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DEPARTMENT OF EDUCATION correspondence courses constitute 50 title IV grant or loan assistance that the percent or more of the courses in which student earned if the student completes 34 CFR Parts 600, 602 and 668 the student enrolled during an award all the requirements for graduation for a [Docket ID ED–2018–OPE–0076] year; non-term program or a subscription- • Limit the requirement for the based program, if the student completes RIN 1840–AD38 Secretary’s approval to an institution’s one or more modules that comprise 49 first direct assessment program at each percent or more of the number of days Distance Education and Innovation credential level; in the payment period, or if the • AGENCY: Office of Postsecondary Require institutions to report to the institution obtains written confirmation Education, Department of Education. Secretary when they add a second or that the student will resume attendance subsequent direct assessment program ACTION: Final regulations. in a subscription-based or non-term or establish a written arrangement for an program; SUMMARY: The Secretary amends the ineligible institution or organization to • Remove provisions pertaining to the general, establishing eligibility, provide more than 25 percent, but no use and calculation of the Net Present maintaining eligibility, and losing more than 50 percent, of a program; Value of institutional loans for the eligibility sections of the Institutional • Require prompt Department action calculation of the 90/10 ratio for Eligibility regulations issued under the on any application an institution proprietary institutions, because the Higher Education Act of 1965, as submits to the Secretary seeking a provisions are no longer applicable; amended (HEA), related to distance determination that it qualifies as an • Clarify the satisfactory academic education and innovation. In addition, eligible institution and on any progress requirements for non-term the Secretary amends the Student reapplications for a determination that credit or clock programs, term-based Assistance General Provisions the institution continues to meet the programs that are not a subscription- regulations issued under the HEA. requirements to be an eligible based program, and subscription-based DATES: institution for HEA programs; programs; Effective date: These regulations • • are effective July 1, 2021. Allow students enrolled in eligible Clarify that the Secretary will rely Implementation date: For the foreign institutions to complete up to 25 on the requirements established by an implementation dates of the included percent of an eligible program at an institution’s accrediting agency or State regulatory provisions, see the eligible institution in the United States; authorizing agency to evaluate an Implementation Date of These and clarify that, notwithstanding this institution’s appeal of a final audit or Regulations section of this document. provision, an eligible foreign institution program review determination that may permit a Direct Loan borrower to includes a finding about the FOR FURTHER INFORMATION CONTACT: For perform research in the United States institution’s classification of a course or information on these Distance for not more than one academic year if program as distance education, or the Education and Innovation regulations, the research is conducted during the institution’s assignment of credit hours; please contact Greg Martin at (202) 453– dissertation phase of a doctoral • Clarify that the Secretary may deny 7535 or by email at gregory.martin@ program; an institution’s certification or ed.gov. • Clarify the conditions under which recertification application to participate If you use a telecommunications a participating foreign institution may in the title IV, HEA programs if an device for the deaf (TDD) or a text enter into a written arrangement with an institution is not financially responsible telephone (TTY), call the Federal Relay entity that does not participate in the or does not submit its audits in a timely Service (FRS), toll free, at (800) 877– title IV, HEA programs; manner; and 8339. • Provide flexibility to institutions to • Clarify that an institution is not SUPPLEMENTARY INFORMATION: modify their curricula at the financially responsible if a person who recommendations of industry advisory Executive Summary exercises substantial ownership or boards and without relying on a control over an institution also Purpose of This Regulatory Action: traditional faculty-led decision-making exercised substantial ownership or Through this regulatory action, the process; control over another institution that Department of Education (Department • Provide flexibility to institutions closed without executing a viable teach- or we) amends the general, establishing when conducting clock-to-credit hour out plan or agreement. eligibility, maintaining eligibility, and conversions to eliminate confusion losing eligibility sections of the about the inclusion of homework time Costs and Benefits Institutional Eligibility regulations in the clock-hour determination. As further detailed in the Regulatory issued under the Higher Education Act • Clarify the eligibility requirements Impact Analysis, the benefits of the of 1965, as amended (HEA), related to for a direct assessment program; regulations include— distance education and innovation. In • Clarify, in consideration of the (1) Updating and clarifying addition, the Secretary amends the challenges to institutions posed by definitions of key terms related to Student Assistance General Provisions minimum program length standards distance education, correspondence regulations issued under the HEA. A associated with occupational licensing courses, direct assessment, and more detailed summary can be found in requirements, which vary from State to competency-based programs to support the Summary of the Major Provisions of State, that an institution may the continued development of these This Regulatory Action section. demonstrate a reasonable relationship innovative educational methods; between the length of a program, as (2) Identifying a disbursement process Summary of the Major Provisions of defined in 20 U.S.C. 1001(b)(1), and the for a subscription model for This Regulatory Action entry-level requirements of the competency-based education so schools These regulations— occupation for which that program know how their students can access title • Clarify that when calculating the prepares students; IV aid for them, removing one potential number of correspondence students, a • Clarify that a student is not barrier to growth of such programs; and student is considered ‘‘enrolled in considered to have withdrawn for (3) Eliminating references to outdated correspondence courses’’ if purposes of determining the amount of technologies and making the regulations

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flexible enough to accommodate further estimate scenario and an increase in Pell which they pertain. Generally, we do technological advancements. Grant outlays of $1,021 million over 10 not address minor changes, technical Institutions that choose to offer these years, for a total net impact of $784 changes, non-substantive changes, programs will benefit from the million. The Department provides recommended changes that the law does clarifications of terms and processes additional detail related to budget not authorize the Secretary to make, or involved in establishing and estimates in the Regulatory Impact comments pertaining to operational administering direct assessment Analysis section and provides burden processes. We also do not typically programs and reduced barriers to entry. estimates in the Paperwork Reduction address comments pertaining to issues While those currently offering such Act section. that were not within the scope of the programs or competency-based courses Implementation Date of These NPRM. will be best positioned to offer new Regulations: Section 482(c) of the HEA programs in the near-term, we expect requires that we publish regulations General Support additional institutions to take advantage affecting programs under title IV of the Comments: Many commenters of the opportunities to offer new HEA in final form by November 1, prior expressed support for the regulations programs. While it is more a function of to the start of the award year (July 1) to and urged the Department not to modify continued evolution in the which they apply. However, that section them in a way that would weaken postsecondary market, removing the also permits the Secretary to designate student protections. These commenters, barriers to entry will increase any regulation as one that an entity including several students, expressed competition and some institutions could subject to the regulations may choose to that they supported the regulation as a face a cost associated with losing implement earlier and the conditions for means of both reducing barriers to students to those that offer appealing early implementation. innovation and achieving greater new programs. The Secretary is exercising her responsiveness to workforce needs. The emphasis on flexibility, authority under section 482(c) of the Stating that the Department’s workforce development, and innovative HEA to designate the regulatory changes regulations have not kept up with educational approaches will be to regulations at title 34, parts 600, 602, changing technologies, many beneficial to students. Students, and 668 of the Code of Federal commenters underscored the especially non-traditional students that Regulations included in this document importance of these regulations find the existing competency-based or for early implementation beginning on considering the sudden move to distance education programs to be September 2, 2020, at the discretion of distance education due to COVID–19. appealing for various reasons, can each institution, or each agency, as Several students supporting the rule benefit from flexible pacing and appropriate. The Department will also urged instructors, institutions, different models for assessing progress. implement the regulations as soon as accrediting agencies, or the Federal Additionally, while competency-based possible after the implementation date Government to do more to keep up with models are a relatively new segment of and will publish a separate notice changing technologies, suggesting that the postsecondary market, some announcing the timing of the the lessons learned during the pandemic evidence suggests that the self-pacing implementation. Otherwise, the final would pay dividends in terms of better model and other efforts by institutions regulations included in this document and more responsive academic to accommodate other scheduling are effective July 1, 2021. programs after it is over. Several demands students have, and to Analysis of Comments and Changes commenters said the regulations would recognize knowledge and skills gained reduce administrative burden, elsewhere, may allow students to We developed these regulations complement the changes made in the graduate with lower debt.1 However, it through negotiated rulemaking. Section accreditation final rule,3 and properly is not clear how students will respond, 492 of the HEA requires that, before balance support for innovation with and whether more traditional students publishing any proposed regulations to protections for students and/or will also be attracted to competency implement programs under title IV of taxpayers. based programs as more institutions the HEA, the Secretary must obtain A few commenters also— develop them. public involvement in the development (1) praised the move to a focus on These regulations involve a of the proposed regulations. After competencies and skills, rather than seat significant amount of monetary transfers obtaining advice and recommendations, time; among the Federal Government, the Secretary must conduct a negotiated (2) suggested the regulation would students, and institutions through rulemaking process to develop the have the benefit of reducing costs for increased Pell Grants and Federal proposed regulations. The negotiated students; student loans. The Department assumes rulemaking committee reached (3) acknowledged that distance students in the existing baseline who consensus on the proposed regulations education does not necessarily make a switch from one program to another will that we published on April 2, 2020. The course high- or low-quality but receive similar amounts of Federal aid, Secretary invited comments on the suggested that outdated technology and thus these changes will not have a proposed regulations by May 4, 2020, teaching methods can be to blame for significant budget impact. We estimate and 238 parties submitted comments. lower outcomes; that new students attracted to new An analysis of the comments and of the (4) asserted the rule would protect competency-based or other programs changes in the regulations since students from bad actors, especially developed, in part, because of the clarity publication of the notice of proposed during the pandemic, and noted 2 created by these regulations will have a rulemaking (NPRM) follows. approvingly that even the American Bar net Federal budget impact over the We group major issues according to Association, which is typically resistant 2020–2029 loan cohorts of $[-237] subject, with appropriate sections of the to distance education, has been forced million in outlays in the primary regulations referenced in parentheses. by the pandemic to embrace distance We discuss other substantive issues learning, along with other flexibilities; 1 www.texaspolicy.com/new-study-less-expensive- under the sections of the regulations to and competency-based-education-programs-just-as- good-as-traditional-programs/. 2 85 FR 18638. 3 84 FR 58834.

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(5) suggested more innovative commenters that it is best to allow changes that would weaken protections learning methods could close institutions to better serve students for students. educational disparities and, by utilizing the latest technology and to do Discussion: We appreciate these extension, wealth disparities, which so now, given the challenges many commenters’ suggestion and agree that could lead to more American students and institutions are facing. the final rule should maintain the innovation, including patents and other The Department agrees that the consensus language to the greatest ideas that could benefit humanity. proposed rule appropriately balances extent practicable. The Department is However, one commenter expressed the need for innovation with strong leaving most of the consensus language that while many will see the benefits of protections for students and taxpayers. in the proposed rule unchanged. As distance education after the pandemic is We also agree with the commenter who discussed elsewhere, the Department is over, that commenter cautioned that suggested that some disciplines may making some changes at the request of some programs would not be require at least some in-person commenters, including to permit the use appropriate to conduct fully online and instruction and noted that instructors, of asynchronous clock hours offered that flexibility should remain for institutions, and accrediting agencies through distance education and blended learning along with research to are in the best position to determine subscription-based disbursement for evaluate efficacy. whether distance, blended, or ground- programs not offered through direct Other commenters supported the rule, based instruction is most appropriate. assessment programs. As discussed in generally noting that they— (1) The Department agrees that additional this document, the Department believes appreciated the safeguards to ensure research could help it make even more the benefits of these changes outweigh regular interaction, which would reduce informed decisions in the future. We any risks. However, the Department the need for instructors to assign also agree that veterans, military- believes the final rule will maintain the ‘‘largely pointless work’’ to satisfy the connected students, and many other important protections for students standard; (2) praised the clarity of the students can benefit from CBE programs presented in the NPRM. regulations, particularly the definitions; and that more students will benefit from Changes: None. and (3) suggested the regulations will these programs because of these Comments: Several commenters benefit the education system by regulations. acknowledged that the COVID–19 allowing programs to be more Changes: None. pandemic necessitates some flexibility specifically tailored to each student’s Comments: One commenter praised in the short-term but greater oversight in individual needs. the negotiation process, calling it open, the long-term regarding distance One commenter said the rule would engaging, thorough, and fair, resulting education. expand access to high-quality, in regulations that provide better clarity Discussion: The Department believes, affordable education options to a and protections for students. The as detailed elsewhere, that the broader segment of students and that the commenter stated that the regulations appropriately consider both proposals were generally fair to subcommittee, which made a complete protections for consumers and taxpayers students, incentivized rather than set of recommendations to the main as well as the need for innovation. punished innovation, focused quality committee, engaged in active and While we did not know during assurance on outcomes, simplified informed interaction. rulemaking sessions that a pandemic eligibility requirements, and protected One commenter supported the was in our future, these regulations student and taxpayer investments. Department’s effort to select negotiators address the needs of both institutions One commenter supported the representing diverse perspectives. The and students in response to COVID–19 Department’s effort to realign the roles commenter expressed gratitude for the and serve as additional evidence that and responsibilities of the regulatory significant time and effort negotiators the rulemaking effort resulted in a triad in postsecondary education: The spent on this rulemaking. This needed and meaningful modernization Federal Government, State authorizing commenter and several others also of our prior regulations. The Department agencies, and accrediting agencies. praised the work of the negotiators and also believes that there need not be a Another commenter noted that the Department in reaching consensus. tradeoff between consumer protection institutions have been slow to adopt One commenter supported the and innovation. competency-based education (CBE) consensus agreement and the proposed Changes: None. programs, often due to Federal rule for clarifying and reaffirming the Comments: Several commenters regulations, and further suggested these appropriate role of accrediting agencies supported many of the provisions of the programs could particularly benefit in ensuring the integrity of distance proposed rule while suggesting that the veterans and military-connected education programs. The commenter lack of safeguards generally, or with students and hoped institutions would also asked that the Department not regard to distance education in develop new CBE programs because of include additional provisions that were particular, may have downsides that these regulations. not negotiated. necessitate strong consumer protections Discussion: The Department thanks Discussion: We appreciate the support to protect students and some groups of these commenters for their support for from commenters and agree that one students in particular (including these regulations, including the greater benefit of these regulations is to ensure veterans and military-connected clarity provided in a number of clarity of the role of accrediting agencies students, low-income students, students definitions. We appreciate hearing from in matters related to distance education. of color, and those lacking academic student commenters who shared their We note that the Administrative preparation). perspectives, especially as they relate to Procedure Act (APA) does not permit us Additionally, several commenters the impact of the COVID–19 pandemic to include additional provisions that suggested that proprietary institutions on their educational experience, and we were not subject to the rulemaking would be especially likely to treat appreciate their efforts to embrace effort. students unfairly. innovation, and the optimism they Changes: None. Discussion: The Department agrees expressed that these regulations will Comments: Many commenters urged that students should select programs help them and students to follow. The the Department to maintain consensus that align well with their prior academic Department agrees with many language in the final rule and not make preparation, their learning style, and

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their lifestyle. Additionally, we believe Changes: None. same commenter added that the that all educational programs must Department reneged on its historic General Opposition continue to have proper oversight by the consensus and changed the final Department, States, and accrediting Comments: Several commenters regulations without sufficient factual agencies. While protections for all expressed opposition to the final justification. The commenter stated that students are important, the benefits of a regulations because of concerns over the Department relied on ‘‘little more program should not be denied to some whether they would weaken existing than anecdotes, industry proposals, and students simply because the program is regulatory requirements on distance ideology’’ in its original proposals. The not the right choice for others. The education programs. Other commenters commenter also added that the Distance Department notes that the growth of opposed the final regulations because Education subcommittee should have adaptive learning and artificial they worried about the potential more fully included student and intelligence tools in recent years have negative impacts on colleges, taxpayer voices and interests and that allowed institutions to provide more universities, and the learning the Department failed to follow its own personalized academic supports, at environments of all students. One of agreed to protocols by not providing a scale, that may be even better than what these commenters suggested that the preamble to members to review and would be available in a traditional cumulative effect of the proposed rule comment on prior to publication. classroom, particularly in traditional would allow for drastic and unnecessary Similarly, a different commenter large lecture courses. These changes in the name of efficiency and remarked that student veterans were not technologies may facilitate more regular innovation, while sacrificing students’ sufficiently represented, and more and effective faculty-student interaction learning and protection in the process, similar individuals should have been than a traditional classroom format leading to further damage to students added to the negotiating committees. enables. and taxpayers. Many of these Another commenter argued that the The Department believes the commenters expressed similar concerns livestreaming was not open to the enforcement of provisions protecting that the proposed changes would expose public and that the consensus vote on students is vital and should occur students and taxpayer-funded Federal the regulations could not be considered without regard to the tax status of the aid dollars to undue risk. either valid or indicative of general institution in question unless Congress Discussion: We thank the commenters support from any of the communities directs the Department otherwise. The for expressing their concerns, and we around the negotiation table. Further, Department takes all allegations of harm have considered their objections. We do the commenter stated that the data to students seriously and does not not share their apprehension about the provided to the negotiators was condone improper conduct by any type predicted consequences of these final disjointed and insufficient and that the of institution whether public, private regulations. In fact, we believe that this Department should incorporate non-profit, or proprietary. final rule properly balances the need to additional reporting requirements for Changes: None. protect student interests and guard distance education purposes, Comments: One commenter urged the taxpayer dollars, while also providing specifically reporting about the distance Department to avoid provisions that innovators the tools to deliver high- education status of students who take would create unintended consequences quality, distance education for students Federal loans. for osteopathic clinical education in the 21st century. We do not believe A group of commenters objected to programs, including students these goals must necessarily come at the the rulemaking process, stating that the completing out-of-State clinical expense of one another. Department appointed negotiators who rotations. The commenter further Changes: None. appeared to have been selected, not for requested that the Department avoid Comments: Some commenters stated their subject-matter expertise, but for new financial and administrative that the Department should rescind the their ties to the for-profit college burdens during the COVID–19 proposed regulations and redraft new industry. pandemic. regulations that protect educational Discussion: As we stated in the final Discussion: The Department quality, the interests of students and regulations on student assistance considered clinical education programs taxpayers, and the general higher general provisions, the Secretary’s in this rulemaking as well as the education community. recognition of accrediting agencies, and accreditation rulemaking, which Another commenter agreed that the the Secretary’s recognition procedures covered issues related to State proposed regulations should be for State agencies published on authorization of distance education and rescinded, in part, because the November 1, 2019, we disagree with the are effective July 1, 2020. These distance Department did not conduct reasoned commenters who said that the education and innovation regulations rulemaking as required by the APA. Department’s rulemaking process was become effective July 1, 2021, allowing This commenter suggested that some flawed.4 It is not uncommon for the institutions and others adequate time to negotiators did not understand the rules Department to address multiple topics plan for their implementation. Early and that the Department ‘‘stacked the with a single negotiated rulemaking implementation is optional. We do not deck’’ with an unmanageable agenda, committee, nor was this the first time anticipate that these regulations will created negotiating committees stacked that the Department utilized non-voting create unique burdens on osteopathic heavily in favor of industry, and starved subcommittees to delve into a specific clinical education programs, which may the committee of any real data or topic and provide recommendations to elect to not integrate or expand distance information to inform the rulemaking. the main committee. The learning opportunities within those Further, the commenter stated that the subcommittee’s recommendations were programs. The Department sought to Department ‘‘bullied’’ negotiators who not binding on the members of the main reduce financial and regulatory burden ‘‘dared to oppose the Department’s committee, who were free to discuss the overall during this rulemaking. The proposals and threatened others with issues in as much detail as they required Regulatory Impact Analysis and promises of worse regulations if they to come to a consensus agreement. The Paperwork Reduction Act sections of refused to accede.’’ The commenter Department notes that we added an this final rule contain additional concluded that the result was an information about cost and burden. ‘‘illegitimate’’ vote of consensus. The 4 See: 84 FR 58836.

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additional negotiator, and an additional negotiators because the information was notwithstanding these distance negotiating session at the request of not available, but we do not believe the education regulations.6 negotiators, to represent all relevant absence of those data prevented The Department acknowledges the constituencies and in hope of reaching negotiators from considering reasoned commenter’s reference to litigation consensus. proposals. against online education providers, but The Department disagrees with the We appreciate the commenter’s those legal actions do not direct the commenter that our efforts to achieve proposal to add reporting requirements Department’s regulatory work. We also consensus were inappropriate. Contrary to the final regulations, but we do not acknowledge the arguments against to the commenter’s assertions, the adopt their proposal. The Department is distance education, but the Department Department compromised countless comfortable with the current regime of does not advocate for one type of times, moved away from its initial reporting requirements for distance education delivery system over any proposals, and accepted negotiators’ education and does not wish to create other. The Department supports request for substantially more time to new burden on institutions that rely on education innovation that is rigorous, negotiate. or integrate distance education meets students’ needs, and assists Regarding the makeup of the technology in their education programs. students in achieving their educational subcommittee, the process of negotiated We acknowledge that there were goals. These final regulations assist in rulemaking ensures that we consider a temporary connectivity issues with the removing unnecessary barriers to that broad range of interests in the livestreaming of the distance education innovation, while also assuring that development of regulations. subcommittee. While we regret the online programs remain academically Specifically, negotiated rulemaking is interruption, the Department worked rigorous, well-planned, and appropriate. designed to enhance the rulemaking quickly to restore the connection to Changes: None. process through the involvement of all ensure that interested parties could Comments: One commenter remarked parties significantly affected by the view the discussion. The sessions were that the Department has led taxpayers to topics for which we will develop the also recorded and can be viewed on the believe that changes to the distance regulations. Department’s YouTube channel.5 The education regulations will allow Accordingly, section 492(b)(1) of the proceedings of the main committee can students to ‘‘fast-track their education HEA, 20 U.S.C. 1098a(b)(1), requires be viewed at edstream.ed.gov. and save money’’ and that the taxpayer that the Department choose negotiators We based the proposed regulatory will eventually pay the bill. The from groups representing many different changes on many factors, including commenter also wrote that CBE and constituencies. The Department selected public feedback, research outlined in individuals with demonstrated expertise career technology training is the ‘‘adult greater detail in the NPRM, and version of Common Core.’’ or experience in the relevant subjects emerging trends in postsecondary under negotiation, reflecting the Another commenter stated the education. Specifically, the Department proposed regulations are intended to diversity of higher education interests developed a list of proposed regulatory and stakeholder groups, large and small, create tax breaks and ease burdens on provisions based on advice and wealthy taxpayers. national, State, and local. In addition, recommendations submitted by the Department selected negotiators Discussion: The Department is individuals and organizations as confused by the commenter who with the goal of providing adequate testimony in a series of three public representation for the affected parties suggested that the intended purpose of hearings in September of 2018, as well the final rule was to create tax breaks while keeping the size of the committee as written comments submitted directly manageable. At the request of and ease the burden on wealthy to the Department. taxpayers. The Department is not negotiators, the Department agreed to Changes: None. empowered to create tax breaks. add a representative of State Higher Comments: One commenter provided Education Executive Officers on the statistics showing the types of We are similarly confused by the main committee. In addition, a institutions that are active in the online commenter who stated that CBE and representative of the New York Attorney education industry and on the growing career technology training is the ‘‘adult General was added as a member to the expansion of online education. This version of Common Core.’’ The subcommittee. commenter concluded that growth has Department is not attempting to dictate Students and consumer protection not correlated with increased access to academic content or establish national advocates were represented by non- minority and non-traditional students or content standards, so we are unclear on Federal negotiators on the full more quality programs. The commenter any similarity to a set of elementary and committee and the subcommittee— also referenced lawsuits against online secondary English language arts and student veterans were well-represented education providers and outlined mathematics standards. While some on the full committee—with primary arguments against distance education. students may be able to complete their and alternate representatives for each of Discussion: We appreciate the program more quickly, the Department these constituencies. Moreover, the information provided by the disagrees that this will result in some Department conducted three public commenter, as well as the outline of the sort of ‘‘balance’’ that must be covered hearings before the negotiated arguments against distance education. by taxpayers. The Department also rulemaking began and provided time for We note, however, that institutions from never stated that the final rule would public comment on each of the 12 days all sectors-regardless of whether they allow students to ‘‘fast-track’’ their that the main committee convened. provide online or in-person classroom education. We believe that students We disagree with the commenters instruction-have been the subject of should be able to access educational who stated that the Department failed to lawsuits and borrower defense claims. services that are appropriate to their provide data or evidence, or stated that We reaffirm that legal action and the needs, provide them with high-quality the data was disjointed or insufficient, borrower defense process remain training and education, and meet the to support the need for the proposed available to all students, requirements of the HEA, as amended. regulatory changes during negotiated Changes: None. rulemaking. The Department was unable 5 U.S. Department of Education YouTube page, to fulfill several data requests made by www.youtube.com/user/usedgov/videos. 6 84 FR 49788.

