compliance of a recognized
agency with the criteria for recognition at any time--
(1) Based on the submission of a monitoring report as directed by a
decision by the senior Department official or Secretary; or
(2) Based on any information that, as determined by Department
staff, appears credible and raises concerns relevant to the criteria
for recognition.
(b) The review may include, but need not be limited to, any of the
activities described in Sec. 602.32(d) and (f).
(c) If, in the course of the review, and after providing the agency
the documentation concerning the inquiry and consulting with the
agency, Department staff notes that one or more deficiencies may exist
in the agency's compliance with the criteria for recognition or in the
agency's effective application of those criteria, Department staff--
(1) Prepares a written draft analysis of the agency's compliance
with the criteria of concern;
(2) Sends to the agency the draft analysis including any identified
areas of noncompliance and all supporting documentation;
(3) Invites the agency to provide a written response to the draft
analysis within 90 days; and
(4) Reviews any response provided by the agency, including any
monitoring report submitted, and either--
(i) Concludes the review;
(ii) Continues monitoring of the agency's areas of deficiencies; or
(iii)(A) Notifies the agency, in the event that the agency's
response or monitoring report does not satisfy the staff, that the
draft analysis will be finalized for presentation to the Advisory
Committee;
(B) Publishes a notice in the Federal Register with an invitation
for the public to comment on the agency's compliance with the criteria
in question and establishing a deadline for receipt of public comment;
(C) Provides the agency with a copy of all public comments received
and
[[Page 58929]]
invites a written response from the agency;
(D) Finalizes the staff analysis as necessary to reflect its review
of any agency response and any public comment received;
(E) Provides to the agency, no later than 30 days before the
Advisory Committee meeting, the final staff analysis and a recognition
recommendation and any other information provided to the Advisory
Committee under Sec. 602.34(c); and
(F) Submits the matter for review by the Advisory Committee in
accordance with Sec. 602.34.
(Authority: 20 U.S.C. 1099b)
0
40. Section 602.34 is revised to read as follows:
Sec. 602.34 Advisory Committee meetings.
(a) Department staff submits a proposed schedule to the Chairperson
of the Advisory Committee based on anticipated completion of staff
analyses.
(b) The Chairperson of the Advisory Committee establishes an agenda
for the next meeting and, in accordance with the Federal Advisory
Committee Act, presents it to the Designated Federal Official for
approval.
(c) Before the Advisory Committee meeting, Department staff
provides the Advisory Committee with--
(1) The agency's application for recognition, renewal of
recognition, or expansion of scope when Advisory Committee review is
required, or the agency's compliance report and supporting
documentation submitted by the agency;
(2) The final Department staff analysis of the agency developed in
accordance with Sec. [thinsp]602.32 or Sec. [thinsp]602.33, and any
supporting documentation;
(3) The agency's response to the draft analysis;
(4) Any written third-party comments the Department received about
the agency on or before the established deadline;
(5) Any agency response to third-party comments; and
(6) Any other information Department staff relied upon in
developing its analysis.
(d) At least 30 days before the Advisory Committee meeting, the
Department publishes a notice of the meeting in the Federal Register
inviting interested parties to make oral presentations before the
Advisory Committee.
(e) The Advisory Committee considers the materials provided under
paragraph (c) of this section in a public meeting and invites
Department staff, the agency, and other interested parties to make oral
presentations during the meeting. A transcript is made of all Advisory
Committee meetings.
(f) The written motion adopted by the Advisory Committee regarding
each agency's recognition will be made available during the Advisory
Committee meeting. The Department will provide each agency, upon
request, with a copy of the motion on recognition at the meeting. Each
agency that was reviewed will be sent an electronic copy of the motion
relative to that agency as soon as practicable after the meeting.