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Comments: One commenter stated consensus language reflects that of their online programs, engage in pay- that any weakening of the protections concern. The Department notes that it is to-play admissions schemes, engage in included in the consensus language not within our regulatory authority to predatory advertisement or enrollment would present a serious risk to all roll back legislative protections; our activities, or fraudulently misrepresent students, especially Latino students, regulations—and these final regulations their educational programs—and likely who, according to the commenter, are specifically—must fall within the student outcomes. We will take overrepresented at institutions that, on parameters authorized by statute. necessary actions to hold institutions average, produce worse outcomes for We disagree with commenter’s accountable, regardless of their tax students. Another commenter similarly suggestion that the final regulations status or organizational structure. remarked that non-traditional students jeopardize opportunities to access The Department appreciates the would be negatively impacted by the higher education. This final rule commenters concerns and addresses the final regulations. promotes more high-quality, distance point regarding the use of recycled or Discussion: We appreciate the education opportunities for students pre-recorded lectures in the appropriate commenters’ submissions and share who are not otherwise capable of sections below. However, we note that their desire for all students—men, attending traditional classroom-based such a concern is not limited to distance women, minorities, under-represented courses. In fact, much of our work is learning modalities. populations, and non-traditional animated by the desire to expand Changes: None. populations—to have access to high- opportunities through education for Comments: Many commenters asked quality education services. economic mobility and advancement. the Department to rescind the proposed The Department rejects the notion The Department takes its rule or, alternatively, delay its that student protections are weakened responsibility to administer the title IV implementation, to maintain existing in the proposed rule or that any such programs seriously and strenuously rules protecting the role of faculty and weakening disproportionately impacts seeks to guard taxpayers’ dollars in the student interaction and restricting one student population over another. As operation of those programs. We outsourcing. This would allow Congress we stated in the Program Integrity: disagree with the commenters’ and the public to better assess the needs Gainful Employment final regulations, suggestions otherwise. of students and institutions. One of the Department believes that more must Finally, legislators have the ability to these commenters wrote that the be done to improve outcomes for high- further clarify their intent through Department has a responsibility to avoid risk students, and more options must be future legislative action. We look making changes to distance education made available to students for whom forward to working with Congress on that would open the door to instruction college—and, especially, the traditional any such actions to promote educational without interaction between students college experience—is not the best or opportunities for all students. and faculty, leaving students entirely preferred option.7 We believe that high- Changes: None. reliant on software, apps, games, and quality distance education programs, Comments: One commenter wrote prerecorded video. This commenter also like the ones envisioned by the that the intent of the final regulations is wrote that the proposed rules would members of the subcommittee, can and to loosen the restrictions on institutions ‘‘undermine meaningful instruction by do meet students’ unique needs and offering distance learning. The replacing it with standardized exams.’’ expand educational opportunities to commenter stated that allowing schools The commenter concluded that further students previously underserved. to have more latitude over certain rules deregulation in the distance education Changes: None. leaves room for schools to cut corners to environment did not make sense and Comments: A group of commenters save money at the expense of quality. that it would be dangerous to students stated that the Department is attempting The commenter added that the and faculty who are trying to design to use its deregulatory agenda to Department’s contention that the high-quality programs to weaken the override congressional intent to ensure reduction in regulation will increase the consensus language by expanding CBE program quality and to protect students, number of programs offered by programs. taxpayers, and the integrity of the institutions is exactly what predatory, Discussion: The Department disagrees Federal financial aid programs. The for-profit, and fraudulent institutions with the commenter’s suggestion. We commenters also suggest that the want and that it will inevitably make it see no compelling reason, nor has one Department abused its rulemaking easier for such institutions to access been provided through the public authority by rolling back legislative financial aid funds at the cost of the comment process, to rescind or delay protections that guard the integrity of students and taxpayers. Finally, the the final regulations. We also note that the student financial aid system. The commenter said that loosening reauthorization of the HEA is many commenters argued that the restrictions would allow a school to years overdue, and statute currently Department’s actions further jeopardize recycle pre-recorded lectures, give the references technologies that are sorely students’ opportunities to access a student a test, and issue unwarranted outdated. Therefore, we cannot rely higher education system that promotes degrees if the student passes. The solely on Congress to respond to the economic mobility. Finally, the commenter was concerned that such an need for higher education to adapt and commenters concluded that the outcome would greatly impact evolve to serve the needs of students. Department’s agenda is proof of its instructors’ financial well-being and the While we understand that some may intent to disregard its obligation to quality of the workforce. oppose the growth of distance responsibly administer Federal Student Discussion: The intent of the final education, largely because of concerns Aid (FSA) programs. regulations is not to loosen restrictions about what this means to the job Discussion: The Department thanks on any type of institution. The prospects of current and future the commenters for their submission. Department will continue to hold all educators, those concerns are We share their concern for protecting education providers accountable. The misplaced. The role of the instructor is students, taxpayers, and the integrity of Department does not condone the critical in high-quality distance Federal financial aid programs. The behavior of those who wrongfully cut education, as explained in the corners to save money, take advantage appropriate section below, and these 7 84 FR 31433. of students, misrepresent the selectivity regulations reaffirm the importance of

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regular and substantive interaction as a remarked upon the expanded development of much of the language key element that distinguishes between prevalence of distance education. reflected in the proposed regulations. distance learning and correspondence One commenter suggested that the In addition, the 30-day public education. proposed rule should be deliberated and comment period was necessary to allow We do not agree that the proposed commented on after the pandemic is us to meet the HEA’s master calendar rule would undermine meaningful over because the ‘‘last thing on requirements. Under those instruction by replacing it with American’s [sic] minds’’ is the requirements, the Department must standardized exams and are confident accreditation of online schools. publish final regulations by November that these final regulations do the Many commenters concluded that a 1, 2020, for them to be effective on July opposite. 30-day comment period during a 1, 2021. Delaying the effective date of Changes: None. pandemic was not sufficient to these regulations would unnecessarily Comments: One commenter suggested thoroughly review the proposed rules. delay the realization of the benefits that the Department should only allow These commenters requested that the associated with these changes. some types of programs to offer distance Department delay the implementation of Changes: None. education courses. The commenter the proposed rules. A group of commenters stated that, at Correspondence Courses: Definition and advocated for a rigid classification, this pivotal moment and informed by Limitations (§§ 600.2 and 600.7) reviewed by the Department, of subject institutions’ experiences during the Comments: Two commenters matter areas that would be eligible for pandemic, any weakening of strong expressed support for the proposed remote classes. The commenter stated protections for students and taxpayers definition of the term ‘‘correspondence that the basis for such a proposal is that would open the door for predatory course.’’ One of those commenters some careers, such as nursing and actors to repeat past abuses, putting the specifically supported the elimination teaching, require real world experiences most vulnerable students at even greater of the reference to self-pacing in the and that the value that professors bring risk. previous definition of ‘‘correspondence to their students is not the same in an One commenter stated that the course’’ and indicated that the proposed online program. Department cannot, in good faith, move definition makes it clearer that self- Discussion: The Department thanks forward with any of the issues in the paced programs are not necessarily the commenter for this proposal, but we final regulations without first grappling correspondence programs. One do not adopt this change. While we with the massive changes that the commenter also expressed support for recognize that the experiences of online COVID–19 crisis will bring to online the clarification regarding the definition learning and traditional classroom education. of a ‘‘correspondence student’’ in learning can be very different, the A group of commenters proposed that proposed § 600.7(b)(2), indicating that Department believes that high-quality the Department reopen the rulemaking the specificity in the new definition learning is possible in both process or postpone the enactment of would support new and innovative environments. We do not wish to the final regulations to allow for academic models. forestall students interested in nursing additional comments. Many of these Discussion: The Department thanks and teaching to be kept out of those commenters noted potential difficulty in the commenters for their support. fields because they are not able to attend responding to the NPRM because of Changes: None. traditional, in-person classes. In many COVID–19. One commenter suggested Comments: Several commenters instances, distance learning that military and veterans’ communities opposed the Department’s proposed opportunities are limited to students should be allotted extra time to provide changes to the definition of who are already working in fields such comments. Another commenter noted ‘‘correspondence course,’’ arguing that as teaching or nursing, and who do not the need for the Department to put the the changes would make the distinction need additional hands-on experiences. needs of our nation’s college students between distance education and In many instances, distance learning before the needs of ‘‘distance education correspondence courses less clear. enables practicing professionals to opportunists.’’ These commenters stressed the complete post-graduate certificates or Discussion: While we acknowledge importance of maintaining that graduate degrees. Moreover, for many that the NPRM may not have been top- distinction given the more limited occupations, accrediting agencies and of-mind for most Americans during the amount of support by qualified State licensing boards restrict the use of COVID–19 pandemic, the Department is instructors in correspondence courses distance learning within certain confident that the 30-day public and past abuses associated with programs. comment period was an adequate time correspondence study. Another As we have seen during the COVID– period for interested parties to submit commenter indicated that the existing 19 pandemic, some accrediting agencies comments. Because we reached definition of ‘‘correspondence course’’ and State licensing boards are beginning consensus during negotiated already adequately distinguished to recognize the opportunities presented rulemaking, the proposed regulatory correspondence education from distance by distance learning and are permitting language was available to the public at education and did not need to be certain portions of programs to be the conclusion of the final negotiating changed. provided through distance modalities. session approximately one full year Discussion: We agree with the We will continue to rely on accrediting before the comment period began, commenter about the importance of agencies and State licensing boards to which afforded interested parties support by qualified instructors, determine when and if distance learning additional time to begin formulating especially given the emphasis of that opportunities meet the education and their comments. concept in the statutory definition of training needs of students in particular Prior to issuing the proposed ‘‘distance education,’’ which requires fields. regulations, the Department conducted ‘‘regular and substantive interaction’’ Changes: None. three public hearings and four between students and instructors. We Comments: Many commenters negotiated rulemaking sessions, where also agree that it is important for the referenced COVID–19 in their stakeholders and members of the public regulatory definitions of distance submissions to the Department and had an opportunity to weigh in on the education and correspondence courses

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to be sufficiently distinct, both to in correspondence study—would receiving feedback from technology- implement the statutory distinction remain unchanged. mediated instruction. Computer-assisted between the terms and to ensure that Changes: None. instruction would also include institutions are able to design programs Definition of Academic Engagement instruction through virtual or in a way that maintains compliance and (§ 600.2) augmented reality, or any other form of avoids audit or program review findings instruction in which a student actively with respect to their online programs. Comments: Many commenters participates in a computer-based or However, we disagree that the proposed supported the Department’s proposed computer-mediated learning changes will blur the distinction definition of ‘‘academic engagement.’’ environment, with or without the between the two terms. Several commenters noted that by presence of a human instructor. An The most significant change made to moving key concepts on attendance and explicit goal of this rulemaking has been the definition of ‘‘correspondence academic activities from the Return of to reduce the need for updates to course’’ in these regulations is the title IV funds (R2T4) regulations (under regulation when new technologies are removal of the concept of self-pacing, § 668.22) to a new definition of developed, and so this definition is also which is not vital to the distinction ‘‘academic engagement’’ in § 600.2, the inclusive of technologies that are in between correspondence courses and Department emphasizes the importance their infancy or not yet invented as long distance education. The HEA also does of active student participation in other as they meet the regulation’s other not mention the concept of self-pacing, parts of the regulations. One commenter requirements. Therefore, because the nor does it express that such a condition also noted that the definition would types of learning described by the would require a course to be treated as expand academic quality and commenters (and others) are already offered through correspondence accountability. Two commenters accommodated in the proposed education rather than through distance specifically stressed their support of the definition of ‘‘academic engagement,’’ education. We believe that the aspects Department’s acknowledgement within we do not believe it is necessary to add of the definition of ‘‘correspondence the definition that student academic additional categories. course’’ that have been maintained in engagement can take on different forms, Changes: None. the definition—for example, that including interactive online courses and Comments: One commenter expressed interaction in such a course is limited, computer instruction. concern that the proposed definition of not regular and substantive, and Two commenters specifically ‘‘academic engagement’’ would require primarily initiated by the student—are expressed support for the Department’s more than simply actively logging into more than adequate to preserve the inclusion of § 600.2(2)(iv), a website. The commenter indicated important regulatory distinction ‘‘Participating in an interactive tutorial, that this could cause undue burden for between distance education and webinar, or other interactive computer- students who were unable to correspondence courses. assisted instruction,’’ in the definition. academically engage during normal Changes: None. The commenters indicated that they hours or afford the technologies Comments: One commenter objected believe this inclusion will help clarify required by institutions to demonstrate to the proposed definition of the role adaptive learning and other academic engagement as defined. ‘‘correspondence student’’ under technologies can play in providing Another commenter voiced a concern proposed § 600.7(b)(2), asserting that the academic engagement. that paragraph (3)(iv) of the proposed definition weakens the distinction Discussion: The Department thanks definition, which states that academic between distance education and the commenters for their support. engagement does not include correspondence courses and could Changes: None. participating in academic counseling or result in a larger number of participating Comments: Several commenters advisement, could discourage institutions and students engaging in requested that the Department include instructors from taking the time to speak correspondence study. new categories of activities under the with students about their academic Discussion: We disagree that the definition of ‘‘academic engagement.’’ future or professional goals. The proposed changes to § 600.7(b)(2) will Two commenters asked that the commenter mentioned that depending weaken the distinction between Department add a category for education on the nature of the course, it may be distance education and correspondence offered through virtual and augmented difficult at times for instructors to courses or result in a greater number of reality because those modalities are differentiate between interacting with institutions or students engaging in becoming more commonly used in students about ‘‘academic matters,’’ correspondence study. The only impact higher education. which qualify as academic engagement, of the changes is to clarify how to One commenter suggested that the and ‘‘academic counseling and calculate the number of correspondence Department include as a category under advisement,’’ which does not qualify. students for the purpose of determining ‘‘academic engagement’’ instruction The commenter requested that the whether an institution has exceeded the through computer-mediated adaptive Department remove the exclusion of statutory limitation on the number of instruction that alters the learning academic counseling or advisement correspondence students that may be experience for each student based on from the definition of academic enrolled at an eligible institution during that student’s needs. Another engagement. an award year. The other relevant commenter requested that the Discussion: We disagree that the statutory and regulatory restrictions on Department clarify that instructor definition of ‘‘academic engagement’’ correspondence study that discourage interaction does not have to occur causes undue burden for students. Many institutions from offering exclusively with a human instructor. institutions previously believed that, correspondence programs—for example, Discussion: As the Department under the Department’s prior the institutional eligibility limitations, discussed in the preamble to the NPRM regulations, students were required to the restriction to half-time enrollment (85 FR 18638–18702), we consider not only log in, but engage in an activity status for purposes of calculating Pell ‘‘other interactive computer-assisted weekly for which the institution Grant disbursement amounts, and the instruction’’ to include the use of maintains documentation to prove that limitations on the components of cost of artificial intelligence or other adaptive the student was engaged every couple of attendance for students enrolled solely learning tools where the student is days. This was identified as a

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burdensome requirement that regarding asynchronous academic Definition of Additional Location significantly exceeds requirements for engagement. The commenters indicated (§ 600.2) ground-based instruction, and that often that while the Department specifically Comments: One commenter requested requires students enrolled in distance mentions synchronous instruction in clarification about the addition of a education to make time for what is the definition, it does not mention definition of ‘‘additional location.’’ otherwise viewed as ‘‘busy work.’’ The asynchronous instruction even though Discussion: We did not seek comment new regulation clarifies that engagement asynchronous instruction is referenced on the ‘‘additional location’’ definition must be meaningful in order to be used elsewhere, both in the ‘‘distance in the NPRM that we address in this as the basis for complying with the education’’ definition in § 600.2 and as final rule. Instead, we sought comments Department’s related requirements (such part of the new ‘‘week of instruction’’ on that definition in an NPRM as identifying a student’s withdrawal definition in § 668.3. One commenter published in the Federal Register on date), but does not require, for example, specifically suggested including ‘‘or June 12, 2019 (84 FR 27404). That students to post a non-substantive blog asynchronous’’ after ‘‘synchronous’’ in NPRM included Accreditation-related post each week simply to ‘‘check the paragraph (2)(i) of the definition to definitions, including the definition of box’’ on documenting participation. The definition does not require a clarify that asynchronous attendance ‘‘additional location.’’ We published a student to log in or participate in a and participation in the classroom is final rule that included the definition of course or learning environment at a included when documenting academic ‘‘additional location’’ in the Federal particular time, nor does it require or engagement in an online program. Register on November 1, 2019 (84 FR incentivize institutions to demand the Another commenter asserted that 58834) in which we addressed use of expensive technologies to though certain asynchronous activities, comments we received related to the demonstrate academic engagement. The such as engagement in interactive forms definition. definition does rely on the concept of of computer-assisted instruction, might Changes: None. active participation by a student in his be read into the listed activities in Definition of a Clock Hour (§ 600.2) or her learning, which the Department paragraph (2)(iv) of the definition, the Comments: Numerous commenters believes is a necessary requirement for omission of a direct reference to voiced disagreement with the provisions academic engagement. This concept of asynchronous instruction makes it in the Department’s proposed definition active participation—which cannot be difficult to have confidence in such an of the term ‘‘clock hour’’ that require demonstrated merely by documenting interpretation. that a student has logged into an online each clock hour in a distance education Discussion: The Department’s intent system—is also vital to other regulatory program to include synchronous was not to exclude asynchronous requirements, including for purposes of instruction where students have an determining a student’s withdrawal date participation in learning activities from opportunity to interact with instructors under the R2T4 regulations. the definition of academic engagement. and asked the Department to reconsider For similar reasons, we also decline to Asynchronous academic engagement this requirement. remove the exclusion of academic could occur under any of the categories Several commenters indicated that the counseling and advisement from the described in the definition except for proposed clock hour definition definition of ‘‘academic engagement.’’ the category described under paragraph regarding distance education was too While the Department views advisory (2)(i) that describes attendance at a restrictive and should conform to the activities related to a student’s academic synchronous lecture, recitation, or field Department’s definition of ‘‘distance or career trajectory as an important or laboratory activity. For example, a education,’’ which allows for ‘‘regular component of many postsecondary student can work on an academic and substantive interaction between the programs, such advising by itself does assignment—described under paragraph students and the instructor or not demonstrate that a student is (2)(ii) of the definition—at the time of instructors, either synchronously or participating or engaged in his or her his or her choosing, and submission of asynchronously.’’ The commenters academic program. Negotiators agreed that assignment is an asynchronous asked the Department to reconsider that to the extent a qualified instructor learning activity that does not require whether clock hours could be earned is providing advising relevant to a real-time interaction with an instructor. through asynchronous instruction, specific course—for example, Similarly, a student could demonstrate noting that several educational explaining where a student can find academic engagement under paragraph platforms are already capable of answers to content-related questions, or (2)(iv), ‘‘participating in an interactive monitoring a student’s participation and recommending a particular approach to tutorial, webinar, or other interactive clocking the student out if active a writing assignment for the course— computer-assisted instruction,’’ by engagement ceases. academic engagement is taking place. engaging in a presentation through a One commenter noted the However, general academic or technical virtual or augmented reality system or Department’s reluctance to support asynchronous distance education (ADE) advising that is provided outside of a by participating in an online learning instruction within the clock hour specific course, and that is often activity that uses artificial intelligence definition was most likely due to the provided by someone who does not or adaptive learning. We do not believe concern as to whether a clock hour qualify as an instructor for the course in that it is necessary to add the word student’s required ‘‘seat time’’—50 which the student must be academically ‘‘asynchronous’’ to the definition given engaged—for example, guidance minutes in a 60-minute period—could the incorporation of this concept in each be validated. The commenter indicated regarding which classes the student of these activities. We also decline to plans to take in the future, or technical that current technology already provides remove the word ‘‘synchronous’’ from effective tools which, if properly support with instructional technology— paragraph (2)(i), since in that context it does not constitute academic incorporated into an asynchronous is used to describe a particular type of engagement. distance education platform, marry Changes: None. learning activity that is performed in effective program instruction with Comments: Several commenters asked real time with an instructor. effective ‘‘seat time’’ validation. As the Department to clarify its position Changes: None. explained by the commenter, an

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electronic synchronous distance provides systems that monitor monitoring a student’s attendance in 50 education platform would include such participation, proctor exams, verify out of 60 minutes for each clock hour. components as sign-in assurance, time attendance and provide tools for Specifically, the commenters requested monitoring through trackable digital students to interact with instructors at that the Department clarify that the new media assets, automated sign-off for the time and place of their choosing. clock hour definition not require an inactivity, live student to student and The commenters further explained that institution to have live instructor student to instructor activities and online content is most often used to involvement with a student each hour, automated Q & A, and testing processes. supplement in-person training or lab so long as the institution can monitor a Based on this information, the work and that asynchronous instruction student’s participation during 50 commenter requested that the can now be monitored by a school minutes of each hour and the institution Department modify its proposed through many educational platforms, can otherwise demonstrate academic definition of a ‘‘clock hour’’ to permit students can be clocked out for engagement (per the Department’s instruction provided via electronic inactivity, and instructors and students definition) by utilizing suitable synchronous distance education. have a variety of ways to interact with technology as demonstrated to the One commenter stressed that each other and review various course appropriate State and accrediting permitting the development of materials. Many commenters expressed agency. The commenters stressed that asynchronous instruction in clock hour a belief that current technology requiring ‘‘face-to-face’’ contact each programs allows for the kind of available to students and educators hour or at least one live touch by an instructional flexibility needed for allow for the same objectives to be met instructor per clock hour for career and technical education in an asynchronous format, while synchronous or asynchronous providers to use new methods of allowing for more flexibility to instruction would ignore the direction simulated, technology-mediated overcome challenges related to that the Department’s Proposed Rule is instruction without constraint or fear of geography, learning preferences, work heading to expand recognition of the compliance findings. or family obligations, disabilities, or capabilities of technological advances to Several commenters voiced a strong resources. One commenter suggested monitor student academic engagement desire to afford the same flexibilities to asynchronous learning could include and impose an undue hardship on students enrolled in clock hour distance the recording of classes to be viewed students who need maximum education courses as students enrolled within a specified time with periodic scheduling flexibility in completing in credit hour distance education class meetings to answer questions. clock hours by means of distance programs. To that end, one commenter Several commenters urged the education. indicated that program structure (clock Department to allow asynchronous One commenter objected to the hours or credit hours) is often based on instruction via distance education if proposed clock hour definition and institutional or State governance and approved by State and accrediting suggested the definition be reworded to has no relationship to the quality or agencies as long as an institution could account for students who may have content of a program. The commenters clearly demonstrate instructor relocated to a different time zone from asserted that students enrolled in clock engagement with the student during their institution, and therefore might not hour programs should not be penalized each clock hour through a variety of be able to attend a class session in real merely due to institutional structure. means, which could include technology time or interact with the instructor Another commenter stated that such as adaptive learning and artificial during the normal period of attendance. limiting clock hour distance education intelligence. The commenter indicated that they coursework to synchronous online Two commenters indicated that the currently attend a class in a different classes would limit the convenience and synchronous format described in the time zone and often have to watch flexibility to students of access to course proposed definition is too limiting and recordings of the class and do not want content at any time or place. Several would not be broad enough to allow these types of situations to be excluded commenters expressed concerns that students to engage in certain types of from being counted towards a student’s limiting distance education clock hour projects or assignments such as academic progress. eligibility to synchronous activities reviewing written or recorded lectures One commenter requested that the could limit innovation and discourage outside of regular classroom hours. Department clarify if it indeed intended institutions from creating more flexible Another commenter stated that the to limit distance education clock-hour and accessible learning experiences critical variable is not coordinated eligibility to only synchronous learning which could reduce potential barriers to schedules or designated time, but a experiences but instead grant more access and completion of postsecondary learning environment with diverse and flexibility to correspondence courses. programs and promote a more diverse engaging learning activities and faculty The commenter was concerned that, student population. involvement. given the limitations on correspondence Several commenters stressed that the Two commenters supported the students and courses applied to Department authorizes postsecondary inclusion of distance education into the correspondence education, institutions institutions to offer eligible Department’s clock hour definition, would prefer to designate courses as postsecondary programs in a distance arguing that distance learning distance education rather than learning format as approved by the technology has sufficiently advanced to correspondence whenever appropriate. institution’s accrediting agency and that permit institutions to conduct remotely One commenter urged the Department the exact same standards, quality synchronous instruction with students to extend the temporary flexibilities for assurance, integrity and accountability and to monitor the exact amount of time online instruction for clock hour measures used to approve traditional that students spend participating in programs due to the current coronavirus on-campus programs are also applied to these learning sessions. However, the crisis as outlined in the Department’s the distance education programs commenters urged the Department to guidance for COVID–19. The commenter approved by the accrediting bodies. provide more clarification and greater noted that the Department’s temporary Several more commenters indicated flexibility under paragraph (3) of the flexibility allows schools to offer that current technology in higher clock hour definition which states that synchronous or asynchronous online education attendance monitoring an institution must be capable of clock hour programs as long as the

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school can demonstrate student prescribed times. This flexibility can interactive tutorial or webinar online or academic engagement through various also greatly benefit students with health a learning activity involving adaptive online learning platforms and systems concerns for whom participation is learning or artificial intelligence—and or based on school data or the contingent upon treatment schedules the institution has technological instructor’s own knowledge. The and feeling well enough to perform resources and policies and procedures commenter indicated that extending required tasks. The individual pacing that are sufficient to monitor and these flexibilities would allow made possible by asynchronous learning document the time each student spends institutions to determine on a local basis allows for a more tailored educational performing that activity. If either of how to transition back to on-ground experience that promotes mastery of these conditions are not met, an education and clarify that clock hour subject matter over attendance in institution would not be permitted to schools are permitted to offer hybrid scheduled activities. Moreover, the include time spent on an online activity programs—partially on-ground and availability of asynchronous learning toward completion of a clock hour for partially online—through this period to allows for mixed model learning purposes of the title IV, HEA programs. provide maximum flexibility to meet the reflective of non-title IV eligible We also agree with the commenters health and safety needs of employees programming with theory learned who argued that clock hours offered and students. asynchronously and specific practical asynchronously should involve Several commenters specifically tasks through synchronous instruction. academic engagement, as defined requested that the Department modify The Department does not wish to elsewhere in these regulations, since paragraph (1)(iv) of the proposed clock impede technological innovations at that concept involves active hour definition to include both institutions that can help students participation in learning activities rather attendance in a synchronous or overcome barriers to access and than passive consumption of knowledge asynchronous class for distance completion. or merely logging into an online system. education coursework, while one The existence of the ‘‘regular and An institution should establish, in commenter asked the Department to substantive interaction’’ requirement accordance with its policies and those include ‘‘participation through related to clock hours offered through of its accrediting agency or State, what asynchronous academic engagement’’ or distance education and the requirement it considers to be academic engagement similar language to the distance that clock hours meet the requirements in a clock hour program in order to education eligibility criteria in of an institution’s accrediting agency clearly demonstrate that students have paragraph (1)(iv) of the clock hour and State provide the safeguards that spent the recorded time performing an definition. ensure that students have access to activity. In addition, several commenters asked quality instruction and instructor Institutions are permitted to offer the Department to consider modifying support. Given these baseline clock hour programs both through paragraph (1)(iv) to read, ‘‘In distance requirements, it is not necessary to correspondence or distance education, education, 50 to 60 minutes in a 60- require students to interact with and the Department declines to opine minute period of attendance in a instructors synchronously to earn clock on which type of program is most ‘computer-assisted’ class, lecture, or hours. appropriate or best suited to the needs recitation where there is opportunity for We also believe that commenters have of individual students. However, direct interaction between the instructor made a strong case that, given current institutions offering clock hour and students’’, while other commenters technology, clock hours completed programs using distance education simply requested that the word asynchronously can be adequately continue to be subject to the general ‘‘synchronous’’ be removed from supervised and monitored, provided the requirements in the definition of paragraph (1)(iv). The commenters institution maintains the appropriate ‘‘distance education,’’ which requires explained that removing the word technological resources and internal regular and substantive interaction synchronous from the definition would controls. We disagree with commenters between students and instructors. In allow institutions who wish to offer who indicated that learning technology such programs, some, but not all, clock clock hour programs synchronously or is not yet capable of monitoring student hours would need to involve asynchronously, or a combination of engagement in this manner, especially substantive interaction between both, the flexibility and opportunity to since the Department has already students and instructors. prepare the twenty-first century reviewed and approved clock hour Changes: We have modified workforce in engaging and innovative programs that used online learning paragraph (1)(iv) of the ‘‘clock hour’’ ways. platforms that are capable of the definition to express that a clock hour Discussion: We are persuaded by the required monitoring. includes a synchronous or comments that preventing institutions The Department remains concerned asynchronous class, lecture, or from offering instruction by about the possibility that clock hours recitation where there is an opportunity asynchronous means is unnecessarily offered asynchronously could be used as for direct interaction between restrictive and counter to the purposes a means to complete unsupervised instructors and students. We also added of this rulemaking. The emergence of homework assignments rather than a new subordinate paragraph to include, the COVID–19 pandemic has illustrated coursework that otherwise would have as part of the definition of a clock hour, the need for institutional and student occurred in the classroom, which is 50 to 60 minutes of active participation flexibility with regard to the time and prohibited under the Department’s in an asynchronous learning activity place that coursework is completed, and longstanding policy for clock-hour involving academic engagement in a number of licensing agencies are also programs. Our position is that the which a student interacts with creating new flexibilities for the use of requirement for supervision of a clock technology that can monitor and asynchronous learning in clock hour hour in an asynchronous learning document the amount of time that the programs. Asynchronous learning environment is met when the institution student participates in the activity. allows students to design their own is capable of documenting the specific Comments: One commenter urged the learning schedules around the demands form of academic engagement associated Department to provide flexibility to of work and family that often interfere with the activity—for example, institutions with distance education with class activities offered only at asynchronous participation in an clock hour programs, whether taught in

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synchronous or asynchronous learning education. We also disagree with the precisely enough. The commenter environments, such that when commenter that the technology needed pronounced that a vague seat time monitoring clock hours, the institutions to perform this monitoring does not requirement may cause undue be given the flexibility to assign clock exist or that it cannot be obtained by challenges for an institution with hours based upon the assignments institutions and students. The rigorous accrediting agencies at the provided to students as long as there is Department has seen demonstrations of regional and/or professional level. adequate communication between the such technology by institutions that Discussion: The Department does not instructor and students. The commenter offer clock hour programs and was establish academic requirements for mentioned that providing the flexibility convinced that the technology was both educational programs, including clock to monitor that instructors are providing viable and appropriate for use in hour programs. Under the Department relevant assignments equal to the monitoring clock hours completed of Education Organization Act, such number of clock hours for which a asynchronously. requirements remain within the student is enrolled would be adequate Changes: None. purview of accrediting agencies and since the quality of the educational Comments: One commenter asserted States, which are free to set program has been reviewed and that the Department’s proposed clock requirements they feel appropriate for monitored by the school’s accrediting hour definition fell short of its stated what is considered successful agency. goal in the NPRM ‘‘to remove barriers completion of a clock hour in each Two commenters indicated that that institutions face when trying to program.8 This longstanding approach monitoring each student’s time spent on create and implement new and to the oversight of academic academic engagement would be innovative ways of providing education requirements recognizes the autonomy challenging given the cost and to students.’’ Specifically, the of postsecondary institutions and the availability of current technology. One commenter suggested that the modern- unique qualifications of their of those commenters indicated that it is day use of a calculation of seat time to accrediting agencies and States to currently impossible to properly measure student learning and progress respond to issues of academic quality. monitor and track a student’s is grounded on a false premise, Changes: None. attendance in 50 out of 60 minutes for especially considering today’s online Comments: One commenter urged the each clock hour via distance education technologies, including artificial Department to maintain the due to a lack of institutional means and intelligence and adaptive learning tools. requirements listed under paragraph (3) technological uniformity. In addition, The commenter opined that since the requiring programs to meet all clock the commenter expressed a concern that definition of a ‘‘clock hour’’ is not hour limitations or criteria established the notion that technology has defined in title IV, the Department by school accrediting agencies, States, sufficiently advanced to permit should consider removing the definition and applicable licensure bodies. The institutions to conduct remotely of ‘‘clock hour’’ from § 600.2 and commenter also expressed support for synchronous, face-to-face instruction instead, rely on accrediting agencies, as limiting clock hours via distance with students and to monitor the exact the entities that set standards on education to synchronous programs in amount of time students participate in academic quality, to provide academic the final rule because monitoring a learning sessions is flawed because it is oversight of institutions’ policies student’s completion of a clock hour in based on the premise that both the relating to the measurement of student an asynchronous program would be instructors and students can obtain, learning and progress. virtually impossible. operate, and monitor the required Discussion: We disagree that the use The commenter stated that monitoring devices needed to properly conduct of clock hours to measure a student’s asynchronous learning would diverge distance education learning. The progress for purposes of the title IV, too much from the proposed clock hour commenter asserted that the Department HEA programs prevents institutions definition and the Department would would be best served by dropping the from using innovative technology or most likely be unable to assess the new clock hour definition and instead, instructional methods. We believe that minimum technology needed for focusing on ensuring that an adequate it is vital for institutions to be able to institutions to adequately monitor amount of work is being completed award and disburse title IV, HEA asynchronous distance education rather than mandating a set amount of assistance using clock hours as a learning. time be spent on coursework. measurement of student progress Discussion: We do not believe that it Discussion: While we agree that it because that form of measurement still would be impossible for an institution should be possible for a student to earn aligns with many Federal and State to maintain the appropriate technology clock hours through participation in licensure requirements for a variety of and procedures to monitor and asynchronous online learning activities, professions. This alignment ensures that document clock hours earned based on we disagree that an institution can institutions that are already required to completing asynchronous educational measure such clock hours without monitor and document a student’s activities. However, we agree that it is monitoring a student’s actual successful completion of clock hours for important to ensure that institutions participation in those activities. A clock other purposes can use that monitoring comply with any requirements set by hour is a period of 50 to 60 minutes in to demonstrate that the student has accrediting agencies or State licensing a 60-minute period spent receiving made progress for purposes of the title or approval agencies regarding clock instruction or actively participating in a IV, HEA programs rather than requiring hours and intend to retain that particular educational activity, and such institutions to perform a component of the clock hour definition. institutions are responsible for cumbersome and potentially Changes: None. measuring the amount of time that burdensome conversion of clock hours students spend in such activities. The to credit hours or some other equivalent Definition of Credit Hour (§ 600.2) Department has never permitted measure. Comments: Numerous commenters institutions to award clock hours based Changes: None. expressed their overall support for the on estimates of completed work and Comments: One commenter expressed proposed changes to the definition of a does not intend to do so for clock hour concern that the clock hour definition programs offered through distance does not define student seat time 8 See 20 U.S.C. 3403(b).

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credit hour, with several of those ‘‘credit hour’’ for other academic measurements of student work, commenters specifically asking that the activities as established by the academic calendars, disciplines, and Department make no changes to the institution be consistent, by institution degree levels. This new language consensus language agreed to by and course, between requirements for actually deemphasizes the strict negotiators. Some of this support was on-campus and on-line monitoring of measure of learning time. qualified to varying degrees, ranging student work. Although the Department takes from observations that the credit hour is Discussion: We appreciate the general seriously any identified risk to student a less than ideal measure of student support for our proposal to broaden the privacy, the commenter was not specific progress to a request on the part of two definition of ‘‘credit hour’’ in a way that as to what those risks are. Finally, with commenters concerned about the rule’s focuses on student learning rather than respect to the potential consequences of enforceability that the Department seat time and is flexible enough to these proposed rules being available for restore the requirements in §§ 602.24(f) account for innovations in the delivery public review, we believe the comment and 603.24(c) (84 FR 58931) requiring models used by institutions. Even period following publication of the that accreditors and State agencies among those commenters whose NPRM in the Federal Register provided respectively, conduct review and support was tempered with reservations such an opportunity. evaluation of the reliability and over the proposed definition of a ‘‘credit We further disagree with the accuracy of the institution’s assignment hour’’ either adhering too closely to the commenter who asserted that the of credit hours. current definition or broadening it too Department made proposals to change One commenter expressed opposition much, there was strong agreement that the definition of ‘‘credit hour’’ without to the revised definition of ‘‘credit no changes should be made to the any evidentiary basis or support, hour’’ based on concerns that changing consensus language in the NPRM. rendering them legally insufficient the definition of ‘‘credit hour’’ to focus In response to those commenters who under the APA, or that it failed to on student learning time may pose new expressed support for the proposed present evidence during the negotiated risks to students and their privacy. The changes to the definition of ‘‘credit rulemaking that would justify changing commenter offered that if recording of hour’’ but asked that the Department the definition of ‘‘credit hour.’’ In individual learning time becomes restore the requirements in current preparation for the subcommittee desirable initially for credit hour §§ 602.24(f) and 603.24(c), as previously meetings on distance learning and validation, it may become desirable for explained in the preamble to the innovation, the Department produced individual student measurement, and November 1, 2019 final rule on State several position papers outlining its that the potential consequences of this Authorization and Accreditation (84 FR reasons and justifications for all should be available for public review. 58875), we continue to believe the proposed rule changes under Another commenter asserted that the agency review requirements are consideration by that subcommittee, Department should maintain the unnecessarily prescriptive and including those related to the definition definition of ‘‘credit hour’’ in the NPRM administratively burdensome without of a credit hour. The proposed but that the Department made proposals significantly improving accountability definition was discussed at length in the to change the definition without any or protection for students or taxpayers. subcommittee and again at the evidentiary basis or support, rendering However, we note that the ‘‘credit hour’’ negotiating table. A detailed, written them legally insufficient under the APA. definition in both current and proposed discussion of the Department’s reasons The commenter asserted that by failing § 600.2 requires that the amount of for proposing these changes is contained to present evidence during the student work determined by an in the April 2, 2020 NPRM on pages negotiated rulemaking that would institution to comprise a credit hour be 18646 and 18647. However, we justify a change, and by failing to approved by the institution’s accrediting appreciate the commenter’s overall suggest in the NPRM that the agency or State approval agency. support for the consensus language. Department has support to justify those Moreover, nothing precludes an In response to the commenter who original proposals now, the Department accrediting agency or State authorizing expressed concern that the proposed has no choice but to maintain the agency from examining or questioning definition of ‘‘credit hour’’ does not consensus definitions included in the an institution’s credit hour policies account for transfer hours, we note that NPRM. either as part of a routine evaluation of credit hours, as they pertain to the title Concerned that the proposed that institution’s academic programs or IV, HEA programs, are a measure of definition of ‘‘credit hour’’ does not as the result of specific concerns. student workload necessary to adequately account for transfer credits, We disagree with the commenter who determine enrollment status and award one commenter offered revisions to the opposed the changes to the definition of amounts. Credit hours that an amendatory text in the NPRM that ‘‘credit hour’’ proposed in the NPRM on institution accepts on transfer have no would change the characterization of a the basis that an increased focus on effect on making these determinations credit hour as, ‘‘an amount of student student learning time may pose new and are, therefore, not integral to the work’’ to ‘‘work by a student with risks to students and their privacy. The definition of a credit hour for title IV average, but appropriate, preparation definition of ‘‘credit hour’’ as proposed purposes. The commenter identified . . .’’ and include recognition and in the NPRM does not place an several problems with respect to transfer consideration of the importance and increased emphasis on learning time. hours, including the disparity among widespread usage of credit transfer Time-based requirements relative to institutions in how transfer hours are among institutions. The commenter also classroom instruction and other considered and accepted. suggested that the Department address a academic activities included in the While we agree on the need to address perceived disparity between workload proposed definition of ‘‘credit hour’’ are challenges regarding transfer of credit, expectations of students in on-campus those found in the current definition. we do not believe that this definition is courses versus those offered through Additional language in the proposed the appropriate place to do so or that the distance education. The commenter definition clarifies that, in determining revisions to the proposed definition of proposed to stipulate the equivalent the amount of work associated with a ‘‘credit hour’’ suggested by the amount of work as required in credit hour, an institution may consider commenter would change the way paragraph (1)(i) of the definition of a variety of delivery methods, transfer hours are treated by

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institutions. With regard to any classified as instructors. One commenter commenters pointed out that the disparities that may exist between what also expressed support for the consensus agreement for the proposed is expected of students taking classes Department’s use of the plural definition of ‘‘distance education’’ offered through distance education and ‘‘instructors’’ rather than ‘‘the reflected a thoroughly discussed what is expected of students enrolled in instructor’’ because it would enable compromise among negotiators. classes offered on campus, we do not more people to teach as a team and Several commenters contended that it agree with the commenter that these can provide more individualized attention is imperative to clearly distinguish be addressed by revising the proposed to students. between distance education and definition of ‘‘credit hour.’’ Institutions Several commenters supported the correspondence courses and ensure that themselves set the academic standards Department’s proposed requirements for quality standards exist for distance for their programs. The definition of substantive interaction, indicating that education programs, especially given ‘‘credit hour’’ merely establishes a the definition supports a variety of the history of abuses related to reasonable measure of student activities needed for teaching and correspondence courses. The workload. We believe that the learning. One commenter indicated that commenters asserted that diluting the amendatory text, agreed to by defining and clarifying what constitutes proposed definition could result in negotiators, permitting an institution, in ‘‘substantive interaction’’ between online programs becoming eligible for determining the amount of work students and faculty would give Federal student aid even when the associated with a credit hour, to take institutions the ability to innovate programs do not offer the same quality into account a variety of delivery without fear of the loss of Federal of education or degree of connection methods, measurements of student student aid eligibility. Another between students and qualified work, academic calendars, disciplines, commenter indicated that the instructors. One of those commenters and degree levels, accommodates a requirements for substantive interaction urged the Department not to revert to its variety of modalities, including distance are appropriately adaptable because original proposal to allow accrediting education. they allow accrediting agencies to agencies alone to articulate Changes: None. approve different types of instructional requirements for regular and substantive activities. One other commenter was interaction and instructors with Definition of Distance Education supportive of the consensus language minimal Federal guidelines. One Comments: Numerous commenters relating to substantive interactions, commenter asserted that the expressed their support for the noting that while the Department’s Department’s original proposals for Department’s proposed definition of original proposal had defined changing the definition, later rejected in ‘‘distance education.’’ Many substantive interaction as an interaction the consensus language, would have commenters thanked the Department for that simply related to course material undermined the requirements for providing greater clarity and specificity under discussion, negotiators opposed regular and substantive interaction and to the definition. One commenter this language because it did not for the qualifications for an instructor highlighted several recent audits by the specifically address teaching and and urged the Department not to return Department’s Office of Inspector learning in the way that the consensus to those proposals. General (OIG) focusing on the language does. Other commenters pointed out that requirements for regular and substantive Several commenters also supported the requirements for regular and interaction and pointed to the large the Department’s requirements for substantive interaction exist in law amount of proposed liabilities in those regular interaction. One commenter because of past abuses in audits as a reason that the definition of indicated that the flexibility of the correspondence programs, particularly ‘‘distance education’’ needed to be definition was important given of veterans seeking to use educational clarified. Another commenter asserted variability across a wide range of benefits. One of these commenters noted that the changes modernize the program types and topics and helped that after passage of the 1944 definition and permits more flexibility limit administrative burden. Another Servicemen’s Readjustment Act of 1944 for postsecondary institutions to offer commenter supported the ability for (commonly known as the ‘‘GI Bill’’) educational programs. institutions to determine the number of hundreds of thousands of servicemen Several commenters were substantive interactions that are used their education benefits under that appreciative of the Department’s efforts appropriate based on the length and law to enroll in correspondence courses, to eliminate references to outdated amount of content associated with a but only approximately 10.7 percent of technology such as CD–ROMs. Other course. One commenter expressed those veterans completed their commenters indicated that the strong support for requiring both programs. That commenter also pointed definition holds institutions predictable opportunities for interaction out that Congress acted in the early accountable for providing students in and the prompt and proactive 1990s to address similar types of abuses distance education programs with monitoring of student engagement, in correspondence courses related to the communication and engagement with indicating that the requirements would title IV, HEA programs. Another qualified instructors on a predictable result in more affordable and accessible commenter noted that the OIG has and regular basis. pathways for students while ensuring repeatedly raised concerns about Many commenters supported the high-quality instruction. distance education and has addition of the concept of ‘‘qualified Discussion: The Department thanks characterized it as an area that poses instructors’’ who meet the instructional the commenters for their support. significant risk to the integrity of the requirements of an institution’s Changes: None. FSA programs. accrediting agency. One commenter Comments: Many commenters urged One commenter referred to research stated that the proposed definition the Department to maintain the that shows that Latino students enrolled would provide institutions with a regulatory language agreed upon in in online education have lower single, clear definition of ‘‘instructor’’ consensus with non-Federal negotiators academic and attainment outcomes than for financial aid purposes, that could for regular and substantive interaction in face-to-face courses and that help prevent confusion during audits and the requirements for instructors in interviews with such students highlight about which staff members can be distance education programs. Several the absence of a meaningful student-

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instructor relationship as a contributing ‘‘instructional team’’ into the definition interaction with students can fulfill the factor to those poor outcomes. Another of ‘‘distance education.’’ requirements of the ‘‘distance commenter referenced research that One of these commenters described education’’ definition for regular and suggests faculty-student interaction the use of instructional teams as a substantive interaction between plays a key role in a quality online practice that occurs in on-campus students and instructors. Note that education and that underprepared and settings across various fields of study accrediting agencies can choose to disadvantaged students tend to and that provides exceptional designate individuals as instructors who underperform and, on average, opportunity to students by allowing do not meet the traditional criteria for experience poor outcomes in such them to interact with several experts in faculty, and many already do in programs. That commenter also a given course. Another commenter instances, for example, where workforce referenced research that suggests online argued that explicitly addressing the experience may be more important to students desire greater interaction with concept of instructional teams in the teaching and learning than an advanced their instructors and that, in general, definition would acknowledge the degree. Accreditors are also permitted to online education has not improved reality that distance education is an designate an individual as an affordability, frequently costs more, and instructional team endeavor that does ‘‘instructor’’ meeting its requirements does not produce a positive return on not rely upon arbitrary distinctions only in specific situations, for example, investment. One commenter asserted between an instructor and someone where a less-experienced individual is that if the requirement for regular and involved in facilitating the delivery of teaching in a team setting with an substantive interaction is weakened, course content who is not considered an experienced instructor of record having there is a risk that inequities will instructor. responsibility for the course in general. increase between those students who One commenter argued that team- Given this degree of flexibility, we have access to substantive interaction based instructional models could be believe that the regulation as written with instructors and those who do not. complicated if substantive interactions provides ample opportunity for distance That commenter expressed that this is could only be provided by individuals education to occur with the use of an even more critical issue now that that met an accrediting agency’s instructional teams, but only when such institutions are moving online because requirements for instruction and noted use conforms with the requirements of of the COVID–19 emergency. that some types of interactions an instruction’s accrediting agency. Discussion: We agree that it is described under paragraph (3) of the Changes: None important for the regulations to clearly definition, including assessing or Comments: Several commenters distinguish between the definitions of providing feedback on a student’s expressed concern with the ‘‘distance education’’ and coursework, could be provided by Department’s proposal to replace the list ‘‘correspondence courses’’ and believe assessment specialists who do not meet of technologies in the definition of that the proposed definitions the definition’s requirements for a ‘‘distance education’’ with the phrase accomplish that goal. Whereas the qualified instructor. ‘‘other media.’’ definition of a correspondence course Conversely, one commenter objected Two commenters indicated that the describes interaction between students to the Department’s proposal to use the word ‘‘media’’ was not specific enough and instructors in such the course as term ‘‘instructors’’ rather than ‘‘the to limit the types of modalities that ‘‘limited . . . not regular and instructor,’’ arguing that doing so would could be used in distance education. substantive, and . . . primarily initiated allow quasi-professionals to teach more One of those commenters recommended by the student,’’ the definition of advanced subject matter as part of a that the Department add the phrase distance education requires regular and team. The commenter asserted that this ‘‘and other types of media’’ after listing substantive interaction between situation could result in such each type of technology. The other students and instructors and clearly instructors only tangentially monitoring commenter recommended that the explains the requirements for each student discussion rather than Department continue to add new media component of that definition. We also substantively engaging with students. types to the definition rather than agree that it is important to adhere to Discussion: The Department does not removing the existing types that were the agreed-upon language of the object to the use of instructional teams, listed. members of the subcommittee and full regardless of the modality of the One commenter suggested that the committee, who were able to reach coursework. Indeed, we support Department eliminate the list of agreement on the definition of the term innovative educational models that technologies that could be used to offer despite strong initial differences of provide additional support, both a program through distance education opinion on the matter. We agree with academic and otherwise, to support unless we plan to update the the commenters who referenced the student success. However, we believe appropriate formats on a regular basis importance of regular and substantive that the current regulatory language (for example, annually). interaction between students and accommodates the use of instructional Another commenter expressed instructors, particularly for students teams and no change is necessary in concern that replacing references to who are underprepared, and believe that order further encourage their use. types of media with the phrase ‘‘other the requirements for such interaction Regardless of the composition of an media’’ could cause institutional expressed in the definition strike the instructional team, the Department officials to interpret the phrase as the appropriate balance between assuring expects that such a team would include use of one type of media. interaction with qualified instructors qualified individuals with subject Discussion: We appreciate the and allowing institutions the flexibility matter expertise who are expected to commenters’ suggestions, but we do not to offer programs using innovative, instruct, guide, or otherwise respond to plan to update the list of acceptable student-oriented pedagogical questions from students about the technologies at this time. The HEA techniques. subject matter of a course or currently prescribes the types of Changes: None. competency. Such individuals, technologies that may be used for Comments: Several commenters assuming they meet accrediting agency distance education, and in this opined on whether the Department requirements for instruction, are the rulemaking the Department is not should incorporate the concept of an staff members whose substantive making changes to the statutory

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requirement, but is instead simplifying specific length of time that it considered success’’ with respect to a course or this list in the regulations by referring to be ‘‘regular’’ for purposes of this competency. This requirement is not to ‘‘other media’’ rather than including definition. intended to mandate that instructors all of the types of media that may be Another commenter asked how personally monitor each student’s used to deliver distance education. institutions would monitor a student’s engagement throughout each class Changes: None. engagement in distance education, session while also instructing, Comments: One commenter suggested particularly when an interaction occurs facilitating discussion, or responding to that the Department define during a videoconference where the questions from students. Instead, the ‘‘instruction’’ rather than ‘‘instructor’’ instructor is working to develop the requirement is intended to ensure that and use the definition of the former to student’s understanding of a particular instructors are generally monitoring inform requirements for the latter. topic while also attempting to monitor whether a student is engaged and Discussion: The Department chose to the student’s engagement. successful throughout a given course or clarify the requirements for an One commenter expressed concern competency and takes appropriate instructor for purposes of the definition that the regulations only require the action as needed. Such monitoring of ‘‘distance education’’ because the opportunity for interactions with could include evaluating a student’s term is specifically used in statute with instructors when needed. The level of participation in synchronous reference to distance education. commenter indicated that this lack of class sessions, but it could also involve Moreover, we believe that it is beyond mandatory proactive instruction, when monitoring the student’s activity on our purview to define the term combined with a lack of emphasis on course websites or materials; ‘‘instruction’’ given its broad faculty involvement, could lead to considering the quality of the student’s application in postsecondary education confusion about the distinction between assignments or responses to questions and the restrictions on the Department’s distance education and correspondence about course materials; evaluating the oversight of academic quality in the courses. The commenter recommended level of the student’s understanding of Department of Education Organization that the Department delete the words course materials during conversations Act. ‘‘the opportunity’’ from paragraph (5)(i) with instructors or performance on Changes: None. of the definition and delete ‘‘when exams; or other forms of monitoring the Comments: One commenter expressed needed’’ from paragraph (5)(ii) in order student’s engagement and success in the concern about the variability between to require proactive substantive course or competency. accrediting agencies regarding their interaction for every student. We agree with the commenters that requirements for an instructor in the Several commenters noted that the the word ‘‘scheduled’’ is more context of the definition of ‘‘distance regulations describing ‘‘regular descriptive and provides greater clarity education.’’ The commenter stated that interaction’’ included a requirement for than the word ‘‘regular’’ for purposes of each accrediting agency should have a the interaction to be ‘‘regular,’’ which describing ‘‘regular interaction.’’ strong definition of a quality instructor the commenters felt was redundant. Furthermore, the Department believes that includes requirements for Three of those commenters that the word ‘‘scheduled’’ more clearly qualifications to teach in the relevant recommended that the Department reflects the intent of the Distance competencies. Two commenters also replace the phrase ‘‘regular and Learning and Innovation subcommittee recommended that in cases where predictable basis’’ with the phrase and the full negotiating committee to students have multiple instructors, the ‘‘scheduled and predictable basis.’’ ensure that students are provided students should be informed of which Discussion: Given the variety of scheduled opportunities to interact with instructor is the instructor of record. distance education programs, instructors for which the students can Discussion: We believe that coursework, instructional modalities, prepare in advance. accrediting agencies are the appropriate and course schedules, we do not believe Changes: We have replaced the phrase arbiters of academic quality for it is practical to offer a specific ‘‘predictable and regular basis’’ with the postsecondary education, including timeframe for regular interaction. The phrase ‘‘predictable and scheduled regarding the appropriate requirements Distance Learning and Innovation basis’’ in paragraph (5)(i) of the for instructors. The Department is subcommittee strongly disagreed with definition. prohibited from creating regulations or that approach when it was presented, Comments: One commenter explained other requirements regarding the arguing that establishing such a that there are two types of distance academic quality of educational timeframe would either be overly education models that higher education programs under the Department of prescriptive or excessively complex. has developed—synchronous and Education Organization Act. Similarly, an institution cannot be asynchronous—and that the Furthermore, while it is true that there expected to ensure perfect attendance asynchronous model better reflects the may be variation among accrediting by students at each opportunity for realities of working adults, differing agencies regarding requirements for interaction with an instructor, which is levels of preparation, and the instructors, we believe this is why the Department, the subcommittee, importance of assessment. The appropriate given the different types of and the negotiating committee agreed to commenter pointed out that many new qualifications that may be needed frame the requirement as an students in higher education are ‘‘non- depending on the types of programs and ‘‘opportunity’’ for interaction rather traditional’’ and include a large number degree levels offered. than a required interaction. This of veterans and students with families. Changes: None. approach has the added benefit of The commenter asserted that these Comments: Several commenters allowing institutions to demonstrate students have schedules that they sought clarification regarding the compliance with the requirements at the cannot control and are better served by Department’s requirements for ‘‘regular program design level without asynchronous courses that support their interaction.’’ documenting each and every interaction needs for flexibility, while the One commenter indicated that between students and instructors. institution ensures that each student is interactions in asynchronous courses The requirements for regular evaluated based on the student’s may not be predictable and asked the interaction include monitoring a demonstration of mastery of the Department to clarify by providing a student’s ‘‘academic engagement and competency or course. The commenter