(g) After each meeting of the Advisory Committee, the Advisory
Committee forwards to the senior Department official its recommendation
with respect to each agency, which may include, but is not limited to--
(1)(i) For an agency that is fully compliant, approve initial or
renewed recognition;
(ii) Continue recognition with a required compliance report to be
submitted to the Department within 12 months from the decision of the
senior Department official;
(iii) In conjunction with a finding of exceptional circumstances
and good cause, continue recognition for a specified period in excess
of 12 months pending submission of a compliance report;
(iv) In the case of substantial compliance, grant initial
recognition or renewed recognition and recommend a monitoring report
with a set deadline to be reviewed by Department staff to ensure that
corrective action is taken, and full compliance is achieved or
maintained (or for action by staff under Sec. [thinsp]602.33 if it is
not); or
(v) Deny, limit, suspend, or terminate recognition;
(2) Grant or deny a request for expansion of scope; or
(3) Revise or affirm the scope of the agency.
(Authority: 20 U.S.C. 1099b)
0
41. Section 602.35 is amended:
0
a. In paragraph (a), by adding the word ``business'' between ``ten''
and ``days'';
0
b. In paragraph (c)(1), by removing the words ``documentary evidence''
and adding in their place the word ``documentation''; and
0
c. In paragraph (c)(2), by adding the word ``business'' between ``ten''
and ``days'' and adding a sentence to the end of the paragraph.
The addition reads as follows:
Sec. 602.35 Responding to the Advisory Committee's recommendation.
* * * * *
(c) * * *
(2) * * * No additional comments or new documentation may be
submitted after the responses described in this paragraph are
submitted.
* * * * *
0
42. Section 602.36 is revised to read as follows:
Sec. 602.36 Senior Department official's decision.
(a) The senior Department official makes a decision regarding
recognition of an agency based on the record compiled under Sec. Sec.
602.32, 602.33, 602.34, and 602.35 including, as applicable, the
following:
(1) The materials provided to the Advisory Committee under Sec.
602.34(c).
(2) The transcript of the Advisory Committee meeting.
(3) The recommendation of the Advisory Committee.
(4) Written comments and responses submitted under Sec. 602.35.
(5) New documentation submitted in accordance with Sec.
602.35(c)(1).
(6) A communication from the Secretary referring an issue to the
senior Department official's consideration under Sec. 602.37(e).
(b) In the event that statutory authority or appropriations for the
Advisory Committee ends, or there are fewer duly appointed Advisory
Committee members than needed to constitute a quorum, and under
extraordinary circumstances when there are serious concerns about an
agency's compliance with subpart B of this part that require prompt
attention, the senior Department official may make a decision on an
application for renewal of recognition or compliance report on the
record compiled under Sec. 602.32 or Sec. 602.33 after providing the
agency with an opportunity to respond to the final staff analysis. Any
decision made by the senior Department official under this paragraph
from the Advisory Committee may be appealed to the Secretary as
provided in Sec. 602.37.
(c) Following consideration of an agency's recognition under this
section, the senior Department official issues a recognition decision.
(d) Except with respect to decisions made under paragraph (f) or
(g) of this section and matters referred to the senior Department
official under Sec. 602.37(e) or (f), the senior Department official
notifies the agency in writing of the senior Department official's
decision regarding the agency's recognition within 90 days of the
Advisory Committee meeting or conclusion of the review under paragraph
(b) of this section.
[[Page 58930]]
(e) The senior Department official's decision may include, but is
not limited to, approving for recognition; approving with a monitoring
report; denying, limiting, suspending, or terminating recognition
following the procedures in paragraph (g) of this section; granting or
denying an application for an expansion of scope; revising or affirming
the scope of the agency; or continuing recognition pending submission
and review of a compliance report under Sec. Sec. 602.32 and 602.34
and review of the report by the senior Department official under this
section.
(1)(i) The senior Department official approves recognition if the
agency has demonstrated compliance or substantial compliance with the
criteria for recognition listed in subpart B of this part. The senior
Department official may determine that the agency has demonstrated
compliance or substantial compliance with the criteria for recognition
if the agency has a compliant policy or procedure in place but has not
had the opportunity to apply such policy or procedure.