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recommended that the requirements for education’’ will offer a degree of commenter requested that the regular interaction point to interactions certainty to institutions both familiar Department remove the requirement for that are appropriate to the course and unfamiliar with online learning and at least two types of substantive modality and consistent with student will make it easier for institutions to interaction because it was unclear how success. shift to an online modality in the event often each type of interaction needed to Discussion: We agree with the of a pandemic in the future. occur and such ambiguity could cause commenter that distance education may, The Department’s recent COVID–19 considerable confusion for institutions in many cases, have the capability to distance education guidance for attempting to implement the address the needs of non-traditional institutions related to COVID–19 was requirements. students better than traditional intended to be temporary and was One commenter asked how classroom courses. However, we necessary to address the urgent need to instructors would calculate the time that disagree that the regulatory definition shift instructional operations online they spend on substantive interaction needs to include a reference to the very quickly. The Department has when one of the categories of such appropriateness of interactions with established a specific timeframe for that interaction includes responding to respect to course modality and student guidance and will expect institutions to questions about the content of a class. success for institutions to offer programs again comply with regulatory and Discussion: The Department’s that are sufficiently flexible. Though the statutory requirements when the requirements for regular and substantive definition of ‘‘distance education’’ waivers and flexibility related to interaction between instructors and establishes certain requirements for COVID–19 expire. students occurs at the course or interaction in online programs, the Changes: None. competency level. The Department’s Department defers to institutions and Comments: Many commenters asked intent with this definition is to ensure their accrediting agencies regarding questions about the Department’s that, for a given unit of study (for whether a program’s design involves requirements for ‘‘substantive example, a class such as English 101 or interactions that are appropriate and interaction’’ under the definition of a competency such as the ability to tailored to the needs of students. ‘‘distance education.’’ perform statistical analysis) a student Changes: None. A few commenters asked the has ample opportunity to substantively Comments: A few commenters asked Department to clarify whether interact with an instructor and the questions about the relationship substantive interaction was required to instructor (or instructors) monitor the between the Department’s final occur regularly at the ‘‘instructor level’’ student’s engagement and performance, regulations and the COVID–19 or the ‘‘course-competency level.’’ Two and provide scheduled opportunities for pandemic. of those commenters expressed concern interaction with the student as needed One commenter asked the Department that if the definition were applied at the on the basis of that monitoring. how its proposed definition of distance instructor level and not the course- Additionally, the regulations must education would prepare institutions for competency level, it could exclude apply at the course or competency level future pandemics and whether some aspects of an ‘‘unbundled’’ because they are designed to distinguish institutions should be required to instructional model. One commenter distance education from correspondence implement distance education training offered the example of assessment courses for purposes of exempting programs so that they are prepared to experts whose skills and expertise are distance education from the limitations shift to an online modality if and when tailored toward developing and scoring on the percentage of correspondence a pandemic prevents in-person assessment, as well as providing courses that an institution may offer. instruction once again. The commenter students with feedback, but who might Applying the regulatory requirements asserted that new options for learning not be considered to be ‘‘faculty.’’ That for distance education at the modalities would not prompt an commenter argued that the Department instructional unit level ensures that any increase in the number of students should indicate that its intent was for online course or competency that is enrolling in distance education courses substantive interaction to occur at the misclassified as distance education can and asked how the Department’s course/competency level. be included in the calculation of the proposal would reduce barriers to Several commenters asked the percentage of correspondence courses access for students given those trends. Department to explain the interaction that the institution offers for purposes of Another commenter pointed out that between the regulations requiring at the institutional eligibility requirements the Department’s recent guidance for least two types of substantive under 34 CFR 600.7. distance education related to the interactions and the requirements for The Department also applies the COVID–19 pandemic were inconsistent such interactions to be ‘‘regular.’’ One requirement for a substantive with the regulatory requirements for commenter asked whether both types of interaction to include at least two types distance education in the proposed rule. substantive interaction were required of activities listed in the definition at Discussion: Many institutions with throughout a semester, or whether an the course or competency level. The limited distance education offerings at institution could engage in one or the definition of ‘‘distance education’’ lists the time of the initial COVID–19 other activities at any time to meet the several different types of interaction that outbreak were unprepared for the requirements. A separate commenter can fulfill the requirements for impacts of the pandemic and did not asked whether the two forms of ‘‘substantive interaction,’’ including have adequate resources or the expertise substantive interaction needed to be direct instruction, assessment, to quickly shift to an online learning alternated on a regular basis or whether responding to questions about the modality. Though many institutions both forms of interaction were required course materials, facilitating a group were able to shift to an entirely new in the same class session. That discussion regarding the course content, modality, many were still faced with a commenter recommended that the or other instructional activities complicated and confusing regulatory Department either clarify this point or approved by the institution’s accrediting framework for distance education that strike the requirement for more than one agency. The definition requires an they had never encountered before. The form of substantive interaction, institution to perform at least two of Department’s hope is that clarifying and asserting that it could cause those activities, and since we apply the expanding the definition of ‘‘distance implementation challenges. Another regulation at the course or competency

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level, we also require an institution to regular basis or monitoring the student’s additional flexibility in the definition perform at least two of those activities academic engagement and success and was therefore preferable. over the period of time that the student ensuring that an instructor is Discussion: As one commenter noted, completes the course or competency. responsible for promptly and the Distance Learning and Innovation We believe that requiring a specific proactively engaging with the student— subcommittee’s recommendation was to timeframe, sequence, or frequency that as opposed to requiring the institution allow an institution to fulfill the the activities need to occur within that to take both of those actions. One of requirement for regular interaction by timeframe would be impractical and these commenters argued that the either maintaining predictable and would extend beyond our purview proposed regulations would require scheduled opportunities for interaction under the Department of Education institutions to adhere to a time-bound or by maintaining a system for Organization Act. model that may not be appropriate for evaluating a student’s engagement and The Department does not expect an the institution’s instructional modality progress and ensuring that an instructor institution to measure or document the or its students. Two other commenters followed up when appropriate. The exact amount of time that it or its subcommittee’s intent was to allow indicated that the intent of the Distance students spend on any particular type of institutions with self-paced programs to Learning and Innovation subcommittee substantive interaction. An institution is use other techniques other than was to allow institutions to choose the expected to maintain academic policies scheduling planned interactions, which type of ‘‘regular’’ interaction that best or procedures that create expectations in the past had led to perfunctory for faculty to substantively interact with suited the academic program and mandatory phone calls or class sessions students on a predictable and scheduled recognized that some institutions have that did not provide great benefit to basis and to monitor each student’s sophisticated technologies that monitor students. engagement and success and follow up student engagement and success and Despite the subcommittee’s concerns with the student as needed. alert instructors when students are not about requiring predictable Changes: None. engaged or are struggling with material. opportunities for interaction, the full Comments: One commenter These and other commenters also negotiating committee decided that it recommended that the Department add cautioned that requiring both was important for both conditions to be language requiring that institutions components of the definition could met. The committee believed that the using distance education ensure the result in a requirement that institutions proposed definition, requiring both accessibility of the learning materials adhere to a strict, time-bound schedule, predictable interactions and student and remain compliant with Section 508 which is counter to the format in many monitoring, offered sufficient flexibility of the Rehabilitation Act. The competency-based education programs. regarding the number and frequency of commenter argued that technology can Many commenters also argued that scheduled interactions based upon the be a limiting factor for individuals with many institutions lack the technology or length and intensity of the student’s disabilities if the systems used are not resources needed to monitor a student’s coursework. In a self-paced course or accessible. engagement and success. Another competency in which a student The commenter also asked the commenter indicated that the ‘‘and’’ approaches the coursework at his or her Department to add a requirement for would limit the variety of instructional own pace, the institution is not required instructors to be ‘‘flexible and work approaches that could be available to to schedule, for example, weekly with the student to determine the most institutions if one or the other action opportunities for interaction. Instead, appropriate communication mode to fulfilled the requirement. One the institution may decide that the maximize the student’s ability to commenter also noted that reverting to appropriate timeframe for scheduled participate.’’ The commenter indicated ‘‘or’’ between those paragraphs would opportunities for interactions is bi- that because some students struggled recognize the importance of a team weekly or monthly, or a different with communication technology, approach to instruction and co- frequency. Furthermore, by not instructors should customize their curricular activities. Several requiring mandated interactions, the definition does not impose a online programs to ensure that students commenters argued that reverting to bureaucratic requirement for a are being evaluated for their knowledge ‘‘or’’ would set expectations for distance of content rather than their ability to scheduled course session, but instead education, including monitoring each access technology. simply ensures that students are aware Discussion: The Department does not student’s engagement, beyond what is that there will be planned occasions that believe it is appropriate to regulate the expected or required for on-campus they will be able to interact with an Rehabilitation Act using the definition instruction. Several commenters also instructor about course content. of ‘‘distance education,’’ which is asserted that the change to ‘‘and’’ could Similar concerns were also raised by derived from the HEA. That said, we push institutions to adopt learning commenters about requiring more strongly support the intent of the analytics tools to track student progress, traditional class-based online programs Rehabilitation Act and expect every which could increase the cost of to maintain a system for monitoring institution with a distance education educating students and introduce student engagement and interacting program to adhere to that law’s statutory privacy or other ethical concerns. One with the students on that basis. We and regulatory requirements. commenter pointed out that requiring disagree with several commenters that Changes: None. institutions to implement both institutions would need to purchase Comments: Many commenters components of the requirements for expensive software to track and monitor requested that the Department replace regular interaction could prevent them each student’s online activities to the ‘‘and’’ between paragraphs (5)(i) and from adjusting quickly to market determine whether the student was (ii) of the definition with ‘‘or’’ in order demands and emerging technology. sufficiently engaged. While such to allow an institution to fulfill the Finally, one commenter pointed out that software would meet the requirement if requirement by taking either of the the Department’s OIG would rely upon it were part of a system for monitoring actions in paragraph (5)—providing the the new regulatory definition of and interacting with students when the opportunity for substantive interactions ‘‘distance education’’ when assessing an need arose, it is not a required element with the student on a predictable and institution’s compliance, suggesting that for regular and substantive interaction.

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The Department’s expectation is that online chat or videoconference) for • Instructors are responsive to instructors take a proactive approach to students to interact about the course students’ requests for instructional determining when students need material, regardless of whether the support. assistance and then offering that students chose to make use of this The Department will evaluate assistance, and this could be done either opportunity or interact with the whether an instructor meets an using sophisticated systems for instructor at the scheduled time. accrediting agency’s requirements by monitoring student activity or more However, if an institution does not offer reviewing the agency’s written traditional person-to-person evaluation such opportunities for interaction on a standards and any communication or through the use of tests and quizzes. regular and scheduled basis in an online between the agency and the institution The required ‘‘monitoring’’ could program and instead relies solely upon regarding the agency’s requirements or consist of evaluating each student’s students to initiate interactions with whether the instructors in question met performance in regular online class instructors, it would not meet the such requirements. If the Department is sessions or in regular assignments that requirements for regular and substantive unable to determine whether the have been turned in. This type of interaction between students and instructor meets the agency’s monitoring is common to nearly all instructors and the online program requirements by reviewing such written postsecondary programs and has been would be considered to be taught using materials, it may contact the agency to performed since before the internet correspondence courses. seek a determination on the matter. existed. Changes: None. The Department does not require an Given all of these factors and the level Comments: Several commenters asked institution to monitor or document of importance accorded by the how the Department would oversee every interaction between an instructor negotiating committee to the use of various aspects of the definition of and a student to demonstrate that it has ‘‘and’’ between paragraphs (5)(i) and (ii) distance education. One commenter fulfilled the requirements for regular of the definition, we decline to revert to asked how the Department would assess and substantive interaction. However, the word ‘‘or’’ between those whether an institution’s instructional we encourage institutions to consider paragraphs. activities were approved by the whether they have adequate means of monitoring online programs to ensure Changes: None. institution’s or program’s accrediting Comments: One commenter proposed that they continue to meet all the agency in audits or program reviews. that the Department should provide an conditions of the definition. In The commenter also asked whether outline of the new definition of overseeing the requirements for regular accrediting agencies would be required ‘‘distance education’’ to offer clarity to and substantive interaction with to create a list of approved instructional government officials and citizens about instructors, the Department will activities or whether the Department the changes to the definition. determine whether an institution has would allow agencies to have more Discussion: We thank the commenter established sufficient internal controls ambiguous standards that are applied on for this suggestion and agree that an to demonstrate that it has established (1) a case-by-case basis, which could result outline could make the changes clearer. appropriate academic policies and We plan to publish a clear description in most or all institutions meeting the procedures for its instructors to of each of the changes to the definition requirements. Another commenter implement these provisions; and (2) a of ‘‘distance education’’ in the FSA asked what oversight mechanisms the system for monitoring or periodically Handbook after the changes become Department would use to verify the evaluating its online programs to ensure effective. amount of substantive interaction that its instructors continue to observe Changes: None. reported by institutions. such policies over time. Comments: Several commenters asked Discussion: The Department’s Comments: One commenter, arguing the Department to clarify whether oversight of the requirements for regular that direct instruction was at the core of interactions that were initiated by a and substantive interaction between higher education, recommended that the student would meet the requirements students and instructors will focus on Department require ‘‘substantive for regular and substantive interaction five critical factors that differentiate interaction’’ to include direct between students and instructors. One distance education from correspondence instruction in addition to two other of those commenters sought clarification courses. The Department will seek to elements. regarding whether the Department determine whether— Discussion: The required elements for intends to require evidence of • The institution’s online instruction substantive interaction were determined instructor-initiated interaction, student- is delivered through an appropriate in consensus with the negotiating initiated interaction, or both. form of media; committee, and the Department does not Discussion: The Department does not • The instructors with whom believe it would be appropriate to consider substantive interactions students regularly and substantively diverge from that agreement to narrow initiated by students to meet the interact meet the requirements of the the types of program offerings that requirements for regular interaction in institution’s accrediting agency for would meet the Department’s definition the definition of ‘‘distance education.’’ instruction in the subject matter; of ‘‘distance education.’’ Furthermore, An institution meets the requirement for • Instructors engage in at least two we do not believe it is advisable to regular interaction between students forms of substantive interaction meeting require regular direct instruction in all and instructors by, in part, providing the regulatory requirements for the distance education programs given the the opportunity for substantive course or competency; proliferation of promising new interactions with the student on a • The institution has established educational models that do not rely on scheduled and predictable basis scheduled and predictable opportunities regularly scheduled instructional commensurate with the length of time for substantive interaction between sessions. The Department wishes to and the amount of content in the course students and instructors and create remind the commenter that in the case or competency. This requirement could expectations for instructors to monitor of in-person classroom-based be met if instructors made themselves each student’s engagement and instruction, most schools are not available at a specific scheduled time substantively engage with students on required to take attendance. It the case and through a specific modality (e.g., an the basis of that monitoring; and of credit hour programs, it is the job of

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the institution to provide the students. That commenter also sub-regulatory guidance, in particular opportunity and it is the job of the reiterated a proposal that had been Dear Colleague Letter GEN–14–23, student to take it. proposed by one of the non-Federal which provides additional explanation Changes: None. negotiators during negotiated regarding the meaning of ‘‘regular and Comments: One commenter expressed rulemaking: That the Department substantive interaction’’ with respect to dissatisfaction with the Department’s require institutions to report, for distance education. proposed definitions of students who are enrolled in programs Discussion: We disagree that the ‘‘correspondence course’’ and ‘‘distance in which at least one course can be statutory requirements for ‘‘regular and education,’’ stating that the requirement completed online, whether each substantive interaction’’ for a distance for ‘‘constant communication’’ initiated recipient of title IV, HEA assistance is education program are sufficiently clear by the instructor in distance education enrolled exclusively online, exclusively that a regulatory definition is not was unfair and would hinder students as a brick-and-mortar student, or as a needed. For more than a decade since who need flexibility with respect to the hybrid student in both online and brick- the statutory definition of ‘‘distance time and place that they interact with and-mortar instruction. One commenter education’’ was first created, their instructors. called for a demonstration program for institutions have expressed confusion Discussion: The proposed definition competency-based education authorized about the practical meaning of the term of ‘‘distance education’’ does not require by Congress that would test and have argued that the ambiguity of constant communication between replacements for the credit hour and what constitutes regular and substantive students and instructors and in fact only allow institutions to reasonably interaction have hampered innovation requires scheduled opportunities for experiment with different models of as a result of fears of non-compliance interaction with qualified instructors interaction with students, but argued and audit or program review findings. and a system for monitoring student that in lieu of such a program no Moreover, the concept of ‘‘regular and engagement and success. We believe changes should be made to the substantive interaction’’ is an important these requirements are reasonable and consensus regulations. differentiating factor between distance will permit substantial flexibility for Discussion: We agree with the education and correspondence courses, institutions to create new educational commenters who suggested that which, if improperly understood, could models that place the student, rather additional data regarding the use of result in institutional ineligibility for an than the instructor or the institution, at distance education would be helpful; institution that suddenly becomes aware the center of the learning exercise. however, we do not believe that that it has been offering more than half Changes: None. collecting such data through the of its courses or enrolling more than half Comments: Several commenters National Student Loan Data system is of its students through correspondence emphasized the importance of the appropriate vehicle for that data courses. We also disagree that the improving the quality of information collection to occur. We will consider the definition, as currently written, would and oversight related to distance feasibility of the other suggestions be impossible to meet if it were offered education. offered by commenters for collecting in a classroom setting, since scheduling One commenter said that while some data related to students who are class sessions and performing ongoing information exists about distance enrolled in distance education. The monitoring of each student’s education in the Integrated Department does not have the authority performance and engagement in class Postsecondary Education Data System without action by Congress to develop are traditional teaching functions that (IPEDS), the data are not current and a demonstration program with waivers do not require the use of sophisticated include only the number of students that exceed the Department’s authority software systems. enrolled in distance education courses under the Experimental Sites Initiative. We also disagree that the definition of and completing distance education Changes: None. ‘‘academic engagement’’ necessarily programs. The commenter also Comments: One commenter includes regular and substantive indicated that the National Center for recommended that the Department interaction between students and Education Statistics (NCES) sample eliminate the regulatory definition of instructors and can be used in lieu of a surveys collect some information about ‘‘regular and substantive interaction’’ for description of those requirements in the engagement with distance education, distance education entirely, arguing that regulations. While substantive but because those surveys are based on there is no reason to impose additional interaction with an instructor related to samples and are not conducted requirements beyond what is in the a student’s coursework is certainly a annually, their usefulness in answering statute given advances in technology form of academic engagement, it is not policy and research questions is limited. that permit detailed monitoring of a synonymous with the broader concept The commenter argued that the student’s online activities. The of academic engagement. Department should improve timely data commenter suggested that the Finally, the Department agrees that it collection about distance education Department is not obligated to define is not required by law to continue to given the significant number of students ‘‘regular and substantive interaction’’ in abide by the guidance in Dear Colleague who enroll in that format, the a way that would prevent many on- Letter GEN–14–23, and plans to retract uncertainty about future reliance on ground courses from meeting those and revise aspects of that guidance as distance education options, and the requirements. The commenter further well as guidance in Dear Colleague importance of evaluating regulations advised that the Department’s definition Letter GEN–13–10, related to the related to distance education. The of ‘‘academic engagement’’ was application process for direct commenter suggested adding a field for sufficient to eliminate any confusion assessment programs, that will no the distance education status of enrolled that had arisen about distance education longer apply upon the implementation title IV recipients in the National because it is widely understood that of these regulations. Student Loan Data System (NSLDS). ‘‘regular and substantive interaction’’ is Changes: None. Another commenter suggested that the a descriptive term for ‘‘academic Comments: One commenter Department require institutions to engagement.’’ Finally, the commenter recommended that the Department establish a new location with the noted that the Department is not include the concept of ‘‘co-curricular’’ Department for exclusively online required to follow or defer to its prior education in the definition of distance

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education, in particular with regard to technologies but indicated that Discussion: Only individuals the requirements for substantive innovation could occur in the context of responsible for delivering course interaction. The commenter proposed faculty interaction with students. The content and who meet the qualifications that the definition be revised to express commenter expressed concern that the for instruction established by an that distance education could be either requirements for distance education in institution’s accrediting agency can curricular or co-curricular. the proposed definition would not be fulfill the requirements for regular and The commenter asserted that such the same as those for other modalities. substantive interaction with students. revisions would recognize the Another commenter expressed the The Department does not prohibit other importance of co-curricular activities, opposite view, arguing that the forms of substantive interaction that do which the commenter defined as Department’s OIG had raised concerns not involve qualified instructors, but activities associated with and about replacing the word ‘‘instructor’’ under the statutory definition such complementary of the curriculum. The with the word ‘‘faculty’’ in the interaction cannot meet the commenter argued that, for many ‘‘Promoting Real Opportunity, Success, requirements in the definition of students who enroll in distance and Prosperity through Education ‘‘distance education.’’ Interactions with education programs, particularly adult Reform Act’’ (PROSPER Act), which was artificial intelligence, adaptive learning learners, co-curricular learning plays a introduced in 2017. The commenter systems, or other forms of interactive critical role in enhancing the student noted that the OIG believed that using computer-assisted instructional tools experience and helping to ensure the word ‘‘faculty’’ in the statutory qualify as types of ‘‘academic student persistence and success and that definition of ‘‘distance education’’ engagement,’’ but in this limited context such learning has also played a similar would allow a school to qualify for full those forms of engagement do not meet role in ground-based programs. participation in the FSA programs based the statutory requirements for regular Discussion: The Department agrees on email contact between students and and substantive interaction between with the commenter that co-curricular faculty on matters unrelated to the students and instructors. activities—which are generally aligned subject matter of a program. While we agree with the commenter with and designed to complement the Discussion: Though we do not agree about the importance of human academic curriculum—are useful and with the level of concern that was raised interaction in this definition, we do not often vital components of a by the Department’s OIG regarding the believe the commenter’s proposed postsecondary program that support use of the word ‘‘faculty,’’ or that the changes are necessary because the student persistence and success. use of that word in lieu of ‘‘instructor’’ definition currently requires regular and Because of the close ties between would substantially undermine the substantive interaction between academic coursework and co-curricular definition of ‘‘distance education,’’ we students and instructors; substantive activities, we believe that there may be interactions with machines or other occasions in which such activities are believe that the word ‘‘instructor’’ is more appropriate in this context. Given forms of technology that do not involve designated by an institution’s instructor would therefore not qualify. accrediting agency as types of the use of the word ‘‘instructor’’ in the statutory definition of ‘‘distance Changes: None. substantive interaction under paragraph Comments: One commenter asked the education,’’ we believe that it is (4)(v) of the definition of ‘‘distance Department to reconsider the need for appropriate to focus on a staff member’s education.’’ If an accrediting agency the specific language regarding distance instructional function, rather than that designates a co-curricular activity as a education in an accrediting agency’s person’s faculty role, when making a type of substantive interaction, scope of recognition and, in doing so, determination about whether the staff interactions involving that activity recognize that distance education is a person can fulfill the requirement for would meet the requirements of the more global term regarding instructional regular and substantive interaction with definition. However, we believe that delivery provided which can include students. The function of instruction including the concept of co-curricular online delivery of instruction and and the role of faculty are not activities in the definition would internships and field experiences, such necessarily synonymous; for example, increase the scope of activities more as clinical rotations. many institutions hire research faculty broadly than intended by the Discussion: While the Department that do not have teaching negotiating committee, and therefore recognizes that the term ‘‘distance responsibilities. decline to add the suggested language to education’’ is used to describe a wide the text of the definition. Changes: None. variety of activities in higher education, Changes: None. Comments: One commenter indicated the HEA requires a distance education Comments: Two commenters offered that the proposed requirements for program to be evaluated and approved conflicting opinions on whether the substantive interaction did not appear to by an accrediting agency with approval Department should emphasize the require any direct instruction or group of distance education in the scope of its concept of ‘‘faculty’’ rather than discussion. The commenter asked recognition by the Secretary. ‘‘instructors’’ in the definition of whether it would be possible for an Changes: None ‘‘distance education’’. institution to fulfill the requirements for One commenter argued that the substantive interaction without human Definition of Juvenile Justice Facility current requirements for instructors left engagement, e.g., through assessment (§ 668.2) too much discretion to institutions and and responses to students’ questions Comment: One commenter supported accrediting agencies. The commenter through software or other non-human the new definition of a juvenile justice recommended that the Department means. The commenter recommended facility to ensure that an otherwise should emphasize to accrediting that the Department include eligible student is not prohibited from agencies that faculty should be the requirements for ‘‘engagement between receiving a Federal Pell Grant solely primary ‘‘instructors’’ in postsecondary students and instructors’’ rather than because of confinement in such a education, regardless of modality. The merely a reference to ‘‘engaging facility. commenter was supportive of students’’ to make it clear that Discussion: We appreciate the support innovation and the use of artificial interactions need to be with human from the commenter. The Department intelligence or other innovative beings to meet the requirements. has received questions in the past about

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whether these facilities are correctional Changes: None. risk, nor are we aware of any needed institutions and whether students in the exceptions to the regulatory definition. Definition of Incarcerated Student facilities are eligible for Federal Pell As we will not exclude those in a (§ 668.2) Grants. Neither the HEA nor our ‘‘juvenile justice facility’’ from receiving regulations previously defined the term Comments: A couple of commenters the Federal Pell Grant, this change ‘‘juvenile justice facility.’’ Therefore, we expressed support for the revised would not require an additional FAFSA proposed to define this term in the definition of an incarcerated student. question or the need for other regulations to codify sub-regulatory One commenter supported the emphasis information. guidance published on December 8, on access to Federal Pell Grants while Changes: None. 2014 (Dear Colleague Letter GEN 14– in a juvenile justice facility, noting the 21). We also sought to clarify the term importance of funding to complete Direct Assessment Programs (§§ 600.10 as referenced in the Department’s postsecondary education coursework and 668.10) regulations and materials, including in and potentially obtain an academic Comments: Numerous commenters the definition of ‘‘incarcerated student.’’ credential. The commenter believed this supported the proposed changes Accordingly, we aimed to clarify that change would not only help those in intended to simplify and clarify students in juvenile justice facilities juvenile justice facilities, but society as regulations for direct assessment may receive a Federal Pell Grant if they a whole because education increases the programs. Commonly expressed among are otherwise eligible. likelihood of positive outcomes when those writing in support, was the belief Changes: None. students are released and reduces the that the proposed changes strike an Comment: One commenter provided likelihood those students will reoffend. appropriate balance between supporting both support and opposition to the Another commenter who supported the innovation, along with reducing the definition of ‘‘juvenile justice facility.’’ proposed change suggested that adding administrative burden on institutions, The commenter stated that the HEA the term ‘‘juvenile justice facility’’ to the and ensuring a level of oversight does not allow those who are incarcerated student definition might necessary to promote program integrity. incarcerated in a Federal or State prison imply that the Department is barring Discussion: We appreciate the to receive a Federal Pell Grant and access to Federal Pell Grants to students commenters’ support for these proposed quoted the statutory language. This serving in such a facility. changes. commenter then noted that our Discussion: We appreciate the proposed HEA change would define commenters’ support for the revised Changes: None. ‘‘juvenile justice facility’’ as being ‘‘incarcerated student’’ definition. We Comments: Several commenters included among the list of correctional do not agree that the revised definition expressed opposition to the proposed facilities in the definition of implies a prohibition on eligibility for a changes in § 600.10 requiring an ‘‘incarcerated student’’ for the purposes Federal Pell Grant for those in a juvenile institution to seek and obtain the of Pell Grant availability. The justice facility. In fact, we amended the Department’s approval of a direct commenter favored extending Pell definition of incarcerated student to assessment program only when the Grants to students in juvenile justice clarify that those held in a juvenile institution adds such a program for the facilities but opposed including juvenile justice facility are not considered to be first time, and when the institution justice facilities under the correctional incarcerated to ensure that these offers the first direct assessment institutions in the ‘‘incarcerated students continue to be eligible for program at each level of offering (e.g., a student’’ definition. The commenter Federal Pell Grants. first direct assessment master’s degree believed that the Department’s proposed Changes: None. program or bachelor’s degree program) definition caused confusion about what Comment: One commenter indicated than what the Secretary had previously constitutes an incarcerated student by that some criminal juvenile activity and approved. Overwhelmingly, these including juvenile justice facilities related records may be confidential and commenters asserted that, in proposing within the ‘‘incarcerated student’’ pointed out that individuals may be in not to require institutions to obtain definition. Finally, this commenter also a juvenile facility voluntarily or without approval for all direct assessment noted that the Department did not a court requirement. The commenter programs, the Department is acting include any evidence or studies from suggested that privacy concerns call for contrary to the intent of Congress as appropriate prison education experts on the Department to reconsider adding expressed in section 481(b)(4) of the how this change would clarify the ‘‘juvenile justice facility’’ to the HEA and exceeding its statutory availability of Pell Grants to students in incarcerated student definition. This authority. In the opinion of the juvenile justice facilities. commenter further noted that the Free commenters, this will result in Discussion: We proposed this new Application for Federal Student Aid diminished oversight protection, which definition to clarify that a person (FAFSA) does not include a question currently ensures that new direct incarcerated in a juvenile justice facility about incarceration and assumed that assessment programs receive adequate is not considered to be incarcerated in the Department would seek such scrutiny and that each new eligible a Federal or State penal institution, information. The commenter asserted direct assessment program is approved regardless of who operates or has that continuing to exclude the phrase by the Secretary. One commenter jurisdiction over the facility. This would simplify the regulation and avoid further suggested the Department was definition clarifies that students excluding necessary exceptions. attempting to ‘‘rewrite statute through incarcerated in a juvenile justice facility Discussion: The changes to the regulation,’’ with another commenter continue to be eligible for Federal Pell definition of ‘‘incarcerated student’’ do offering that, ‘‘The Department does not Grants. We believe the commenter was not substantively change our current have the authority to grant the Secretary mistaken. These regulations do not practice. We revised this definition for discretion to approve some direct change or contravene the HEA. clarity and to ensure access to Federal assessment programs and not others,’’ Additionally, the Department is Pell Grants for those in a ‘‘juvenile while another commenter expressed the unaware of available research on the justice facility.’’ We do not believe this opinion that in proposing these changes, interpretation of this term and is merely revised definition requires access to the Department has acted without codifying current practice. confidential records or poses a privacy supporting evidence or basis in law.

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Conveying disagreement with the A few commenters, in addition to result in diminished oversight or Department’s position, expressed in the asserting that the Department has a undermine the integrity of the title IV, NPRM, that once an institution statutory obligation to approve each HEA programs. As we indicated in the demonstrates it can capably administer new direct assessment program, preamble to the NPRM, the Department a direct assessment program, there is expressed the belief that direct does not evaluate academic content or little risk that the same institution assessment programs have access to a academic quality of programs, but would not properly administer other separate financing model from other instead focuses its review of a direct direct assessment programs, a few types of credit-hour or clock-hour-based assessment program on the institution’s commenters noted that programs of all programs. This supports (in the opinion title IV aid administration in such types at the same institution, within the of the commenters) heightened programs. Institutions typically use same credential level, can vary in oversight of direct assessment programs, information provided by the Department quality and value, making it crucial for achieved through requiring institutions in response to their initial approvals to the Department maintain its oversight to obtain Department approval for each inform subsequent applications for responsibilities consistent with its such program. direct assessment programs. Thus, statutory obligations. One of those One commenter maintained that the multiple evaluations of direct commenters also took issue with the current regulations for determining assessment at the same institution often Department’s reasoning that, it ‘‘will direct assessment program eligibility results in the institution providing review the institution’s processes should be unaltered because direct nearly the same information for each related to title IV aid administration but assessment programs are exempt from subsequent program, and results in an will not evaluate the academic content limitations on written arrangements. approval process that yields little value or academic quality of programs, except The commenter explained that, per to students, the institution, or taxpayers. to confirm that an accrediting agency § 668.10(e), direct assessment programs Moreover, the Department’s regulations has specifically approved each are exempt from the restriction that under § 668.10(a)(5) will still require an program,’’ arguing that the Department’s limits the percentage of learning institution’s accrediting agency to accreditation regulations, published in resources that are provided by other review and approve each direct November 2019, weaken the accreditor’s entities, making the risks of inadequate assessment program and an institution’s review and allow an accreditor’s senior oversight associated with such programs credit or clock hour equivalency staff, rather than the accreditor’s greater than they might otherwise be. In methodology and institutions will be appointed board of commissioners, to the commenter’s opinion, under the required to report new direct assessment review, approve, and monitor Department’s proposed regulations an programs to the Department in substantive changes to direct assessment institution that has already received accordance with new § 600.21(a)(12), programs. approval for a direct assessment which will provide the Department with program at a given credential level an opportunity to ensure that such The same commenter offered that the would be able to stand up subsequent programs have been appropriately Department failed to consider its OIG direct assessment programs at the same reviewed and approved by an audits of accreditors of competency- credential level where up to 100 percent institution’s accrediting agency. based education programs that of those programs is offered by outside The commenter who asserted that the demonstrated why accreditors cannot be entities without review from the Department did not consider the solely responsible for the evaluation and Department regarding the program’s findings of its OIG when proposing the oversight of direct assessment programs. eligibility. changes to the direct assessment In the opinion of the commenter, the Discussion: We disagree with the programs is incorrect. In developing Department further failed to consider commenters who assert that the proposed regulations relating to direct the OIG audits during the negotiated Department did not have adequate legal assessment programs, we considered the rulemaking or ask for public comment authority to require the Department’s findings in several of the Inspector on how the audit findings may approval of a direct assessment program General’s audits 9 over the past decade demonstrate whether accreditors’ senior only when the institution adds such a relating to direct assessment programs. staff alone will be able to adequately program for the first time, and when the In those audits, the Inspector General assess the administration and institution offers the first direct made a number of recommendations effectiveness of direct assessment assessment program at each level of that have already been adopted by the programs without the Department’s offering than what was previously Department’s Office of Postsecondary review, as mandated by statute. Finally, approved. Section 481(b)(4) of the HEA Education and FSA, including ensuring referencing case law (Connecticut Light states that ‘‘In the case of a program that School Participation Division & Power Co. v. Nuclear Reg. Comm., 673 being determined eligible for the first managers are fully informed of issues F.2d 525, 528 (D.C. Cir. 1982)), the time . . . such determination shall be raised during the review of direct commenter suggested that, the made by the Secretary before such assessment program applications, Department has failed to provide an program is considered to be an eligible accurate picture of the reasoning that program.’’ While Congress clearly 9 ‘‘Direct Assessment Programs: Processes for has led to the proposed rule, resulting intended for the Department to Identifying Risks and Evaluating Applications for in interested parties being unable to undertake an evaluation and approval of Title IV Eligibility Need Strengthening to Better Mitigate Risks Posed to the Title IV Programs,’’ comment meaningfully upon the an institution’s offering of direct published September 30, 2014; ‘‘The Higher agency’s proposals. The commenter assessment, whether or not the Learning Commission Could Improve Its Evaluation additionally cited Portland Cement requirement applies on a program-by- of Competency-Based Education Programs to Help Ass’n v. Ruckelshaus, 486 F.2d 375, 393 the Department Ensure the Programs Are Properly program basis is not prescribed and, Classified for Title IV Purposes,’’ published (D.C. Cir.1973) for the proposition that, therefore, left to the Department. September 30, 2015; and ‘‘The Western Association ‘‘It is not consonant with the purpose of We also disagree that requiring the of Schools and Colleges Senior College and a rulemaking proceeding to promulgate Department’s approval only for the first University Commission Could Improve Its rules on the basis of inadequate data, or direct assessment program that an Evaluation of Competency-Based Education Programs to Help the Department Ensure Programs on data that, [in] critical degree, is institution offers (or the first such Are Properly Classified for Title IV Purposes,’’ known only to the agency.’’ program at a new level of offering) will published August 2, 2016.

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monitoring and evaluating accrediting Comments: One commenter objected approved direct assessment model for agency approvals of direct assessment to the use of the word ‘‘abilities’’ in the the institution. programs, and referring concerns about definition of ‘‘direct assessment,’’ Discussion: We thank the commenter accrediting agency reviews of direct arguing that using the word ‘‘abilities’’ for the suggestion regarding a two-tier assessment programs to the Office of in this context poses new risks to process for the Department’s approval of Postsecondary Education’s students and their privacy. The direct assessment programs. Though we Accreditation Group. The Department commenter explained that abilities decline to adopt the suggestion, the also included a new provision in these might include psychological process for the Department’s evaluation regulations, in consensus with information that is confidential and of an institution’s first and subsequent negotiators, to require institutions to governed by healthcare information direct assessment programs will proceed address how they avoid paying title IV, protection laws. Citing the need to in a similar fashion. An institution’s HEA program funds for credit that might legally protect psychological abilities first application for direct assessment, be given students on the basis of prior data in ways that might differ from the or its first application at a new level of learning or life experience in their direct information protection protocols offering, will undergo the Department’s assessment applications. We agree with applicable to other education data, the full approval process and the institution the OIG that payment of title IV aid for commenter suggested that the potential will not be permitted to disburse title credit earned through prior learning consequences be provided for public IV, HEA program funds until it has remains an ongoing risk that requires review and comment before the received the Department’s approval. ongoing oversight and mitigation. We Department moves to make the change Subsequent programs at the same recognize that institutions offering final. level(s) of offering will be reported to direct assessment programs may use Discussion: Nothing in the the Department under new financing models that differ from credit Department’s regulations would permit § 600.21(a)(12), and this reporting hour versions of the same program; an institution to violate applicable process will require the institution to however, we believe that the risks privacy laws, including healthcare laws, submit to the Department a description associated with these models can be with respect to a student’s psychological of the program and evidence that its addressed in the institution’s first direct or cognitive abilities. The word accrediting agency has approved the assessment application and in ‘‘abilities’’ in these regulations refers program and the institution’s requirements for institutions to report only to the things that a student must methodology for determining credit or subsequent direct assessment programs demonstrate that he or she can do clock hour equivalency for the program. to the Department. Furthermore, many related to the competencies required in We also appreciate the commenter’s competency-based programs, including a direct assessment program. suggestion regarding a requirement for direct assessment programs, use Changes: None. an institution to notify the Department and seek approval for changed processes subscription-based financing models Comments: A few commenters, one of or policies for the institutions direct that are specifically addressed by the whom asserted that the NPRM failed to assessment offerings. Though we believe Department’s proposed completion- discuss reasonable alternatives, offered that it would be too burdensome to based approach to disbursement of title modifications they urged the implement this suggestion any time IV, HEA program funds in subscription- Department to consider. One of these such a change occurred, the Department based programs. The Department plans proposed the creation of a two-tier will evaluate such changes, and all to continue monitoring use of the application process. The first tier would regulatory requirements for an subscription-based disbursement system include all new programs and apply all institution’s direct assessment to determine whether additional of the application elements in the programs, during an institution’s changes are needed in the future. evaluation; the second tier would Finally, the commenter who indicated application for recertification. include additional programs offered at There was no discussion during that direct assessment programs are the same credential level, requiring only negotiated rulemaking regarding a exempt from the restriction on the descriptions of the program under requirement for accrediting agencies to percentage of learning resources that are consideration and an explanation of the use of C–BEN’s Quality Framework provided by other entities is correct, but how learning objectives are set and for Competency-Based Educational we disagree that this exemption should evaluated, without the necessity for the Programs 10 (Quality Framework) when prevent the Department from making institution to provide information on approving new direct assessment the changes to the regulations agreed the methodology for determining an programs, and we do not feel it is upon by the negotiating committee. The equivalent number of credit or clock appropriate to introduce new commenter argues that the Department hours. Another suggested modification requirements for accrediting agencies at will have no oversight over subsequent to what was proposed in the NPRM was this stage given that the Department has direct assessment programs added by an that the Department require accreditors already published its final rule on institution after its initial application, to utilize the Competency-Based accreditation. Additionally, though the but that is inaccurate. Institutions will Network (C–BEN) Quality Framework Quality Framework includes helpful still be required to submit materials for Competency-Based Educational principles for the design and related to their direct assessment Programs in evaluating direct implementation of high-quality programs through the Department’s assessment programs so that both competency-based programs and we reporting process under § 600.21(a)(12). students and policymakers can be encourage institutions to consider these This reporting requirement will permit confident the program has been principles when planning to offer the Department to continue to monitor designed to meet quality standards. A competency-based education programs, the types of direct assessment programs further recommendation was the the principles may not be appropriate that are offered by an institution after its inclusion of additional language in the for all accrediting agencies in all initial application and take action if it regulation which would require determines that there are irregularities institutions to notify the Department 10 www.cbenetwork.org/wp-content/uploads/ with a particular program or programs. and seek approval for substantively 2018/09/Quality-Framework-for-Competency- Changes: None. changed processes or policies within the Based-Education-Programs-Updated.pdf.

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circumstances and imposing them on all Discussion: We disagree with the for the usage of the word in each accrediting agencies could undermine commenters who asserted that it is not section. the autonomy of those entities and their necessary for the Department to require Changes: None. oversight of academic quality, which is an institution to clearly describe its Comments: One commenter offered protected by the HEA. Therefore, we methodology for developing credit or that, while the proposed regulation decline at this time to include a clock hour equivalencies for its direct states that title IV, HEA funds cannot be requirement for accrediting agencies to assessment programs. This requirement utilized for the portion of the direct use the standards described in the is vital to the integrity of the title IV, assessment program that the student is Quality Framework when approving HEA programs because the requirements awarded based on prior learning, it does competency-based education programs, for calculating awards and disbursement not define what activities comprise including direct assessment programs. amounts under those programs is still prior learning. In the opinion of the Changes: None. performed using credit or clock hours. commenter, this leaves the proposed Comments: A few commenters Though we acknowledge that the credit regulation open to a variety of indicated concerns over the proposed hour is an outdated method of interpretations and may result in requirement for an institution to measuring a student’s workload based miscommunication and confusion establish a methodology to reasonably on seat time and that developing an between the Department and equate each module in the direct equivalency system involves institutions. The commenter proposes that ‘‘prior learning’’ and ‘‘prior learning assessment program to either credit or administrative burden, there is currently assessment’’ be defined as follows: clock hours. Expressing disappointment no widely-accepted alternative ‘‘currency’’ for learning and workload.11 • Prior Learning—Learning obtained at the Department’s continued reliance outside of an academic context on clock or credit-hour equivalencies, Without such an alternative, the Department will continue to use credit (experiential, personal, professional, one of those commenters stressed the workplace, etc.) that has not been very nature of direct assessment or clock hour equivalencies in order to ensure that an institution’s choice of a officially awarded as academic credit. programs in utilizing direct assessment • Prior Learning Assessment—is the of student learning or recognizing the unit of measurement for a direct assessment program does not result in process that evaluates and recognizes direct assessment of student learning by prior learning and awards the others in lieu of credit or clock hours as an unfair or inflated determination of a student’s eligibility for title IV, HEA appropriate level of academic credit the measure of student learning, and based on established institutional/ offered that the Department’s focus on funds. Such a ‘‘currency’’ is also important in enabling students to organizational standards. Assessment of equating each module in the direct prior learning may occur before and assessment program to either credit or transfer credits between institutions. The Department encourages during (concurrently) credit bearing clock hours is inconsistent with the institutions and accrediting agencies to (title IV eligible) course and programs. HEA, which merely requires that any consider options for measures of student Discussion: We thank the commenter such assessment is consistent with the learning and workload that do not rely for the suggestions regarding how to accreditation of the institution or on credit hours but can be widely define prior learning in the context of program utilizing the results of the accepted and understood by the direct assessment regulations. When assessment (20 U.S.C. 1088(b)(4)). The practitioners and adopted by accrediting the term ‘‘prior learning’’ is used in same commenter further asserted that agencies. If the use of such a measure these regulations, it means learning that requiring institutions to craft, becomes prevalent in postsecondary occurred prior to the student’s implement, and explain methodologies education, the Department will consider enrollment at the institution or in a for creating credit or clock hour allowing institutions to rely upon that context other than the curriculum in equivalences is administratively measure for competency rather than which the student is enrolled (for burdensome and shifts the program’s requiring an equivalency to credit or example, the student’s workplace or focus away from student learning in clock hours. another academic institution). Prior favor of seat time. Though we agree with the commenter learning includes learning associated Another commenter suggested that who indicated that it was possible that with the transfer of credit from a prior the use of the term ‘‘module’’ in the use of the term ‘‘module’’ in this institution, since the credits earned § 668.10(a)(3) as the period measure of section could be conflated with the through transfer cannot be included in learning in direct assessment programs different usage of the term in the R2T4 a student’s enrollment status for is confusing since it is already used in regulations under § 668.22, we decline purposes of calculating eligibility for § 668.22, and in the NPRM further to make a change in this case. We title IV, HEA assistance. We agree with limited to describe courses in standard believe that replacing the word the commenter’s definition of ‘‘prior and nonstandard-term programs in ‘‘module’’ would require the use of learning assessment,’’ which means a relation to the return to title IV funds. another term that may result in a process for evaluating and recognizing In order to avoid this confusion the substantively different approach in the prior learning and awarding the commenter recommended that the direct assessment regulations. Because appropriate level of academic credit Department remove the term ‘‘module’’ we did not discuss such an approach based on established institutional/ in the direct assessment context and with the negotiating committee, nor organizational standards. We also agree instead require in § 668.10(a)(3) that include discussion of the issue in the that assessment of prior learning may ‘‘An institution must establish a NPRM, we decline to make the change occur prior to and during a student’s methodology to reasonably equate each at this time. Additionally, we do not enrollment at the institution. of its stated measures of learning in the believe that any confusion regarding the Changes: None. direct assessment program to either word ‘‘module’’ will undermine the Comments: One commenter suggested credit hours or clock hours . . .’’ (85 FR requirements in either § 668.10 or that competency-based education, as a 18698). This change, the commenter § 668.22 because of the different context less mature field, may not be ready for argues, would not alter the substance expansion. However, the commenter and meaning of the amendments in any 11 www.luminafoundation.org/files/resources/ indicated that it is important to make way. cracking-the-credit-hour.pdf. data available that might help

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researchers, practitioners, and others § 600.20(d)(1)(ii)(A) is not required to assistance starting new and innovative understand the field better and provide obtain approval to offer the additional programs. research and information that help program unless notified by the Secretary Discussion: The Department thanks future efforts by the Department or at least 30 days before the first day of the commenter for the suggestion. The Congress to enable innovation while class that the program must be Department has already proposed protecting students and taxpayers. The approved. The commenters stated that important regulatory flexibilities commenter offered several suggestions these current regulations create an without jeopardizing proper oversight. for the Department to collect and share unnecessary burden, make it more Further regulatory changes would risk data about direct assessment programs difficult to quickly respond to the needs violating the consensus agreement and that have been approved directly by the of employers, and duplicate the weakening important oversight of Department, including publication of a oversight of programs by State program reviews. The Department list of institutions that have been authorizing agencies and accrediting currently considers the past record of an approved for direct assessment and agencies. The commenters also institution in these reviews but agrees collecting information about tuition, supported the addition of provisions that some administrative processes retention rates, and completion rates for requiring that the Department take could be improved to provide more each direct assessment program. The prompt action on any materially timely responses, better communication, commenter also suggested complete application under § 600.20(a) and more consistent decisions. The disaggregating and identifying these or (b). Two commenters also noted that Department has already evaluated what programs on the College Scorecard. The it is very difficult for institutions to be it would take to make such commenter recommended against expected to wait until 30 days prior to improvements and hopes to implement requiring the collection or sharing of the start of the program to advertise or them soon but declines to make further data related to course-based enroll students in the program. One regulatory changes as the commenters competency-based education programs commenter also underscored the suggest. The Department also thanks the that do not require Department approval benefits of reduced redundancy while commenters for the suggestion on given the potential for increased burden. supporting the effort to minimize the streamlining processes in regard to Discussion: We thank the commenter impact of delays by the Department in COVID–19, but we believe the impacts for their suggestions regarding how to the program approval process. COVID–19 has on schools will not improve data on direct assessment Discussion: The Department agrees necessarily result in a larger number of programs and institutional with the commenters. Removing institutions that are placed on accountability. We believe that the § 600.20(d)(1)(ii)(B) will ease the provisional status. commenter’s suggestion of publishing a Changes: None. process of approving new programs and Comments: Several commenters list of approved direct assessment allow institutions to offer new programs programs and the institutions that offer disagreed with the Department’s in a timely manner to meet both student them is reasonable and we will evaluate contention that the changes in § 600.20 demand and workforce needs. The whether it is possible to post a public restore functions related to program Department agrees that the current list of such programs. However, because quality to accrediting agencies and State provision creates significant uncertainty the number of direct assessment authorizing agencies. Instead, these about whether an institution will be programs remains small, we do not commenters say that the approval allowed to offer a program until the believe that we should collect data for process relates to the requirements program has nearly begun, without a such programs exceeding what is related to access to title IV aid. tangible benefit in terms of oversight. It collected for other types of programs, Therefore, the commenters say, is not reasonable to expect institutions nor do we currently intend to provide institutions should be required to report to either enroll students in a program data on the College Scorecard their intent to establish new programs to that may not be allowed to operate or specifically related to direct assessment protect students and taxpayer funds. expect students to wait to enroll in these programs. We will consider doing so in The commenters also assert that the programs until 30 days prior to the start the future if the number of direct elimination of the list of elements the of the program. The Department seeks to assessment programs increases Secretary will consider when reviewing conduct proper oversight in a timely substantially. an application under this section was We agree with the commenter that manner without undue impact to not part of the consensus language nor additional data is not needed for course- institutions or students. As many was it explained in the NPRM and based competency-based programs. commenters noted, this oversight role therefore the change should be reverted Because there is no consistent statutory may also be duplicative of what is to the consensus language in the final definition of a competency-based overseen by accrediting agencies and rule. program that does not use direct State authorizing agencies. Discussion: The Department disagrees assessment, the Department does not Changes: None. with the assertions made by the feel that it is practical or useful to Comments: One commenter commenters. While they are correct that attempt to collect data about such encouraged the Department to consider the provisions of § 600.20 broadly relate programs, since the data would reflect a streamlining the proposed regulations to the Department’s oversight of access wide range of programs, many of which and processes for institutions on to title IV aid, the overwhelming have in common only the competency- provisional status. The commenter majority of these provisions are left based learning modality. suggested the Department either modify unchanged. Institutions continue to be Changes: None. the regulations or use its discretion to required to notify the Secretary of their streamline approvals for institutions intent to offer an additional educational New Program Approval (§ 600.20) with a strong record of compliance and program. The proposed regulations Comments: Many commenters stability. The commenter emphasized simply require the Department to act supported the removal of that the COVID–19 crisis may force an promptly and remove restrictions that § 600.20(d)(1)(ii)(B), which provides increasing number of institutions to be unnecessarily prevent an institution that an institution that is submitting a placed on provisional status and that from quickly developing new programs notice in accordance with such institutions may need quick in response to requests by students,