(ii) If the senior Department official approves recognition, the
recognition decision defines the scope of recognition and the
recognition period. The recognition period does not exceed five years,
including any time during which recognition was continued to permit
submission and review of a compliance report.
(iii) If the scope of recognition is less than that requested by
the agency, the senior Department official explains the reasons for
continuing or approving a lesser scope.
(2)(i) Except as provided in paragraph (e)(3) of this section, if
the agency fails to comply with the criteria for recognition listed in
subpart B of this part, the senior Department official denies, limits,
suspends, or terminates recognition.
(ii) If the senior Department official denies, limits, suspends, or
terminates recognition, the senior Department official specifies the
reasons for this decision, including all criteria the agency fails to
meet and all criteria the agency has failed to apply effectively.
(3)(i) If the senior Department official concludes an agency is
noncompliant, the senior Department official may continue the agency's
recognition, pending submission of a compliance report that will be
subject to review in the recognition process, provided that--
(A) The senior Department official concludes that the agency will
demonstrate compliance with, and effective application of, the criteria
for recognition within 12 months from the date of the senior Department
official's decision; or
(B) The senior Department official identifies a deadline more than
12 months from the date of the decision by which the senior Department
official concludes the agency will demonstrate full compliance with,
and effective application of, the criteria for recognition, and also
identifies exceptional circumstances and good cause for allowing the
agency more than 12 months to achieve compliance and effective
application.
(ii) In the case of a compliance report ordered under paragraph
(e)(3)(i) of this section, the senior Department official specifies the
criteria the compliance report must address, and the time period for
achieving compliance and effective application of the criteria. The
compliance report documenting compliance and effective application of
criteria is due not later than 30 days after the end of the period
specified in the senior Department official's decision.
(iii) If the record includes a compliance report required under
paragraph (e)(3)(i) of this section, and the senior Department official
determines that an agency has not complied with the criteria for
recognition, or has not effectively applied those criteria, during the
time period specified by the senior Department official in accordance
with paragraph (e)(3)(i) of this section, the senior Department
official denies, limits, suspends, or terminates recognition, except,
in extraordinary circumstances, upon a showing of good cause for an
extension of time as determined by the senior Department official and
detailed in the senior Department official's decision. If the senior
Department official determines good cause for an extension has been
shown, the senior Department official specifies the length of the
extension and what the agency must do during it to merit a renewal of
recognition.
(f) If the senior Department official determines that the agency is
substantially compliant, or is fully compliant but has concerns about
the agency maintaining compliance, the senior Department official may
approve the agency's recognition or renewal of recognition and require
periodic monitoring reports that are to be reviewed and approved by
Department staff.
(g) If the senior Department official determines, based on the
record, that a decision to deny, limit, suspend, or terminate an
agency's recognition may be warranted based on a finding that the
agency is noncompliant with one or more criteria for recognition, or if
the agency does not hold institutions or programs accountable for
complying with one or more of the agency's standards or criteria for
accreditation that were not identified earlier in the proceedings as an
area of noncompliance, the senior Department official provides--
(1) The agency with an opportunity to submit a written response
addressing the finding; and
(2) The staff with an opportunity to present its analysis in
writing.
(h) If relevant and material information pertaining to an agency's
compliance with recognition criteria, but not contained in the record,
comes to the senior Department official's attention while a decision
regarding the agency's recognition is pending before the senior
Department official, and if the senior Department official concludes
the recognition decision should not be made without consideration of
the information, the senior Department official either--
(1)(i) Does not make a decision regarding recognition of the
agency; and
(ii) Refers the matter to Department staff for review and analysis
under Sec. 602.32 or Sec. 602.33, as appropriate, and consideration
by the Advisory Committee under Sec. 602.34; or
(2)(i) Provides the information to the agency and Department staff;
(ii) Permits the agency to respond to the senior Department
official and the Department staff in writing, and to include additional
documentation relevant to the issue, and specifies a deadline;
(iii) Provides Department staff with an opportunity to respond in
writing to the agency's submission under paragraph (h)(2)(ii) of this
section, specifying a deadline; and
(iv) Issues a recognition decision based on the record described in
paragraph (a) of this section, as supplemented by the information
provided under this paragraph (h).
(i) No agency may submit information to the senior Department
official, or ask others to submit information on its behalf, for
purposes of invoking paragraph (h) of this section. Before invoking
paragraph (h) of this section, the senior Department official will take
into account whether the information, if submitted by a third party,
could have been submitted in accordance with Sec. 602.32(a) or Sec.
602.33(e)(2).
(j) If the senior Department official does not reach a final
decision to approve, deny, limit, suspend, or terminate an agency's
recognition before the expiration of its recognition period, the senior
Department official
[[Page 58931]]
automatically extends the recognition period until a final decision is
reached.
(k) Unless appealed in accordance with Sec. 602.37, the senior
Department official's decision is the final decision of the Secretary.
(Authority: 20 U.S.C. 1099b)
0
43. Section 602.37 is revised to read as follows:
Sec. 602.37 Appealing the senior Department official's decision to
the Secretary.
(a) The agency may appeal the senior Department official's decision
to the Secretary. Such appeal stays the decision of the senior
Department official until final disposition of the appeal. If an agency
wishes to appeal, the agency must--
(1) Notify the Secretary and the senior Department official in
writing of its intent to appeal the decision of the senior Department
official, no later than 10 business days after receipt of the decision;
(2) Submit its appeal to the Secretary in writing no later than 30
days after receipt of the decision; and
(3) Provide the senior Department official with a copy of the
appeal at the same time it submits the appeal to the Secretary.
(b) The senior Department official may file a written response to
the appeal. To do so, the senior Department official must--
(1) Submit a response to the Secretary no later than 30 days after
receipt of a copy of the appeal; and
(2) Provide the agency with a copy of the senior Department
official's response at the same time it is submitted to the Secretary.
(c) Once the agency's appeal and the senior Department official's
response, if any, have been provided, no additional written comments
may be submitted by either party.
(d) Neither the agency nor the senior Department official may
include in its submission any new documentation it did not submit
previously in the proceeding.
(e) On appeal, the Secretary makes a recognition decision, as
described in Sec. [thinsp]602.36(e). If the decision requires a
compliance report, the report is due within 30 days after the end of
the period specified in the Secretary's decision. The Secretary renders
a final decision after taking into account the senior Department
official's decision, the agency's written submissions on appeal, the
senior Department official's response to the appeal, if any, and the
entire record before the senior Department official. The Secretary
notifies the agency in writing of the Secretary's decision regarding
the agency's recognition.
(f) The Secretary may determine, based on the record, that a
decision to deny, limit, suspend, or terminate an agency's recognition
may be warranted based on a finding that the agency is noncompliant
with, or ineffective in its application with respect to, a criterion or
criteria for recognition not identified as an area of noncompliance
earlier in the proceedings. In that case, the Secretary, without
further consideration of the appeal, refers the matter to the senior
Department official for consideration of the issue under Sec.
[thinsp]602.36(g). After the senior Department official makes a
decision, the agency may, if desired, appeal that decision to the
Secretary.
(g) If relevant and material information pertaining to an agency's
compliance with recognition criteria, but not contained in the record,
comes to the Secretary's attention while a decision regarding the
agency's recognition is pending before the Secretary, and if the
Secretary concludes the recognition decision should not be made without
consideration of the information, the Secretary either--
(1)(i) Does not make a decision regarding recognition of the
agency; and
(ii) Refers the matter to Department staff for review and analysis
under Sec. [thinsp]602.32 or Sec. [thinsp]602.33, as appropriate;
review by the Advisory Committee under Sec. [thinsp]602.34; and
consideration by the senior Department official under Sec.