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employers, or others. It is to the benefit model addresses the unique nature of develop the talent needed to address of both students and institutions that competency-based and other self-paced economic and social challenges. The there be certainty well in advance that programs of study and further commenter expressed that shifting to a a planned program will be able to encourages institutions of higher more transparent, outcomes-focused operate. The Department intended that education to innovate by creating accountability system depends on the the amendatory instructions in the learning modalities that allow students ability of existing and new entities to NPRM would be consistent with the to learn at their own pace while access and use better data and consensus language adopted during the remaining eligible for title IV, HEA emphasized the importance of equity negotiated rulemaking. The amendatory program assistance. Another commenter and quality in any such system. instructions that were published, opined that the proposed subscription- Discussion: We agree with however, contained errors, which the based system supports postsecondary commenters about the importance of Department has corrected in this final access and affordability for working using data and evidence in the rule. The description of the changes to adults. One commenter stated that the Department’s oversight of subscription- § 600.20 in the preamble to the NPRM proposed subscription-based model based programs, and that such accurately reflected the consensus balances flexible timelines for students information is an important component language. with completion requirements that of an outcomes-based accountability Changes: None. maintain the integrity of the title IV, framework. To those ends, the Comment: One commenter noted that HEA programs. Another commenter was Department plans to monitor which the amendatory language appeared to supportive of the changes in timeframes programs use the subscription-based contain drafting errors or changes that associated with disbursements for model and will evaluate student-level were not appropriately described, which subscription-based programs and data, such as disbursement amounts, differed from consensus language. The indicated appreciation for the ability for debt levels, and withdrawal rates for commenter urged the Department to institutions to offer early disbursements students who are enrolled in such reopen the NPRM for additional in such programs, asserting that the programs. This evaluation will take the comment. The commenter noted that model’s completion requirements would place of the Department’s CBE the proposed amendatory language be essential to encouraging and Experiment, which will end on June 30, would delete current supporting students to complete their 2020. The Department will also publish § 600.20(d)(1)(ii)(E), a change that they programs on time. Another commenter a final report on the CBE Experiment would oppose on the basis that the supported the changes because it would that will offer more information to the elements in that section are important permit self-paced coursework to ‘‘float’’ public about the results of that for any approvals the Secretary may beyond the end of a term until a student experiment related to subscription- consider. The commenter urged the masters the learning objectives for that based programs. Department to maintain current coursework. Several commenters Changes: None. § 600.20(d)(1)(ii)(E) (which is expressed support for proposed Comments: One commenter, while redesignated as § 600.20(d)(1)(ii)(D)) and definition of a ‘‘full-time student’’ under acknowledging appreciation for the revise the reference in that section to § 668.2 as it relates to subscription- Department’s attempt to balance the paragraph (d)(1)(ii)(B), which was based programs; one of those subscription-based model’s completion deleted in the consensus language, to commenters indicated that it made requirements with the likelihood that instead refer to paragraph (d)(1)(ii)(C), sense to prevent a student from some students could struggle to make which relates to the Secretary’s approval receiving a disbursement based on progress during a specific period, of an additional educational program. retaken coursework in a subscription- indicated concern that the lack of Discussion: The Department based program, and another stated that alignment between disbursements and appreciates the commenter’s close to do otherwise would be nonsensical. payment periods could cause confusion review of the proposed amendatory Discussion: The Department thanks amongst students, families, and (at least language. We did not intend to deviate the commenters for their support. initially) institutions. from the consensus language of § 600.20 Changes: None. Discussion: We disagree that the and identified and discussed each of the Comments: Two commenters, while subscription-based disbursement model intended revisions in the preamble to supportive of the Department’s is excessively complicated. Though the the NPRM. We agree that the proposed proposed regulations regarding model does require an institution to amendatory language contained errors, subscription-based programs, urged the carefully monitor a student’s progress in especially related to the revised Department to rely more heavily on data order to ensure that he or she does not numbering of paragraphs in and evidence to oversee such programs. receive subsequent disbursements of § 600.20(d)(1) and believe that the One of those commenters noted that the title IV, HEA program assistance, each commenter’s suggested revisions are Department has not yet produced any institution has the ability to clearly reasonable. findings from its CBE Experiment and express to students the number of Changes: We have revised the asked the Department to produce the credits (or the equivalent) that must be amendatory language to reflect the statutorily-mandated reports detailing completed by a given date in order to consensus language, and also revised the findings of its experiments.12 This receive aid in the future. This facet of the reference in redesignated paragraph commenter also encouraged the the subscription-based disbursement (d)(1)(ii)(D) to refer to paragraph Department to improve the collection of model has already been successfully (d)(1)(ii)(C). data from participating institutions in implemented for many non-term the future so that CBE experiments will programs under the existing Subscription Period Disbursement be more useful in the future. The other disbursement system for such programs. (§§ 668.2 and 668.164) commenter emphasized the importance Changes: None. Comments: Many commenters of focusing on student outcomes to Comments: Several commenters asked supported the Department’s definition evaluate institutions and their impacts the Department to allow the of a subscription-based program model on students and the nation’s ability to subscription-based model to be used for within § 668.2. Two commenters programs that are not offered using indicated that the subscription-based 12 experimentalsites.ed.gov/exp/approved.html. direct assessment. One of those

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commenters asked that the Department the model from being effectively scaled student from taking on too much debt if extend the ability to use the at most institutions given the cost of the student is unable to complete subscription-based disbursement model incorporating the model into existing coursework in the program. to any self-paced postsecondary technology supporting the Finally, use of the model would still program, arguing that doing so would administration of title IV, HEA program be limited to institutions that charge provide for greater innovation while funds. students on a subscription basis, a still tying access to Federal aid with Moreover, we did not intend to practice which is rare and primarily student achievement. The commenter hamper or limit flexibility in used by competency-based programs. suggested that such a change would disbursement of title IV, HEA assistance The Department will evaluate the likely increase interest among for institutions that had previously been effectiveness of, and monitor risks institutions and software vendors to participants in the Department’s CBE associated with, the model as it begins support innovation by using the new Experiment, but recognize that many of to be used more broadly and will make model. those institutions measure student any changes necessary to protect Two commenters expressed a related progress using credit hours rather than students and the integrity of the title IV, concern about institutions that had been direct assessment, which would have HEA programs. participating in the Department’s CBE precluded them from using the Changes: We have removed the words Experiment and asked if such subscription-based disbursement model ‘‘direct assessment’’ from the first institutions offering credit-hour CBE under the proposed rule. We believe sentence in the definition of programs would transition following the that expanding the use of the ‘‘subscription-based program.’’ end of that experiment, which had subscription-based model to any Comments: One commenter requested allowed institutions to use a form of this institution using subscription pricing a correction to the definition of a model on a limited basis. will permit institutions with CBE subscription-based program by adding One commenter, while supportive of programs using such pricing to ‘‘(or the equivalent)’’ following ‘‘credit the Department’s proposed regulations transition more easily into full hours’’ in the first sentence of the for subscription-based programs, urged regulatory compliance following the end definition paragraph. The commenter the Department not to expand the of the CBE Experiment. contends this would align the first definition or weaken the flexibilities Finally, the Department believes that sentence to the third and last sentences provided by such programs. The the subscription-based model includes of the same paragraph where the commenter noted that subscription- safeguards for both students and parenthetical already exists. based systems are not without risk to taxpayers that limit the risk of Discussion: We agree with the students, since in such programs expanding the use of the model more commenter that referring to the students are effectively committed to a broadly. The model protects taxpayers equivalent of credit hour in the single price based on the number of by requiring students to complete specified location would improve the courses they expected to complete at the courses or competencies before consistency of the definition. start of the semester, and this means receiving subsequent disbursements of Changes: We have added the words that students who do not complete their title IV, HEA program funds. The model ‘‘(or the equivalent)’’ following the programs quickly could overpay for an also improves upon the existing non- words ‘‘credit hours’’ in the first education that the student does not term disbursement system for students sentence of the definition of benefit from. The commenter by allowing students to switch between ‘‘subscription-based program.’’ emphasized that because tuition in full-time and less-than-full-time Comments: One commenter expressed subscription-based programs will be versions of a program in order to limit support for the Department’s decision to largely financed with student debts, the number of courses they are required provide a student with some control students who do poorly in subscription- to complete in order to receive over the pace of learning in his or her based programs could be at risk. subsequent disbursements of title IV, subscription-based program by selecting Discussion: The Department agrees HEA program funds. a program version at a specific with commenters who argue that the We share commenters’ concerns that enrollment status. The commenter subscription-based method for students in subscription-based programs indicated that allowing a student to disbursing title IV, HEA program could quickly accrue debt while falling change to different program versions no assistance should be extended to behind in their coursework. This risk more often than once per year supports programs other than direct assessment was specifically why we designed the student flexibility and results in a programs. The Department had model to require students to complete manageable level of administrative originally intended to limit the coursework before receiving subsequent burden. Conversely, another commenter applicability of those provisions to disbursements of title IV, HEA program asserted that the Department had not direct assessment programs in order to funds. Institutions and students will provided sufficient justification for ensure that the disbursement method both have a strong incentive to act if a preventing students from switching was used only in programs offered by student finds a subscription-based between versions of a subscription- CBE. However, many CBE programs are program too challenging or fails to make based program no more than once per not offered using direct assessment and progress. Faced with the possibility of a academic year. would thus be prevented from using the student losing access to aid, an Discussion: The limitation on the subscription-based model. institution may provide additional number of times that a student is Commenters also make a strong assistance or resources to the student or permitted to switch between versions of argument that limiting the applicability encourage the student to transfer into a a subscription-based program was of the requirements to direct assessment version of the program at a reduced agreed upon by the Distance Learning programs would sharply limit the use of enrollment status better suited to the and Innovation subcommittee as a the model and would discourage student’s rate of progress. Similarly, the condition for the Department to waive software providers from creating student may decide to seek additional the requirement for an institution to technology that assists institutions in support or transfer into a different evaluate a student’s pace for satisfactory disbursing title IV, HEA funds using this program. In either case, the model’s academic progress purposes in a method. This, in turn, would prevent completion requirements prevent a subscription-based program. We believe

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that evaluating a student’s pace is different enrollment status a payment period, and when doing so unnecessary if the program requires a requirements. The commenter inquired must complete all the hours accrued for particular rate of completion in order for whether a student would be held that program before receiving a the student to continue receiving title accountable for incomplete credits subsequent disbursement of title IV, IV, HEA program assistance over time. associated with one enrollment level HEA funds. This condition is met if the after changing to a different enrollment Note that a student who transfers from subscription-based program both level and asked whether the Department a subscription-based program to a non- requires the student to maintain a would leave this to the discretion of term program, or a term-based program consistent enrollment status (e.g., half- institutional policy. that does not use subscription periods, time or full-time) and the student does To illustrate the question, the is not required to complete additional not regularly change that enrollment commenter sought the Department’s credit hours before receiving a status, which in turn would adjust the viewpoint on an example of a student disbursement in his or her new number of credits the student was making such a change. In the program. This includes cases in which required to complete before receiving commenter’s example, a full-time the student transfers from a subsequent disbursements. student has completed six subscription subscription-based version of a program Allowing a student to frequently periods, each of which is associated to a version of the same program that adjust enrollment status (e.g., by with 12 credit hours. Thus, the student does not use subscription periods. switching between versions of the same would be required to have completed at Changes: None. program) would mean that, without least 60 credit hours (12 credit hours Comments: One commenter asked requiring the institution to evaluate the multiplied by five terms, excluding the whether a student’s Pell Grant student’s pace toward completion of the first one that the student attended) enrollment status would need to be program, the Department would have no before receiving title IV, HEA assistance adjusted at the end of a subscription mechanism for ensuring that the student for a future payment period. However, period to exclude any coursework for completes his or her program in a timely at the end of the sixth payment period, which the student did not begin manner. We believe that the greater the student has only completed 52 attendance. The same commenter asked flexibility associated with the ability to credit hours. At that time, the student the Department to clarify whether a switch enrollment status would be offset switches to a half-time version of the student could begin coursework used to by the substantially greater complexity same subscription-based program. The establish the Pell Grant enrollment associated with measuring a student’s commenter asked whether the student status after the subscription period for pace for satisfactory academic progress would still need to complete eight more which the student was paid had ended. purposes. Therefore, the Department credit hours (more than the six hours Discussion: Normally, a student in a believes that not requiring pace associated with half-time enrollment term-based program is required to evaluations, but limiting students to status) before receiving another attend each class that the institution switching between versions of the same disbursement of title IV, HEA funds in uses to establish the student’s Pell Grant subscription-based program once per the next payment period. enrollment status under the Pell Grant year, is the most appropriate way to Discussion: In the situation described, regulations under § 690.80(b)(2)(ii). ensure that the student maintains an the student would be required to Similar to a student enrolled in a appropriate pace (in the judgment of the complete eight more credit hours before nonterm program, a student in a institution) toward program completion. receiving a disbursement at half-time subscription-based program is not Changes: None. enrollment status for the following required to attend all of the courses in Comments: One commenter asked payment period. Such a student would a payment period that comprise the whether a student enrolled in a then be required to complete a further student’s enrollment status. This is subscription-based program would be six credit hours (in addition to the eight because the Department presumes that required to complete credits associated credit hours needed to gain eligibility the student must attend a sufficient with a payment period that the student for the next disbursement) in order to number of classes or demonstrate a did not attend in order to receive receive the following disbursement of sufficient number of competencies in subsequent disbursements of title IV, title IV, HEA program funds for the order to earn the credit hours (or the HEA program assistance. payment period after that. equivalent) before receiving subsequent Discussion: A student in a Any time that a student begins disbursements of title IV, HEA program subscription-based program is not attendance in a payment period in a funds. required to complete credit hours (or the subscription-based program, the student Note that because a student in a equivalent) associated with a payment must complete the credit hours (or the subscription-based program is always period the student did not attend. In a equivalent) associated with that treated as having the same enrollment subscription-based program, the number payment period (except for the first status, there is also no need for an of credit hours (or the equivalent) that payment period that the student institution to establish a Pell Grant a student is required to complete accrue attends) before receiving title IV, HEA recalculation date under only for payment periods in which the program funds for the following § 690.80(b)(2)(i). student attends at least one day. If an payment period. When a student Changes: None. institution determines that a student did transfers between versions of the same Comments: Two commenters asked not attend a given payment period, the subscription-based program, the student the Department to clarify whether the credit hours (or the equivalent) must first complete the hours associated use of the subscription-based associated with that payment period with the student’s enrollment status in disbursement model will be optional or would not accrue toward the student’s the previous version of the program. required for an institution that offers a future completion requirements. Because the completion requirement in program that is billed by subscription Changes: None. a subscription-based program is based period. Both commenters requested that Comments: One commenter requested on the number of payment periods that an institution be given the option to use clarification regarding how a student a student has attended, a student in other disbursement methods—such as would switch between versions of the such a program may only change his or for standard term, nonstandard term, or same subscription-based program with her enrollment status at the beginning of nonterm programs—if the institution

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otherwise meets the requirements to use from a term-based or non-term program Definition of Weeks of Instructional those alternative disbursement methods. into a subscription-based program will Time (§ 668.3) One of those commenters asked that be treated like all other students who Comments: Commenters expressed institutions be permitted to continue first enroll in subscription-based overwhelming support for the using their current method for programs, i.e., they will not be required Department’s definition of a week of delivering title IV, HEA program funds to complete the credit hours (or the instructional time related to an while developing student-friendly plans equivalent) associated with the first academic year under § 668.3(a)(2)(ii) to to convert from one model to another payment period of their enrollment in include programs that use asynchronous and allowing software vendors to the program and will be required to coursework through distance education design, develop, and test the complex complete the appropriate number of or correspondence. Several commenters new disbursement model. The hours to receive subsequent acknowledged the Department’s efforts commenter argued that such flexibility disbursements thereafter. Note that to create a definition that accounts for would provide options for institutions students who transfer from one innovative non-traditional programs wishing to ‘‘teach out’’ students who subscription-based program to another that are offered asynchronously, were already receiving title IV, HEA at the same institution, including reflecting the unique nature of distance program funds using one of the existing transfers between versions of the same education modalities. Several disbursement systems. program, will not receive a ‘‘free’’ commenters also noted that while time Another commenter interpreted the continues to be an important factor in proposed definitions of the terms payment period when they transfer and must complete all the credit hours (or awarding and disbursing title IV, HEA ‘‘subscription-based program’’ and ‘‘full- program funds, the new definition was time student’’ to require institutions that the equivalent) that have accrued in the prior program before receiving a a step away from a rigid conception of use a subscription-based pricing model time-based, scheduled instruction, and a to also use the subscription-based model disbursement in the program to which the student transferred. positive step toward emphasizing for disbursing title IV, HEA program learning over time. One commenter also funds. The commenter disagreed with Changes: None. indicated that the new definition would this perceived approach, explaining that Comments: One commenter opposed provide clarity and transparency an institution could use subscription the requirement for a student to regarding regulatory thresholds for a pricing in a program that otherwise complete a specific number of credit week of instructional time. meets the requirements to be treated as hours (or the equivalent) in order to Discussion: The Department thanks a traditional term-based program. The receive subsequent disbursements of the commenters for their support. commenter recommended that the title IV, HEA program funds in a Changes: None. Department allow an institution the Comments: One commenter indicated flexibility to choose the type of subscription-based program. The commenter also contended that that changing the definition of ‘‘a week disbursement method that best suits it of instructional time’’ is not necessary, institutions using innovative learning even if it uses a subscription pricing because accrediting agencies are models rarely originate single-term model. responsible for the content of loans, and that the requirement to make Discussion: The Department views the instruction. use of the subscription-based model for two equal disbursements of a single- Discussion: We agree that accrediting disbursing title IV, HEA programs funds term loan is difficult to understand and agencies have authority over as entirely optional. All programs that results in a frustrating student instructional quality at postsecondary meet the requirements for the experience just prior to a student’s institutions. However, we do not believe subscription-based disbursement model completion of a program. The that such authority precludes or would also be permitted to use the commenter recommended that the obviates the need for changes to the existing framework for disbursing funds Department allow one disbursement of definition of a week of instructional in a non-term program. Additionally, if a single term loan for single term loans time. a subscription-based program also meets with loan periods exceeding four and a Changes: None. the requirements for a term-based half months in a subscription-based program—for example, students are program. Written Arrangements at Domestic Institutions (§ 668.5) required to begin and end all courses or Discussion: We appreciate the competencies within the term start and comments and the recommendation but Comments: A few commenters end dates—the institution can disburse do not plan to change requirements supported the proposed changes to funds using standard terms or non- under the Direct Loan regulations, written arrangements because they believe the changes will promote standard terms (as applicable) instead of because those regulations were not innovation and workforce the subscription-based format. discussed during negotiated rulemaking, When the final rule is effective, an responsiveness. One commenter said nor published for comment in the institution that wishes to adopt the the changes will provide students with NPRM. Additionally, the completion subscription-based format may ‘‘teach access to more high-quality programs. requirements are integral to the out’’ students who had previously been Another commenter said the changes provided aid under the existing term- subscription-based disbursement system will align the needs of graduates with based or non-term disbursement and help to ensure that students are those of employers and allow systems. The institution would then be making adequate progress in their institutions to offer timely, relevant permitted to begin enrolling new programs. The requirements were educational program offerings they may cohorts of students using the agreed upon by both the Distance be unable to provide on their own, subscription-based format. An Learning and Innovation subcommittee allowing them to better attract and institution could also choose to and the full negotiating committee, and retain students. One commenter withdraw students from their term- we do not plan to eliminate those supported the proposal, citing an based or non-term programs and enroll completion requirements for students in improved ability for employers to the students under the subscription- subscription-based programs. engage with institutions to reduce skills based model. Students who transfer Changes: None. gaps and personalize learning.

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Discussion: The Department considering the COVID–19 pandemic. program design. Another commenter appreciates the support for the proposed Instead, the Department sees written also opposed the latter provision citing changes. arrangements as a tool that can provide their institution’s shared governance Changes: None. more opportunity for students model. One commenter suggested that Comments: Many commenters (especially for the groups or in the faculty support must be a prerequisite to supported the consensus language, circumstances cited by commenters), any academic or administrative change including the requirement in both because even the most well-resourced and believed that the Department is current regulation and the proposed institutions may not be able to provide taking away the opportunity for faculty regulation that an ineligible institution every conceivable course or and staff to be involved in or organization may provide up to 25 instructional resource. In fact, many administrative changes. percent of a program (or up to 50 well-resourced institutions struggle to Discussion: The Department agrees percent with accrediting agency keep up with the latest practices of their that faculty perform an important role in approval). Several of these commenters students’ future employers and written any institution, but strongly disagrees urged the Department not to go beyond arrangements can help. Such tools can, that faculty should have veto authority the 25 percent and 50 percent limits of course, be misused and the over virtually every academic or because doing so could pose risks to Department encourages accrediting administrative decision. Institutions use students and taxpayers, and particularly agencies to support written written arrangements to benefit from disadvantaged groups of students, arrangements where they offer benefits outside expertise, to better align a especially if an outside entity could to students, but be wary of them if they program with workforce needs, or for provide more than half of a program. merely serve as a lifeline to institutions other purposes. The Department thanks They stated in various ways that going that could not otherwise meet the the commenter for supporting this goal above 50 percent would risk, or outright accrediting agency’s requirements for but notes that alignment with workforce permit, institutions to lend their fiscal and administrative capacity (or needs can be achieved in different ways, accreditation or title IV eligibility status other standards) under § 602.16. including ways that are recommended to others. One of these commenters However, we agree with commenters by expert advisory boards that may have worried that the motivation for abuse who noted that the proposed language, more direct experience in the workforce could be more acute given potentially which streamlines approvals but and better understand contemporary declining revenues during and after the maintains the 25 and 50 percent limits, needs. To achieve this goal, many COVID–19 pandemic if the Department was the product of an extensively institutions understandably wish to act went beyond 25 and 50 percent limits. discussed consensus agreement and, as quickly in such cases for the benefit of These commenters cited discussion at a result, the Department declines to their students. Institutions may be negotiated rulemaking, including make changes. hamstrung if they must ask permission negotiators’ rejection of proposals that Changes: None. from different parties. Institutions may would have allowed institutions to go Comments: One commenter was use traditional governance models. beyond these limits. One of these generally supportive of the provisions in However, the Department sought to commenters suggested that the current this section, but opposed the 50 percent clarify that institutions may determine limit of 50 percent would allow for cap and suggested at least moving it to the level of faculty input that should be sufficient flexibility for institutions 75 percent, believing the Department is provided on decisions relating to while ensuring they pass accountability not sufficiently promoting innovative written arrangements. The Department measures. workforce partnerships, especially given disagrees with the commenter’s Discussion: The Department the COVID–19 pandemic’s impact on suggestion that the proposed rule appreciates the support for consensus the economy. affirmatively takes away the opportunity language from these commenters and Discussion: As noted elsewhere in for faculty and staff involvement in acknowledges concerns about written this section, the Department would have administrative changes due to the arrangements, especially if the 25 and preferred greater flexibility for diversity of existing governance 50 percent limits were lifted. This topic institutions to use written arrangements arrangements. received extensive discussion during and believes such allowance could have Changes: None. negotiated rulemaking, both from been used responsibly. However, we Comments: Several commenters negotiators and subcommittee members. agree with commenters who noted that related their concern about written The Department agrees that using the proposed language, which arrangements to concerns about the written arrangements for all or nearly all streamlines approvals but maintains the extent to which institutions utilize of a program could raise questions about 25 and 50 percent limits, was the online program managers (OPM) or which entity confers the credential. product of an extensively discussed other similar third parties that assist Anything beyond 75 percent may trigger consensus agreement and so the institutions with various functions not restrictions from accrediting agencies Department declines to make changes. related to the actual provision of who require the institution conferring Changes: None. academic instruction. One commenter the credential to deliver at least 25 Comments: One commenter stated that the exclusion of issues percent of the program. While the supported the provisions of § 668.5(f) related to OPMs from this rulemaking consensus agreement would not allow that clarify the ability of institutions has prevented proper oversight of institutions to go beyond 50 percent, the utilizing written arrangements to modify distance education programs, but Department maintains that written their curriculum to meet workforce generally supported the addition of arrangements beyond 50 percent needs, but opposed the provisions that language to clarify how to calculate the theoretically could be used responsibly. clarify the ability of institutions to make percentage of a program that is part of The Department disagrees with the governance or decision-making changes a written arrangement. This commenter implication from many commenters that as an alternative to faculty control or believed that agreements with OPMs written arrangements are somehow approval. This commenter argued that covering issues such as course inherently dangerous for students or advisory boards should not have greater development, instructor training, and that the risk for abuse is greater for authority than faculty and that faculty student recruitment should be treated as disadvantaged groups of students or expertise should be used to inform written arrangements because they are