[thinsp]602.36; or
(2)(i) Provides the information to the agency and the senior
Department official;
(ii) Permits the agency to respond to the Secretary and the senior
Department official in writing, and to include additional documentation
relevant to the issue, and specifies a deadline;
(iii) Provides the senior Department official with an opportunity
to respond in writing to the agency's submission under paragraph
(g)(2)(ii) of this section, specifying a deadline; and
(iv) Issues a recognition decision based on all the materials
described in paragraphs (e) and (g) of this section.
(h) No agency may submit information to the Secretary, or ask
others to submit information on its behalf, for purposes of invoking
paragraph (g) of this section. Before invoking paragraph (g) of this
section, the Secretary will take into account whether the information,
if submitted by a third party, could have been submitted in accordance
with Sec. [thinsp]602.32(a) or Sec. [thinsp]602.33(c).
(i) If the Secretary does not reach a final decision on appeal to
approve, deny, limit, suspend, or terminate an agency's recognition
before the expiration of its recognition period, the Secretary
automatically extends the recognition period until a final decision is
reached.
(Authority: 20 U.S.C. 1099b)
0
44. Add Sec. 602.39 to read as follows:
Sec. 602.39 Severability.
If any provision of this subpart or its application to any person,
act, or practice is held invalid, the remainder of the subpart or the
application of its provisions to any person, act, or practice shall not
be affected thereby.
(Authority: 20 U.S.C. 1099b)
PART 603--SECRETARY'S RECOGNITION PROCEDURES FOR STATE AGENCIES
0
45. The authority citation for part 603 continues to read as follows:
Authority: 20 U.S.C. 1094(C)(4), unless otherwise noted.
Sec. 603.24 [Amended]
0
46. Section 603.24 is amended by removing paragraph (c) and
redesignating paragraph (d) as paragraph (c).
0
47. Add Sec. 603.25 to read as follows:
Sec. 603.25 Severability.
If any provision of this subpart or its application to any person,
act, or practice is held invalid, the remainder of the subpart or the
application of its provisions to any person, act, or practice shall not
be affected thereby.
PART 654--[REMOVED AND RESERVED]
0
48. Under the authority of 20 U.S.C. 1099b, part 654 is removed and
reserved.
PART 668--STUDENT ASSISTANCE GENERAL PROVISIONS
0
49. The authority citation for part 668 continues to read as follows:
Authority: 20 U.S.C. 1001-1003, 1070g, 1085, 1088, 1091, 1092,
1094, 1099c-1, 1221-3, and 1231a, unless otherwise noted.
Sec. [thinsp]668.8 [Amended]
0
50. Section 668.8 is amended in paragraph (l)(2) introductory text by
removing the words ``in accordance with 34 CFR 602.24(f) or, if
applicable, 34 CFR 603.24(c),''.
0
51. Section 668.26 is amended by:
0
a. Redesignating paragraph (e) as paragraph (f); and
[[Page 58932]]
0
b. Adding new paragraph (e).
The addition reads as follows:
Sec. [thinsp]668.26 End of an institution's participation in the
Title IV, HEA programs.
* * * * *
(e)(1) Notwithstanding the requirements of any other provision in
this section, with agreement from the institution's accrediting agency
and State, the Secretary may permit an institution to continue to
originate, award, or disburse funds under a Title IV, HEA program for
no more than 120 days following the date of a final, non-appealable
decision by an accrediting agency to withdraw, suspend, or terminate
accreditation, by a State authorizing agency to remove State
authorization, or by the Secretary to end the institution's
participation in title IV, HEA programs if--
(i) The institution has notified the Secretary of its plans to
conduct an orderly closure in accordance with any applicable
requirements of its accrediting agency;
(ii) As part of the institution's orderly closure, it is performing
a teach-out that has been approved by its accrediting agency;
(iii) The institution agrees to abide by the conditions of the
program participation agreement that was in effect on the date of the
decision under paragraph (e)(1), except that it will originate, award,
or disburse funds under that agreement only to enrolled students who
can complete the program within 120 days of the decision under
paragraph (e)(1) or who can transfer to a new institution; and
(iv) The institution presents the Secretary with acceptable written
assurances that--
(A) The health and safety of the institution's students are not at
risk;
(B) The institution has adequate financial resources to ensure that
instructional services remain available to students during the teach-
out; and
(C) The institution is not subject to probation or its equivalent,
or adverse action by the institution's State authorizing body or
accrediting agency, except as provided in paragraph (e)(1).