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distinct from other types of agreements premise that written arrangements relates to burdensome reporting such as food service where the should only be for functions where the requirements, the requirement for a institution may not have expertise. The institution would not have expertise, third-party quality assurance entity to commenter opposed tuition-sharing such as food service. The diversity of oversee program outcomes (in addition arrangements as being a source of risk. institutional expertise is one reason the to the accrediting agency), and other One commenter expressed appreciation Department does not use such criteria to issues (some quite similar to suggestions for the Department’s mention in the distinguish between agreements made at the negotiating table and by NPRM that written arrangements do not requiring written arrangements from commenters). While these mechanisms apply to such third-party services. One those that do not. Instead, the were designed to protect students, commenter suggested the proposed rule regulations state that they are required promote transparency, allow for a could incorrectly be read to imply that if an ineligible entity provides ‘‘part of rigorous evaluation, and other laudable a written arrangement would be the educational program,’’ which means goals, the Department believes that they required if an outside entity provides actual delivery of instruction using were ultimately too burdensome and design or administration but not outside instructors and facilities. The costly to justify the potential benefits of instruction. One commenter implored Department assures one commenter that participation, which may have the Department not to ‘‘gut the meaning it is not changing and could not ‘‘gut’’ ultimately denied students the of college.’’ Other commenters raised the meaning of college. opportunity to benefit from innovative concerns with OPMs or other Changes: None. programs that were potentially quite arrangements such as the acquisition of Comments: Two commenters noted valuable. In short, the Department a proprietary institution by a public that a limited number of institutions believes that the most significant lesson institution that do not relate to the were permitted to go above the 50 from EQUIP is that burden must be proposed rule. percent limit to partner with ineligible weighed against safeguards in order to Discussion: Although mentioned providers as part of the Department’s support innovation while protecting briefly in the NPRM, the Department Educational Quality through Innovative students. This was one of the reasons wishes to expand upon its long-standing Partnerships (EQUIP) experiment. These that the Department undertook this position that written arrangements do commenters said that participants have rulemaking and made the changes to § 668.5 and other sections. not generally apply to contracts with struggled to meet Department benchmarks necessary to launch their Changes: None. OPMs. Use of the word ‘‘design’’ or Comments: Several commenters urged ‘‘administration’’ in § 668.5(g) may refer programs and, as a result, data has been quite limited and so should not be used the Department to rescind changes made to one or more of the following— to § 602.22 in the accreditation establishing the requirements for to justify changes to written arrangements. One commenter further rulemaking that allow senior staff of an successful completion of the course; accrediting agency to review several suggested that some participants in the delivering instruction in the course; or types of substantive change requests, program engaged in practices that were assessing student learning. One example including those relating to written harmful to students, noting one was of this would be if an ineligible entity arrangements, rather than requiring the cited by its State for deceptive provides instructors and delivers agency’s decision-making body to make advertising, and another precipitously instruction via a ground-based or online the decision. One commenter also closed. As a result, they asserted that program separate from what the eligible suggested removing a change that would not enough information is known about institution would normally provide. require expedited approval by whether these types of programs can be This would not include, as the accrediting agencies of written successful. commenter worries some might infer, a arrangements, adding other reporting course’s ‘‘platform or method of Discussion: EQUIP was launched and data collection requirements, and delivery, technical support, or student under the Department’s Experimental closely reviewing written arrangements services.’’ In fact, institutions frequently Sites Initiative.13 We acknowledge the 14 approved by accrediting agencies during utilize employer advisory boards or limitations of the experiment. The recognition reviews. Another other outside expertise to develop Department believes there were commenter suggested seeking data on courses or use a variety of methods to multiple design flaws in that the use of written arrangements from recruit students without written experiment, many unrelated to institutions and accrediting agencies. arrangements. In addition, just as in flexibility for written arrangements. As Discussion: The changes to § 602.22 elementary and secondary schools, the commenters acknowledge, most were made in a separate rulemaking outside providers are frequently used to potential participants were unable to effort and the Department declines to provide training and professional start-up their programs and begin rescind the change it made months ago. development to instructors in utilizing the waivers. This was at least However, the Department reminds these postsecondary education. Requiring a in part due to the experiment’s commenters, some of whom are strongly written arrangement for these core requirements, written under the prior urging the Department to stick with the functions could grind the basic administration, were so burdensome consensus agreement’s limits of 25 and functions of an institution to a halt. and complex that many institutions 50 percent in § 668.5(c), that the Instead, the Department believes expressing interest did not ultimately Department and others agreed that § 668.5(h) is a non-exhaustive list of apply, and those that applied, have maintaining these limits would not activities that do not require written slowly dropped out at various stages in impede innovation, as long as approvals arrangements, but many others from the years-long process of attempting to by accrediting agencies could be contracting for food service, or with obtain approval for and launch these streamlined and take less time. We OPMs, or facilitating ground-based programs. Much of this complexity continue to believe that the consensus instruction through upkeep to language strikes the right balance facilities—should be assumed to not 13 80 FR 62047. between enabling innovation and 14 ed.gov/news/press-releases/expanding- require a written arrangement either, in pathways-success-after-high-school-us-department- protecting students and taxpayers. The accordance with longstanding practice. education-approves-first-innovative-equip- Department will uphold the consensus We further question one commenter’s experiment. language regarding the 25 and 50

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percent limits in § 668.5(c), as well as previously required accrediting agencies achieve synergies between two or more regarding the efforts to streamline to demonstrate prior experience in a eligible institutions owned or controlled approvals in § 602.22 either. The given area before the Department would by the same individual, partnership, or Department believes that these changes allow an expansion of scope to conduct corporation. reduce burden on accrediting agencies accreditation activities in those areas. The COVID–19 pandemic highlights a and streamline institutions’ ability to We removed such provisions because worst-case scenario, where institutions respond to workforce needs, as outlined they could have had an anticompetitive had to quickly move students online in greater detail in the Department’s effect and created a sometimes- and expand any remote learning NPRM and final rule on accreditation.15 impossible standard requiring an entity infrastructure they had at their disposal. As discussed during negotiated to demonstrate experience doing However, a local or national economic rulemaking, the Department declines to something they are legally barred from shift that quickly necessitates more add further burdensome reporting doing. The Department was unable to training in one area and less in another requirements; however, according to find, and commenters did not suggest, a may be a more common example. The § 668.43(a)(12), institutions are required workable alternative that would have Department notes that many accrediting to disclose written arrangements to maintained the language while avoiding agencies require at least 25 percent of students, which is an added similar problems. The Department does the program to be delivered by the requirement included in the not believe a viable alternative exists institution conferring the credential and Accreditation and State Authorization that would provide meaningful defers to accrediting agencies in this final rule to improve transparency. protection without having an area. The Department does not believe Changes: None. anticompetitive effect, being overly this provision, which applies to a very Comments: Several commenters burdensome, or being unenforceable. In small subset of institutions and responded to the question posed by the addition, the Department believes the students, exposes those students to Department in the NPRM, which asked requirement that the provider be meaningful additional risk and notes whether the requirement for non- effective in meeting stated learning that any misrepresentation or fraud of accredited entities to demonstrate prior objectives is vague, likely the kind the commenter fears may be experience and effectiveness prior to unenforceable, may be deemed arbitrary addressed through existing enforcement engaging in a written arrangement and capricious, and may violate 20 means. As noted elsewhere, we not only would be too difficult to meet. These U.S.C. 3403(b), which prohibits the maintained the requirement to disclose commenters suggested that it would be Secretary from exercising authority over these arrangements to students in too difficult for most third-party curriculum, administration, and § 668.43(a)(12), but we actually providers to meet a requirement to personnel of educational institutions. strengthened those requirements in the ‘‘demonstrate experience’’ before being The Department believes that accreditation final rule, which was given the opportunity to do so. One commenters made a compelling case developed though a consensus commenter added that institutions are that the proposed provision could agreement as part of the same negotiated sufficiently motivated to ensure interfere into areas overseen by rulemaking as this regulation.16 academic rigor when using written accrediting agencies. Students may enroll in a program they arrangements and thoroughly vet them Changes: The Department concurs choose. However, options are finite and before signing a contract. This with the commenters. We have deleted commenter noted that the content § 668.5(c)(1)(i) and renumbered the may be unexpectedly limited, regardless provided by the ineligible provider must section accordingly. of the use of a written arrangement. still meet standards for accreditation Comments: One commenter Unavailability of faculty or facilities, and said that new entrants often have supported the proposed removal of insufficient demand to offer a certain the most advanced and desirable language that previously required the course during any given term, or other content. The commenter questioned certificate or degree-granting institution factors could limit students’ options. In what type of information would be to provide more than 50 percent of the most cases, despite the commenter’s sufficient to demonstrate experience if educational program in a written assertions, the Department believes this the provision remained. Another arrangement between two or more provision is likely to increase (rather commenter added that the ‘‘experience’’ eligible institutions owned or controlled than decrease) available options to requirement would intrude into matters by the same individual, partnership, or students. The risk of fraud is always overseen by accrediting agencies. And corporation. present any time Federal funds are one commenter believed the One commenter opposed this change involved. The Department prefers strong requirement was ambiguous while and stated that there may be differences enforcement of a limited number of restraining innovation. in quality or the student experience important and straightforward Discussion: The Department agrees between institutions sharing ownership, safeguards rather than diverting with the commenters who uncovered which could lead to students being resources to maintaining numerous low- serious flaws in a requirement to misled about the nature of their risk restrictions that could deny benefits demonstrate prior experience and education. The commenter suggested to students. effectiveness. The Department does not students may be required to take more Changes: None. change consensus language without a courses online through one affiliated Clock to Credit Hour Conversion good reason, especially in a provision so institution when they expected to be (§ 668.8) vigorously debated during negotiations. taking ground-based courses from the However, after negotiations, the other. The commenter suggested the Comments: One commenter expressed Department noted similarity between Department has provided insufficient support for the proposed changes to the experience requirement in evidence to support the change. § 668.8(k), noting that the changes § 668.5(c)(1)(i) and provisions removed Discussion: The Department thanks eliminate confusion about the inclusion in the accreditation regulations, the commenter for supporting removal of homework time in the clock-hour especially those in § 602.12, which of this restrictive provision. The determination. Department maintains that there is 15 84 FR 27404 and 84 FR 58834, respectively. value in maintaining flexibility to 16 84 FR 58834.

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Another commenter asserted that at the request of negotiators who Changes: We have revised compliance with these regulatory expressed the concern that programs § 668.8(k)(2)(ii) to clarify that in meeting changes would, in addition to having with small numbers of students may not the clock-to-credit hour exemption, an negative financial effects, be potentially produce graduates in a given year, or institution must demonstrate that at burdensome, and conflict with even over a couple of years, raising the least one student graduated from the accreditor expectations. The commenter prospect of those programs being found program during the current award year further offered that credit hours are in violation of § 668.8(k)(2)(ii). The or the two preceding award years. more suitable than clock hours for change was included in amendatory text Certification Procedures (§ 668.13) evaluating satisfactory academic on which consensus was reached. progress and the current regulation While appreciative of those Comments: Several commenters (§ 668.8(k) and (l)) is more reflective of negotiators’ concerns, we are persuaded stated their support for language the levels of learning at their institution. that removal of the requirement for providing that if the Secretary does not Finally, the commenter expressed institutions to demonstrate that students make a decision to grant or deny concern over the effect the proposed enroll in and graduate from the program certification within 12 months of an changes might have on the institution’s would make it possible for an institution’s expiration date of its ability to provide the same levels of unscrupulous institution to stand-up current period of participation, the contact for online and in-person nonexistent programs that do not Department will grant the institution an courses. actually graduate anyone, effectively automatic recertification, which may be One commenter noted that the circumventing the clock-to credit-hour provisional. The commenters supported Department neglected in the NPRM to conversion requirement. this change for the increased certainty address the proposed change to With respect to degree programs with and transparency it provides to § 668.8(k)(2)(ii), removing the limited numbers of students, we note institutions that would otherwise requirement that an institution that current § 668.8(k)(2)(ii) makes no receive month-to-month extensions of demonstrate students enroll in and mention of the frequency with which their eligibility. The commenters also graduate from degree programs and students must be shown to graduate believed that such changes properly replacing it with a requirement that the from the degree program that courses balance this increased certainty for institution demonstrate that at least one from the program that would otherwise institutions with Department oversight student was enrolled in the program be subject to clock-to-credit hour on behalf of students and taxpayers. during the current or most recently conversion are acceptable toward; and a One commenter added that the change completed award year. The commenter year where no student graduates from will allow institutions to move forward asserted that the proposed rule would the degree program is not, in and of with new programs in a timely and allow institutions to effectively invent a itself, an indicator of noncompliance. responsive manner. nonexistent program to use as a back- Accordingly, we are revising Discussion: The Department thanks door way to avoid the conversion § 668.8(k)(2)(ii) to clarify that an the commenters for their support and formula, thus compromising program institution must be able to demonstrate agrees that the changes provide for integrity. that at least one student graduated from increased certainty and transparency Discussion: The actual scope of what the program during the current award while balancing the need to protect was proposed in the NPRM is year or the two preceding award years. students and taxpayers. essentially a revision to the conversion We continue to believe that the Changes: None. formula. The applicability of clock-to- exception in § 668.8(k)(2) is Comment: One commenter opposed credit-hour conversion is not expanded appropriately limited to programs that automatic certification renewal when as a result of these changes. Under consistently produce graduates. Even the Secretary does not decide to grant or current regulations, any program that is where an institution is not attempting to deny within 12 months of an at least two academic years in length deliberately circumvent clock-to-credit- institution’s expiration date. The and provides an associate or bachelor’s hour requirements, a circumstance commenter claimed that this change degree (presumably the overwhelming where no student graduates from the contradicts the HEA and circumvents majority of those programs offered at degree-granting program over multiple the Secretary’s obligations under the four-year public and private, degree- years legitimately calls into question Act. The commenter asserted that this granting institutions) is not subject to whether that program is truly meeting change would undo the Secretary’s clock-to-credit-hour conversion. This the requirements for the exception obligation under 20 U.S.C. 1099c(a) to would not change under what was found in § 668.8(k)(2). Therefore, evaluate the institution’s legal authority proposed in the NPRM. It should further because the exemption requirement to operate within a State, accreditation be noted that there are no Department only applies when an institution offers status, administrative capability, and rules requiring the use of clock hours as a program that leads to a degree, and the financial responsibility. The commenter opposed to credit hours in measuring shortest degree programs are generally also claimed that the Department students’ progress. no less than two years in length, the provided no evidence of the uncertainty We inadvertently omitted from the Department believes that a two-year experienced by institutions because of NPRM any discussion of proposed look-back period would be sufficient to the current practice. The commenter § 668.8(k)(2)(ii), which removes the identify programs that could fulfill this suggested that there could be good requirement that an institution requirement for an exemption from the reason for the Department to delay its demonstrate students enroll in and clock-to-credit conversion requirements. review, including if it is investigating graduate from degree programs and If no student graduates from a program the institution. The commenter believed replaces it with a requirement that the during the entire expected timeframe for that, due to the lack of evidence or institution demonstrate that at least one completion of that program, it calls into reasoning, the proposed change is both student was enrolled in the program question whether the transferability of arbitrary and capricious and that the during the current or most recently credits into such a program is in fact Department would violate the APA by completed award year, and thank the useful to a student enrolled in a non- making the proposed change. The commenter who brought this omission degree programs, which is the essence commenter further stated that the to our attention. This change was made of the exemption in the first place. Department failed to consider

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reasonable alternatives and that it has a feedback for institutions, helps the labor markets do not significantly legal obligation to do so. The Department to properly oversee overlap two States’ borders. They cited commenter suggested that the institutions, and can allow speedier past statements, including from the Department instead seek additional remedies if deficiencies are identified. Department’s OIG, of institutions that funding for staff to review recertification As such, and contrary to the assertion the commenters say falsified their applications to ensure a prompt review made by this commenter, the program length. Instead, this commenter and decision. The commenter also certification renewal process outlined in suggested that we allow institutions to proposed providing a shorter extension § 668.13 is neither arbitrary and lengthen their program based on an of, perhaps, three or six months while capricious nor would it constitute an adjacent State’s requirement only if the the Department continues its review. impermissible abdication of the institution is within a metropolitan Discussion: The Department Secretary’s responsibility to determine statistical area (MSA) that includes appreciates the commenter’s interest in an institution’s legal authority to another State. The commenter also this topic. Certification decisions can operate within a State, its accreditation suggested an alternative, that the have major implications for institutions status, and its administrative capability institution instead attest to, and and students. We agree that more must and financial responsibility when demonstrate if asked, that it has be done at the administrative level to determining the institution’s eligibility enrolled a student who lived in that provide more timely responses and to participate in title IV, HEA programs. State within the preceding three years or better communication. However, we Changes: None. that recent graduates are gainfully believe those steps alone are Limitation on Number of Clock Hours employed in that State. insufficient. Further, we believe it is in Based on Minimum State Requirements One commenter supported the the best interest of students and (§ 668.14(b)(26)) proposed rule in this area and cited a taxpayers for the Department to timely need for greater occupational licensure identify deficiencies and take Comments: Many commenters reciprocity across State lines. appropriate action. supported the proposed requirement The Department appreciates the that eligible short-term programs Discussion: We appreciate the support suggestion that the Department grant demonstrate reasonable program length. from commenters on this issue and three- or six-month extensions instead These commenters acknowledged the acknowledge that setting the right of a month-to-month extension. trade-off between setting proper balance on this issue is difficult for However, institutions must make safeguards to ensure program length is reasons outlined in the NPRM, most important budgetary and academic not inflated and ensuring students are notably that individuals often move decisions annually. The Department able to meet States’ occupational from one State to another or live, work, believes those proposals would have the licensure requirements. The and learn in different States at the same same drawbacks and present the same commenters believed that the time. uncertainty to institutions as the status Department struck a proper balance, The Department appreciates the quo. An extension longer than one year which will promote worker mobility concern from the commenter who would not give the Department across State lines and reduce barriers to suggested the proposed rule would not sufficient oversight to revisit a decision employment, especially in regional go far enough to prevent institutions in the short term if needed. economies that cross State boundaries. from artificially increasing program The Department disagrees that it has Several other commenters length. We have serious concerns any failed to provide a proper justification underscored that the negotiating time an institution, accrediting agency, for this change and did not deviate from committee compromised on the or State takes steps to artificially limit the consensus language on this topic. As provisions related to program length access to a profession. The Department discussed during negotiated rulemaking and suggested that the provisions would will continue to speak out against such and as other commenters have noted, protect students from fraud. One of policies and take steps where possible delaying decisions causes significant these commenters noted the proposed to prevent credential inflation and uncertainty. The Department believes rule provided balance and an acute related barriers to opportunity. that 12 months beyond the expiration positive impact on student veterans and However, as outlined in the NPRM and date of the institution’s current military-connected students. supported by many commenters, the certification is more than sufficient Several commenters said they Department believes this language time, especially since the institution is preferred the proposed rule’s provision strikes a reasonable balance between required to submit the application for over other options discussed during supporting students who must qualify recertification no less than 90 days prior negotiated rulemaking, especially the for State licensure and preventing to the expiration of its current Department’s initial proposal allowing abuse. If abuse rises to the level of certification. The Department’s review program length of 100 percent of the falsification of documents, as the usually begins more than a month longest minimum requirement in any commenter suggests, we will use before the expiration date, adding State. These commenters urged the existing enforcement methods. additional time to the process. If an Department to maintain the consensus investigation is underway, the agreement contained in the proposed The Department thanks the Department has other options at its rule. commenter for the suggestion about disposal. The Department can One commenter praised the changes tying requirements to out-of-State MSAs provisionally certify the institution for to this provision and the positive impact or past success at finding students as little as one year or can deny the they will have on veterans and their employment in a neighboring State. recertification if justified. If the spouses, who frequently move across However, we believe this would hamper Department must issue sanctions, it may State lines. mobility across State lines and impose do so at any time. This change does not One commenter suggested that the burdens on institutions and the reduce the Department’s enforcement proposed provision did not go far Department. The tie to MSAs would power. Instead, it encourages the enough to prevent institutions from only benefit areas that are more heavily Department to process applications lengthening their programs in ways that populated or where MSAs cross State promptly, which provides timely do not benefit students, including if lines (they frequently do not) so the

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proposal does not seem to be a viable authority to allow voluntary early the second comprising the remaining 52 alternative.17 implementation of this provision. days and beginning the following We also do not agree that institutions Discussion: The Department will Monday. Students who complete only should be required to demonstrate that allow voluntary early implementation the first module could be treated as their graduates have been successful at on the entire rule, including this withdrawn, because their first module finding employment in another State provision. included a scheduled break or did not when the institution’s programs, under Changes: None. include a weekend. Another commenter provided the our current regulations, may be unable Return of Title IV Funds (R2T4) example of a program offered in to meet the requirements of preparing (§ 668.22) individuals to be licensed in that State. standard semesters, each comprised of The Department appreciates the Comments: Numerous commenters two, 8-week modules. Both modules of support of the commenter who noted expressed support for the proposed the fall semester, each 54 days in length, that reciprocity for occupational changes in the treatment of title IV are separated by a weekend and there licensure is a helpful, but incomplete, funds when a student withdraws. One are no breaks of five or more days in the step States can take to lower barriers for of those commenters stated that the semester. The spring semester contains individuals. Time-based requirements changes regarding which students are a spring break of nine days occurring that may not be tied to employer needs considered withdrawn for R2T4 between the first and second modules can be harmful and deny opportunity to calculation are a welcome attempt to (each 54 days in length) of the semester. individuals looking to build a better life. resolve technical problems in the A student enrolls in five credits in the Changes: None. current rules existing for students first module of the fall semester and six Comments: A few commenters enrolled in self-paced instruction and in credits in the second module of that supported the proposed provision and modules, whose treatment with respect term, successfully completing the first asked that the Department define to R2T4 sometimes does not reflect their module but opting not to return for the ‘‘adjacent State’’ to include States whose actual level of coursework completion. second module. With the break border is within 100 miles of the State Another commenter expressed included, the fall semester is 110 days in which the institution is located to appreciation for the Department’s in length, 54 days, or 49 percent of allow for greater flexibility for regional attention in considering the inequities which the student completed, meaning economies. that currently exist for students he or she would be considered Discussion: Although the Department withdrawing from a program delivered withdrawn. Another student enrolls in appreciates the suggestion to define an in modules. Pointing out the unfairness the same pattern during the spring ‘‘adjacent State’’ as one whose border is of penalizing a student by requiring an semester, again completing the first within 100 miles of the State in which R2T4 calculation and the potential module of 54 days but not returning for the institution is located, such a change return of funds solely because that the second module, also 54 days in would not align with the consensus student completed her program on a length. However, with the spring break agreement or the definition of the word more aggressive timeline than originally excluded from the number of the ‘‘adjacent’’ in this context, which means anticipated, other commenters thanked number of days in the semester, this ‘‘having a common endpoint or the Department for removing the student has completed 54 of 108 days or border.’’ 18 The Department wishes to requirement to conduct an R2T4 50 percent of the spring semester and is maximize opportunity and minimize calculation in cases where a student has not considered withdrawn. Both barriers and appreciates hearing from completed graduation requirements. students completed the same five institutions with students that may Discussion: We appreciate the support credits and 54 days in the payment benefit from this provision. However, of these commenters. period, but in the case of the first many States have ‘‘statutory language Changes: None. student the institution is required to allowing reciprocity or endorsement Comments: Several commenters perform the R2T4 calculation due to the agreements for licenses’’ including for requested clarification on the proposed break between the modules being less cosmetology and, as already mentioned, rule, which does not consider a student than five days (i.e., a weekend). Finally, one commenter explained States have opportunities to lower the withdrawn from a program offered in that in a standard term program where barriers they have erected in these modules if the student completes: • One module that includes 50 the total days in the payment period is areas.19 As many commenters have percent or more of the number of days an odd number and the first of two noted, the consensus agreement in this in the payment period, modules offered over the semester is area involved genuine compromise and • A combination of modules that one day shorter than the second, a balancing of competing priorities. While when combined contain 50 percent or student enrolling in both modules but a small number of students may be more of the number of days in the completing only the first module would willing to travel up to 100 miles and payment period, or complete only 49 percent of the cross two State borders to work or learn, • Coursework equal to or greater than payment period. The commenter offered the Department does not believe this the coursework required for the that this could result in students, who benefit is outweighed by the risk of institution’s definition of a half-time for all intents and purposes completed institutions using a significantly longer student under § 668.2 for the payment a module lasting half of the term, being requirement two States away in order to period. considered withdrawn for lack of one lengthen their programs for all students. The commenters identified various day. Changes: None. ways in which application of the To address these issues, commenters Comments: A few commenters proposed rule as written might result in variously suggested counting only days requested that the Department use its inequitable treatment of students who of instruction (excluding both breaks withdraw from programs taught in and weekends) instead of calendar days, 17 www2.census.gov/geo/maps/metroarea/us_ wall/Sep2018/CBSA_WallMap_Sep2018.pdf. modules. One commenter offered the excluding scheduled breaks of less than 18 merriam-webster.com/dictionary/adjacent. example of a 102-day term consisting of 5 days between modules from the 19 ncsl.org/research/labor-and-employment/ two modules, the first module 50 days number of calendar days to address the occupational-licensing-statute-database.aspx. in length and ending on a Friday and issue of weekends between modules,

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and changing the minimum completion period, excluding scheduled breaks of in the modules that a student is percentage from ‘‘50 percent or more’’ to five or more consecutive days and all scheduled to complete in a payment ‘‘49 percent or more.’’ days between modules. period or period of enrollment comprise Discussion: We agree with the Comments: One commenter the denominator of the calculation that commenters that additional referenced the Department’s proposal in determines the amount of title IV, HEA clarifications to the proposed changes in the preamble of the NPRM to amend program funds that the student earns for § 668.22 are necessary to avoid the § 668.22(l)(6) to clarify that a program is the period. potential unintended consequences ‘‘offered in modules’’ if the program During meetings of the Distance identified above. As expressed in the uses a standard term or nonstandard- Learning and Innovation subcommittee, preamble of the NPRM, the term academic calendar, is not a the Department specifically expressed Department’s intent in proposing subscription-based program, and a its intent to make changes to § 668.22 modifications to the treatment of course or courses in the program do not that would exclude non-term and modules in the R2T4 was that a student span the entire length of the payment subscription-based programs from the would be considered to have completed period or period of enrollment. The types of programs that are considered the period if he or she completed preamble also stated that non-term ‘‘offered in modules’’ and eliminate coursework constituting at least half of programs would no longer be regulations specific to subscription- the days in the period, not including the considered programs ‘‘offered in based and nonterm programs that days in scheduled breaks. It is not our modules’’ in any circumstances. previously incorporated the concept of intent in these final rules that students Specifically, the commenter requested modules. As noted above, these changes who have otherwise met that standard the Department clarify whether a are discussed in the preamble to the be considered withdrawn due to minor student who completes at least a half- NPRM but are not reflected in the differences in the number of days that time coursework in a subscription amendatory text. The Department constitute 50 percent of a term, resulting period before ceasing enrollment will be therefore believes that it is necessary to from weekends falling between considered to have withdrawn from the make a change to § 668.22(l)(6) in order modules, the absence of breaks of five payment period for purposes of R2T4. to fully implement its proposed days or more, or terms with uneven Another commenter expressed overall approach, which was approved by both numbers of days etc. Accordingly, we support for the proposed changes to the Distance Learning and Innovation are revising proposed § 668.22(l)(6), clarifying that a program subcommittee and the full negotiated § 668.22(a)(2)(ii)(A)(2)(i) and (ii) to is ‘‘offered in modules’’ if the program rulemaking committee. reflect that a student who withdraws uses a standard-term or nonstandard- Finally, regarding the reference to from a program offered in modules who term academic calendar, is not a modules in § 668.10, we believe the completes one module that includes 49 subscription-based program, and a term is used correctly in that section percent or more of the number of days course or courses in the program do not and does not prejudice the amendatory in a payment period or a combination of span the entire length of the payment text in § 668.22(l)(6). Proposed modules that when combined contain period or period of enrollment. § 668.10(a)(3) requires an institution to 49 percent or more of the number of However, the commenter noted that the establish a methodology to reasonably days in the payment period, will not be change, while discussed in the equate each module in the direct considered withdrawn. This change will preamble, is not included in the assessment program to either credit ensure that a day or two difference in amendatory text of the NPRM. The same hours or clock hours. If it were the case the number of days in each module does commenter offered that, given these that all direct assessment programs were not become the determining factor in changes, use of the term ‘‘module’’ in subscription-based, this might be a whether a student is considered § 668.10(a)(3), relevant to direct source of confusion. However, many withdrawn. We are further revising assessment programs, is confusing and direct assessment programs are offered § 668.22(a)(2)(ii)(A)(2)(i)and (ii) to an alternative term should be found to in terms using modules. We believe the exclude scheduled breaks of five or replace it. clear statement in § 668.22(l)(6) that a more consecutive days and all days Discussion: We appreciate the program offered in modules is not between modules from the number of commenter bringing the omission of considered to be a subscription-based days in the payment period used to proposed § 668.22(l)(6) from the program is sufficient to avoid any calculate whether the module(s) preamble to our attention. confusion between these two sections. completed by the student comprise 49 A student in a subscription-based or Changes: We have revised percent of the payment period. nonterm program is not considered to § 668.22(l)(6) to clarify that a program is Changes: We have revised have completed a payment period if the ‘‘offered in modules’’ if the program § 668.22(a)(2)(ii)(A)(2)(i) and (ii) to student completed at least half-time uses a standard term or nonstandard- reflect that a student who completes all coursework in that payment period term academic calendar, is not a the requirements for graduation from his because the Department does not subscription-based program, and a or her program before completing the consider a nonterm program or a course or courses in the program do not days or hours in the period that he or subscription-based program to be span the entire length of the payment she was scheduled to complete is not ‘‘offered in modules.’’ The nature of period or period of enrollment. The considered to have withdrawn from a such programs—which are not required amendatory text in the final rule program offered in modules if the to set limits on the timeframes for includes § 668.22(l)(6) which was student successfully completes one students to complete coursework—are inadvertently omitted in the NPRM. module that includes 49 percent or not suited to the use of modules, which Comments: One commenter requested more of the number of days in the presume a clear start and end date for that the Department clarify whether a payment period, excluding scheduled the coursework that a student is completed module is one the student breaks of five or more consecutive days attempting during a payment period. successfully completed, or simply one and all days between modules or Such a timeframe is crucial to the the student attended all the way combination of modules that when incorporation of modules into the through, i.e., the module end date is in combined contain 49 percent or more of Department’s framework for the R2T4 the past, the student began attendance the number of days in the payment calculations because the number of days and did not withdraw or stop attending;