(2) An institution is prohibited from engaging in
misrepresentation, consistent with 34 CFR part 668 subpart F and
consistent with 34 CFR part 685 subpart B, about the nature of its
teach-out plans, teach-out agreements, and transfer of credit.
* * * * *
0
52. Add Sec. 668.29 to read as follows:
Sec. 668.29 Severability.
If any provision of this subpart or its application to any person,
act, or practice is held invalid, the remainder of the subpart or the
application of its provisions to any person, act, or practice shall not
be affected thereby.
Sec. [thinsp]668.41 [Amended]
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53. Section 668.41 is amended by:
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a. Removing the word ``calculates'' and adding in its place the phrase
``publishes or uses in advertising'' in paragraph (d)(5)(i)(A);
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b. Removing and reserving paragraph (d)(5)(ii); and
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c. Removing paragraph (d)(5)(iii).
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54. Section 668.43 is amended by:
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a. Removing the word ``and'' at the end of paragraph (a)(5)(iii);
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b. Adding the word ``and'' at the end of paragraph (a)(5)(iv);
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c. Adding paragraph (a)(5)(v);
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d. Removing the word ``and'' at the end of paragraph (a)(10)(iii);
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e. Revising paragraphs (a)(11) and (12);
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f. Adding paragraphs (a)(13) through (20); and
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g. Adding paragraph (c).
The additions and revisions read as follows:
Sec. [thinsp]668.43 Institutional information.
(a) * * *
(5) * * *
(v) If an educational program is designed to meet educational
requirements for a specific professional license or certification that
is required for employment in an occupation, or is advertised as
meeting such requirements, information regarding whether completion of
that program would be sufficient to meet licensure requirements in a
State for that occupation, including--
(A) A list of all States for which the institution has determined
that its curriculum meets the State educational requirements for
licensure or certification;
(B) A list of all States for which the institution has determined
that its curriculum does not meet the State educational requirements
for licensure or certification; and
(C) A list of all States for which the institution has not made a
determination that its curriculum meets the State educational
requirements for licensure or certification;
* * * * *
(11) A description of the transfer of credit policies established
by the institution, which must include a statement of the institution's
current transfer of credit policies that includes, at a minimum--
(i) Any established criteria the institution uses regarding the
transfer of credit earned at another institution and any types of
institutions or sources from which the institution will not accept
credits;
(ii) A list of institutions with which the institution has
established an articulation agreement; and
(iii) Written criteria used to evaluate and award credit for prior
learning experience including, but not limited to, service in the armed
forces, paid or unpaid employment, or other demonstrated competency or
learning;
(12) A description in the program description of written
arrangements the institution has entered into in accordance with Sec.
[thinsp]668.5, including, but not limited to, information on--
(i) The portion of the educational program that the institution
that grants the degree or certificate is not providing;
(ii) The name and location of the other institutions or
organizations that are providing the portion of the educational program
that the institution that grants the degree or certificate is not
providing;
(iii) The method of delivery of the portion of the educational
program that the institution that grants the degree or certificate is
not providing; and
(iv) Estimated additional costs students may incur as the result of
enrolling in an educational program that is provided, in part, under
the written arrangement;
(13) The percentage of those enrolled, full-time students at the
institution who--
(i) Are male;
(ii) Are female;
(iii) Receive a Federal Pell Grant; and
(iv) Are a self-identified member of a racial or ethnic group;
(14) If the institution's accrediting agency or State requires the
institution to calculate and report a placement rate, the institution's
placement in employment of, and types of employment obtained by,
graduates of the institution's degree or certificate programs, gathered
from such sources as alumni surveys, student satisfaction surveys, the
National Survey of Student Engagement, the Community College Survey of
Student Engagement, State data systems, or other relevant sources
approved by the institution's accrediting agency as applicable;
(15) The types of graduate and professional education in which
graduates of the institution's four-year degree programs enrolled,
gathered from such sources as alumni surveys, student satisfaction
surveys, the National Survey of Student Engagement, State data systems,
or other relevant sources;
(16) The fire safety report prepared by the institution pursuant to
Sec. [thinsp]668.49;
[[Page 58933]]
(17) The retention rate of certificate- or degree-seeking, first-
time, full-time, undergraduate students entering the institution;
(18) Institutional policies regarding vaccinations;
(19) If the institution is required to maintain a teach-out plan by
its accrediting agency, notice that the institution is required to
maintain such teach-out plan and the reason that the accrediting agency
required such plan under Sec. [thinsp]602.24(c)(1); and
(20) If an enforcement action or prosecution is brought against the
institution by a State or Federal law enforcement agency in any matter
where a final judgment against the institution, if rendered, would
result in an adverse action by an accrediting agency against the
institution, revocation of State authorization, or limitation,
suspension, or termination of eligibility under title IV, notice of
that fact.
* * * * *
(c)(1) If the institution has made a determination under paragraph
(a)(5)(v) of this section that the program's curriculum does not meet
the State educational requirements for licensure or certification in
the State in which a prospective student is located, or if the
institution has not made a determination regarding whether the
program's curriculum meets the State educational requirements for
licensure or certification, the institution must provide notice to that
effect to the student prior to the student's enrollment in the program.
(2) If the institution makes a determination under paragraph
(a)(5)(v)(B) of this section that a program's curriculum does not meet
the State educational requirements for licensure or certification in a
State in which a student who is currently enrolled in such program is
located, the institution must provide notice to that effect to the
student within 14 calendar days of making such determination.
(3)(i) Disclosures under paragraphs (c)(1) and (2) of this section
must be made directly to the student in writing, which may include
through email or other electronic communication.
(ii)(A) For purposes of this paragraph (c), an institution must
make a determination regarding the State in which a student is located
in accordance with the institution's policies or procedures, which must
be applied consistently to all students.
(B) The institution must, upon request, provide the Secretary with
written documentation of its determination of a student's location
under paragraph (c)(3)(ii)(A) of this section, including the basis for
such determination.
(C) An institution must make a determination regarding the State in
which a student is located at the time of the student's initial
enrollment in an educational program and, if applicable, upon formal
receipt of information from the student, in accordance with the
institution's procedures under paragraph (c)(3)(ii)(A) of this section,
that the student's location has changed to another State.
* * * * *
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55. Section 668.50 is revised to read as follows:
Sec. 668.50 Severability.
If any provision of this subpart or its application to any person,
act, or practice is held invalid, the remainder of the subpart or the
application of its provisions to any person, act, or practice shall not
be affected thereby.
Sec. [thinsp]668.188 [Amended]
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56. Section 668.188 is amended in paragraph (c) introductory text by
removing the citation ``34 CFR 602.3'' and adding in its place ``34 CFR
600.2''.
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57. Add Sec. 668.198 to read as follows:
Sec. 668.198 Severability.
If any provision of this subpart or its application to any person,
act, or practice is held invalid, the remainder of the subpart or the
application of its provisions to any person, act, or practice shall not
be affected thereby.
PART 674--FEDERAL PERKINS LOAN PROGRAM
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58. The authority citation for part 674 continues to read as follows:
Authority: 20 U.S.C. 1070g, 1087aa-1087hh; Pub. L. 111-256, 124
Stat. 2643; unless otherwise noted.
Sec. [thinsp]674.33 [Amended]
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59. Section 674.33 is amended in paragraph (g)(4)(i)(C) by removing the
citation ``34 CFR 602.2'' and adding in its place ``34 CFR 600.2''.
[FR Doc. 2019-23129 Filed 10-31-19; 8:45 am]
BILLING CODE 4000-01-P