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the module grade(s) could be earned the number of days in the payment Discussion: While the commenter is failing grades or incompletes. period, excluding scheduled breaks of correct in asserting that a standard term Discussion: As discussed in the five or more consecutive days and all of 21 weeks, as permitted by the NPRM, the Department proposed to days between modules. November 5, 2019 EA, increases the revise its approach to the treatment of Comments: One commenter noted potential for a student to be scheduled students who complete some, but not that proposed § 668.22(a)(2)(i)(C) to return to a course that begins more all, of the coursework they were provides that for a student in a standard than 45 days after the end of the module scheduled to attend during a payment or nonstandard-term program, excluding the student ceased attending, we are not period to ensure more equitable a subscription-based program, the persuaded that this obviates the reasons treatment of such students while student is not scheduled to begin for which the Department proposed the maintaining the integrity of the title IV, another course within a payment period changes to § 668.22(a)(3)(ii). As HEA programs. In achieving that or period of enrollment for more than 45 explained in the preamble of the NPRM, balance, the Department believes it is calendar days after the end of the the Department maintains the same reasonable to require that a student module the student ceased attending, concerns about long periods of non- successfully complete the module(s) unless the student is on approved leave attendance for standard term programs comprising 49 percent of the payment of absence, as defined in paragraph (d). as it does for nonstandard-term and period or half-time enrollment. This However, § 668.22(a)(2)(i)(D), which non-term programs and believes that standard will have the added benefit of provides that for a student in a non-term students should be treated consistently reducing confusion for institutions that program or a subscription-based in these situations. The increased are not required to take attendance, program, the student is unable to likelihood for these extended periods of since passing grades will necessarily be resume attendance within a payment non-attendance to occur with longer the determining factor in whether a period or period of enrollment for more standard terms, we believe, argues in student is treated as a completer rather than 60 calendar days after ceasing favor of this requirement. than a withdrawal. Successful attendance, lacks a similar qualifier Changes: None. completion of a module requires the clarifying that a student who is unable Comments: Under proposed student receive at least one passing to resume attendance within the § 668.22(l)(9), a student in a program offered in modules is scheduled to grade for that module. Successful prescribed period is not considered complete the days in a module if the completion of coursework equal to or withdrawn if on an approved leave of student’s coursework in that module greater than the coursework necessary absence. for half-time enrollment requires that was used to determine the amount of Discussion: We appreciate the the student receive a passing grade in a the student’s eligibility for title IV, HEA commenter bringing this unintentional sufficient number of credits to comprise funds for the payment period or period discrepancy to our attention and clarify half-time enrollment status (as defined of enrollment. One commenter that no student on an approved leave of by the institution under applicable requested that the Department clarify absence is ever considered to be regulations) for the payment period. whether the most recent determination A student who completes a module withdrawn. of enrollment status would be used for but receives all incomplete grades, or a Changes: We have revised this purpose or whether the Department combination of course incompletes and § 668.22(a)(2)(i)(D) to clarify that a is referring to a specific initial or failing grades is not considered to have student who is unable to resume ‘‘census’’ date, or whether this can be a successfully completed that module attendance in a non-term or matter of institutional policy. The unless at least one course incomplete subscription-based program within a commenter asked, if the latter, will converts to a passing grade before the payment period or period of enrollment institutions have the latitude to deadline by which the institution must within 60 calendar days after ceasing implement a policy with multiple otherwise perform an R2T4 calculation enrollment is, nevertheless, not points of determination during the term for that student. Likewise, a student considered withdrawn if on an much like existing policies with receiving all course incompletes or a approved leave of absence. multiple Pell recalculation dates? combination of course incompletes and Comments: One commenter asked the Discussion: In the preamble to the failing grades is not considered to have Department to consider whether, in NPRM, the Department proposed to use successfully completed the number of view of the November 5, 2019 electronic the student’s schedule at a fixed point credits necessary to establish half-time announcement (EA) extending the to determine the number of days the enrollment unless a number of course maximum length of a semester to 21 student is scheduled to attend during incompletes sufficient to comprise half- weeks, proposed changes to the period for R2T4 purposes. Using this time enrollment convert to passing § 668.22(a)(3)(ii) requiring students approach, subsequent fluctuations in grades before the deadline by which the enrolled in programs offered in standard the student’s enrollment would have no institution must otherwise perform an terms to confirm that they will enroll in effect on the number of days in the R2T4 calculation for that student. another module within 45 days of denominator of the R2T4 calculation if Changes: We have revised the ceasing enrollment to avoid being the student withdraws, resulting in a provisions of § 668.22(a)(2)(ii)(A)(2) to treated as withdrawn is still justified. greater degree of certainty for students, reflect that a student who is enrolled in The commenter observed that prior to a diminished likelihood of improper a program offered in modules is not the Department’s revised policy for payments, and reduced administrative considered to have withdrawn if the standard term length issued on burden for institutions performing such student successfully completes one November 5, 2019, it was uncommon for calculations. In order to allow module that includes 49 percent or a module in a standard term program to institutions flexibility in adopting a more of the number of days in the begin more than 45 days following the policy that is practical for their payment period, excluding scheduled end of a prior module. However, the program(s), we are not prescribing a breaks of five or more consecutive days, new guidance that allows a standard specific date that institutions must use and all days between modules or term to be as long as 21 weeks, increases as the fixed point for determining the combination of modules that when the likelihood that more than 45 days number of days the student is scheduled combined contain 49 percent or more of would elapse. to attend. A Pell recalculation date or

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census date is an allowable option, as Discussion: We appreciate the support maximum timeframe, may file a SAP would be some other date determined for our proposals to eliminate appeal (if the institution’s SAP policy by the institution. An institutional redundancy and provide greater permits such appeals). policy that includes multiple dates, flexibility in the application of SAP Changes: None. such as is permitted for Pell requirements. In response to those Foreign Schools (§§ 600.52 and 600.54) recalculation dates, is acceptable. commenters who suggested that the Changes: None. definition of ‘‘maximum timeframe,’’ as Comments: Two commenters Comments: One commenter noted measured in calendar time, supported retaining the current exception for independent research that the proposed amendatory text in accommodate differences in enrollment done by an individual student in the § 668.22(a)(2)(ii)(A)(3), addressing status, we note that the limitation on United States. The provision permits written confirmation for a payment maximum timeframe of 150 percent of not more than one academic year of period or period of enrollment in which the published length of the program (for research conducted during the courses in the program are offered in an undergraduate program) is an dissertation phase of a doctoral program modules, specifically allows ‘‘electronic intentionally static measure designed to (and where the research can only be confirmation,’’ whereas ensure completion of that program performed at a facility in the United § 668.22(a)(2)(ii)(A)(4) and (5) pertaining within a reasonable time. For example, States). The provision also permits an to subscription-based programs and a four-year, 120 credit Bachelor of Arts eligible foreign institution to enter into non-term programs respectively, make program may have a maximum timeframe of 180 attempted credits or a written arrangement with an eligible no reference to the use of electronic institution within the United States to confirmation. six years. Measuring maximum timeframe for the program in credit provide no more than 25 percent of the Discussion: We thank the commenter courses required for a student’s eligible hours, with pace determined by for bringing this inconsistency to our program. However, both commenters dividing the cumulative number of attention. It is the Department’s requested that the proposed regulation successfully completed credit hours by longstanding policy that, in the absence be broadened such that a doctoral the cumulative number of attempted of regulations specifically requiring that student, having already completed 25 hours, does account for variances in a notification or authorization be sent percent of his or her eligible program by enrollment status. However, this is via U.S. mail, a school may provide taking coursework in the United States, because credit hours are measured only notices or receive authorizations would be permitted an additional full as attempted, not because students who electronically. It is further permissible academic year to conduct independent attend part-time are permitted to use an electronic process to provide research there. One of those commenters required notices and make disclosures additional hours beyond 180. Calendar opined that the research phase of a by directing students to a secure website time elapses at a constant rate regardless doctoral program can take years and that contains the required notifications of how many credit hours a student should not be subject to an artificial and disclosures. Because of this, we attempts or completes. As a result, time limit that could preclude students believe specific mention, in any maximum time frame expressed in from pursuing a program that provides regulation, of the option to distribute calendar time is, necessarily, less insights into their chosen field. The required notifications and disclosures, flexible with respect to variances in commenter concluded that since the or collect required authorizations and enrollment status. Factoring part-time research phase of a doctoral program is confirmations through electronic means, enrollment into the measurement of separate and distinct from the classroom is redundant and may cause confusion. students’ pace would potentially result phase, it is both logical and equitable Changes: We have revised in a maximum timeframe, as expressed that students be permitted to undertake § 668.22(a)(2)(ii)(A)(3) to remove the in calendar time, of greater than 150 research in the United States without reference to ‘‘electronic confirmation.’’ percent of published program length. regard to whether or not they have taken We do not agree that allowing Satisfactory Academic Progress a portion of their classroom study in institutions to measure maximum (§ 668.34) that country. timeframe in calendar time will Responding to the Department’s Comments: Several commenters negatively affect students whose request for comments on whether expressed general support for the personal situations preclude full-time written arrangements for students proposed changes to satisfactory attendance in a program. First, this studying in the U.S. should include academic progress (SAP). However, flexibility was not proposed with the organizations that are not eligible some of those commenters asked that expectation that large numbers of institutions, one commenter replied in the Department consider amending the institutions would adopt calendar time the affirmative. The commenter proposed rule to account for enrollment in lieu of credit hours. Most institutions explained that a student’s home status in determining whether a student will continue to express maximum institution is responsible for designing is meeting maximum timeframe timeframe for their programs in credit and supervising its students and that requirements as measured in calendar hours which, as described above, does any written arrangement involving time. One commenter objected to account for differing enrollment statuses another entity, whether an eligible allowing institutions to measure throughout a student’s matriculation. institution or not, is ultimately subject maximum timeframe in calendar time Those institutions opting to measure in to the approval and review of the home, because it could negatively affect calendar time will likely do so having eligible institution. The eligible students for whom life challenges determined that it makes better sense for institution must itself be approved to preclude ongoing full-time attendance. the type of programs they offer, e.g., offer postsecondary education by a The commenter suggested an alternative competency-based programs or recognized authority in its home of allowing a maximum timeframe of programs requiring a prescribed set of country that provides oversight that is 200 percent of program length. The courses in each term for all students. the equivalent of that provided in the commenter also suggested Last, we remind commenters that a United States. The commenter further grandfathering students under existing student who fails to meet SAP, stressed that, as proposed, the rules standards as another alternative. including for reasons related to regarding written arrangements would

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circumscribe the ability of eligible opening the door to millions of students using the flexibilities provided in each foreign institutions to offer diverse receiving degrees without completing section. The examples below illustrate programs that include partnerships with the requirements deemed necessary by the practical application of both other universities that specialize in academic and industry leaders. The provisions. certain topics, and entities which commenter further expressed opposition Example 1 provide unique experiences within a to foreign institutions gaining access to, student’s program of study, as well as and leveraging control over title IV A student in the dissertation phase of access to career-enhancing internships. financial aid, explaining that this would her three-year doctoral program requests One commenter supported the be a direct and overtly questionable act, permission from the institution to proposed revisions to § 600.54(c) that constituting an ethical breach, and not conduct research in the United States. would permit written arrangements in the best interest of the Department, The student has not completed any between an eligible foreign institution American higher education institutions, portion of her program in the United and an ineligible entity, provided the or our nation’s students. States. Having concurred that her ineligible entity is an institution that Discussion: We appreciate the research can only be performed at a satisfies the definition in paragraphs commenters’ concerns over the need for facility located there, the institution (1)(iii) and (iv) of ‘‘foreign institution’’ universities to make flexible and diverse approves one year of research time in and the ineligible foreign institution research opportunities available for the United States. provides 25 percent or less of the doctoral candidates whose specialized Example 2 educational program. The same research often takes place over several commenter requested that, given the years, and requires travel to specific A student enrolled in a three-year potential for ongoing ramifications locations, including in the United doctoral program requests to study at an related to the COVID–19 pandemic, the States. However, the Department is not institution in the United States under a Department increase the percentage of convinced that providing those written arrangement. The home study permitted at recognized ineligible opportunities necessitates or warrants institution approves her request to take foreign institutions to as much as 50 allowing students who have already 12 credits at the Ph.D. level over two 16- percent. This, it was suggested, would completed 25 percent of their programs week semesters, 24 percent of the length provide students the flexibility to in the United States to spend an of the program as determined under navigate the changing situation without additional year conducting research in proposed § 668.5(g) (i.e., dividing the having to appeal for special the United States. This ‘‘stacking’’ number of semester, trimester, or dispensation in future circumstances would create the potential for a student quarter credit hours, clock hours, or the that are impossible to predict. enrolled in a four-year doctoral program equivalent that are provided by the Two commenters asked that the at an eligible foreign institution to eligible U.S. institution by the total Department reconsider the prohibition complete half of that program in the number of semester, trimester, or on foreign institutions offering any United States. As explained in the quarter credit hours, clock hours, or the portion of an eligible program through preamble of the NPRM, the equivalent required for completion of distance education found in current Department’s intention in proposing the program). Subsequently, while in § 600.51(d). One of those commenters these rules is to enhance the range of the dissertation phase of her program, suggested that there is sufficient educational opportunities available to the student requests to conduct research ambiguity in the applicable statute on U.S. students enrolled in eligible foreign in the United States. Because the one- which to base permitting some use of institutions, aligning them with those year limit on the amount of time a distance education, especially in view enjoyed by students attending domestic doctoral student may remain in the of the temporary flexibilities extended institutions, while adhering to the basic United States in order to conduct under the Coronavirus Aid, Relief, and principle that U.S. students borrowing research is measured in calendar time, Economic Security Act (CARES) Act.20 from the Direct Loan program for it is necessary for the institution to Another commenter expressed the enrollment in a program at an eligible consider any time the student has opinion that temporary flexibility, foreign institution should reside in the already spent studying or conducting under the CARES Act, for foreign country where that institution is research there. With 32 weeks of institutions to use distance education is located. We believe this balance to be previous study factored in, the student tacit acknowledgement by Congress of equally necessary at the graduate and is approved for an additional period of the difficulties American students face undergraduate level. research in the United States of up to 20 as a result of the ban on distance The Department is declining to permit weeks. education. In view of this, the stacking of the allowance for a student We thank the commenter who commenter asked that the Department to complete up to 25 percent of their responded to our request for comments modify its regulations to permit program at an eligible institution in the on whether written arrangements for American students to take up to 25 United States under proposed § 600.52. students studying in the U.S. should percent of their program of study via However, an exception is permitted for include organizations that are not distance education. independent research done by an eligible institutions. With respect to Finally, one commenter rejected the individual student in the United States internships, we agree with the proposal to allow students enrolled in for not more than one academic year for commenter that limiting these to eligible foreign institutions to complete up to 25 research conducted during the institutions would circumscribe percent of a program in the United dissertation phase of a doctoral program opportunities for U.S. students States based on concerns that, in (where the research can only be attending eligible foreign institutions in conjunction with other Department rule performed at a facility in the United a way that is contrary to the intent of changes, there would be no way to States) under current § 600.51. proposed regulations. The determine the fiscal and academic Nevertheless, we wish to clarify that the preponderance of internship quality of such foreign institutions, and proposed changes to § 600.52 do not opportunities is not at eligible the potential for the change to result in preclude an institution from allowing postsecondary institutions but rather doctoral students to study and/or with corporations, other businesses, and 20 S. 3548, 116th Congress (2020). conduct research in the United States non-profit organizations other than

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postsecondary institutions. Given the § 600.54(c) that would permit written proposed in the NPRM do not, in any extent to which relevant internship arrangements between an eligible way, increase the scope of foreign experience can enhance a student’s foreign institution and an ineligible institutions’ participation in the title IV educational experience and affect a entity (other than in the United States), programs, nor do they loosen the graduate’s employment prospects, we provided the ineligible entity is an existing financial responsibility are convinced that U.S. students institution that satisfies the definition in standards that eligible foreign attending eligible foreign institutions paragraphs (1)(iii) and (iv) of ‘‘foreign institutions must adhere to. Regarding should not be placed at a disadvantage institution’’ and the ineligible foreign academic quality and the potential for relative to their counterparts attending institution provides 25 percent or less of students to receive degrees that their domestic institutions, and should have the educational program. However, we work does not merit, we note that the the same opportunities to pursue disagree with the commenter that the proposed regulations make no changes internships in any country including the percentage of a program that is provided to the current rules governing United States. by the ineligible entity should be institutional eligibility. Lastly, we are While appreciative of the increased to 50 percent. Domestic uncertain of what the commenter means commenter’s position that increased institutions entering into a written with reference to foreign institutions latitude be accorded coursework as arrangement with an ineligible entity to gaining access to or leveraging control well, we are not similarly persuaded of offer more than 25 percent, but less than over the title IV programs. As previously the need to allow U.S. students 50 percent of an eligible program, must discussed, eligible foreign institutions attending eligible foreign institutions to obtain accreditor approval. No similar already participate in the Direct Loan take coursework in the United States, as protocol exists for foreign institutions. program, and the title IV, HEA programs part of their eligible program, at any Requiring that a non-eligible entity are not structured in such a way that it entity other than an eligible institution. satisfy the regulatory definition of is possible for any institution, foreign or Unlike the situation in foreign ‘‘foreign institution’’ does reasonably domestic, to leverage control over them. countries, where another eligible assure some degree of program integrity. Changes: The definition of Foreign institution may not exist or be within a However, the Department is not institution in proposed § 600.52 reasonable travel distance for ground- persuaded that this is an adequate (Foreign institution, paragraph (1)(ii)(C)) based instruction, there is no lack of substitute for accreditor approval where is changed to remove internships and eligible institutions in the United States the percentage of the eligible program externships from the list of program- with which to execute a written offered by an ineligible entity would be related activities that may only be arrangement. We believe the greater than 25 percent. Moreover, it performed in the United States at an partnerships with other universities in would create a standard for eligible eligible institution. Paragraph specialized topics and unique student foreign institutions lower than that (1)(ii)(C)(2) is added to allow experiences referred to by the applied to domestic institutions. participation in an internship or commenter can readily be secured In response to the commenters who externship provided by an ineligible through written arrangements with one asked that the Department reconsider organization as described in or more of the 6,000 plus eligible the prohibition on foreign institutions § 668.5(h)(2). institutions in the United States. In offering any portion of an eligible Request for Review (§ 668.113) addition, we are concerned that an program through distance education institution in a foreign country may not reflected in current § 600.51(d), we note Comments: One commenter expressed have sufficient opportunity to enforce that this prohibition (sec. 481(b)(3) of strong support for the proposed changes elements of a written arrangement with the HEA) is statutory and provides no to § 668.113, establishing that if a final a non-eligible entity located in the U.S., flexibility. Although the CARES Act audit determination or final program making such arrangements inherently does authorize the use of distance review determination includes risky. education by eligible foreign liabilities resulting from the institution’s As a result, we are amending institutions, and we believe that classification of a course or program as proposed § 600.52 (Foreign institution) students benefit from having access to distance education, or the institution’s to remove internships and externships distance learning opportunities, assignment of credit hours, the from the list of program-related including while enrolled at a foreign Secretary would rely on the activities that may only be performed in institution, that authority is temporary requirements of the institution’s the United States at an eligible and tied to the national emergency accrediting agency or State approval institution, and specifying that declared on March 13, 2020. agency regarding qualifications for internships and externships may be We disagree with the commenter who instruction and whether the work provided by an ineligible organization objected to allowing students enrolled associated with the institution’s credit as described in proposed § 668.5(h)(2). in foreign institutions to complete up to hours is consistent with commonly Proposed § 668.5(h)(2) clarifies that the 25 percent of a program in the United accepted practices in higher education. limitations on written arrangements are States, and asserted that the Department Another commenter, offering not applicable to the internship or would be unable—(1) To determine the qualified support for the proposed externship portion of a program if the fiscal and academic quality of such changes, suggested that the Department internship or externship is governed by foreign institutions; or (2) to prevent clarify which fields would be suitable the standards of an outside oversight millions of students from receiving for distance education as the criteria for entity, such as an accrediting agency or degrees without completing the applying the standards in § 668.113. To government entity, that require the requirements deemed necessary by make these determinations, the oversight and supervision of the academic and industry leaders. We commenter offered that the Department institution, where the institution is further disagree that these changes should analyze whether the use of responsible for the internship or facilitate foreign institutions gaining distance education is appropriate for externship and students are monitored access to or leveraging control over title and sustains the quality of instruction in by qualified institutional personnel. IV financial aid. First, eligible foreign those online programs where a final We thank the commenter for writing institutions already participate in the program review or audit determination in support of the proposed revisions to Direct Loan program. The changes has assessed liabilities.

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Discussion: We thank the commenter the financial standards in § 668.15 to environment, public health or safety, or who expressed strong support for these institutions that undergo a change of State, local, or Tribal governments or proposed changes. In response to the ownership and control. The commenter communities in a material way (also commenter who suggested the noted that historically, the Department referred to as an ‘‘economically Department clarify which fields are has used only two of the financial significant’’ rule); suitable for distance education and measures in this section—the acid test (2) Create serious inconsistency or make determinations regarding the ratio and positive tangible net worth or otherwise interfere with an action taken appropriateness of that mode of positive unrestricted net asset or planned by another agency; instruction for individual programs, we standards—to evaluate institutions that (3) Materially alter the budgetary note that the applicable statute and changed ownership and control. The impacts of entitlement grants, user fees, regulations place no constraints on the commenter argued that applying, or or loan programs or the rights and fields of study in which an institution potentially applying, all of § 668.15 to obligations of recipients thereof; or may offer instruction using distance changes in ownership would constitute (4) Raise novel legal or policy issues education, nor do they grant the a significant change in Department arising out of legal mandates, the Department authority to make such practice that would more appropriately President’s priorities, or the principles determinations. Assessing the quality of call for a substantive rulemaking to stated in the Executive order. an educational program offered by an clarify the relationship between the two OMB has determined that this rule is an economically significant action and eligible postsecondary institution or sections of the regulations that address would have an annual effect on the establishing if that program may be financial responsibility—§§ 668.15 and economy of more than $100 million. offered using distance education is 668.171 through 668.175. In addition, This regulation will enable institutions entirely within the purview of the the commenter stated that the proposed to harness the power of innovation to institution’s accrediting agency and, in change to the title and applicability of expand postsecondary options, leverage some cases, the State agency with this section was presented during advances in technology to improve oversight responsibilities. Were an negotiated rulemaking as a technical student learning, and allow students to institution to offer a program through update rather than a substantive change. progress by demonstrating competencies distance education that its accrediting Given the significant concern of many rather than seat time. According to the agency or State agency had determined institutions and others for the Department’s FY 2020 Budget may not be taught using that modality, Department to initiate a rulemaking on Summary, Federal Direct Loans and Pell the Department would hold the financial responsibility standards and Grants accounted for almost $124 institution potentially liable for all of the composite score, the commenter billion in new aid available in 2018. the title IV funds disbursed to students urged the Department to withdraw this Given this scale of Federal student aid enrolled in that program. The proposed proposed change and defer making amounts disbursed yearly, the addition changes to § 668.113 do not, in any way, revisions to changes of ownership of even small percentage changes could compromise the Department’s oversight standards to a broader rulemaking result in transfers between the Federal authority in this area and, if anything, discussion. Government and students of more than clarify that institutions are accountable Discussion: In as much as the to accreditor and State agency $100 million on an annualized basis. Department intended to clarify that Pursuant to the Congressional Review requirements in offering programs § 668.15 applies only to institutions that Act (5 U.S.C. 801 et seq.), the Office of through distance education. undergo a change of ownership and Changes: None. Information and Regulatory Affairs control, we agree with the commenter designated this rule as a ‘‘major rule,’’ Past Performance (§ 668.174) that a broader discussion is warranted, as defined by 5 U.S.C. 804(2). particularly since the Department Under Executive Order 13771, for Comments: Several commenters intends to conduct future negotiated agreed that the proposal that an each new regulation that the rulemaking for the financial Department proposes for notice and institution is not financially responsible responsibility standards, including if a person who exercises substantial comment or otherwise promulgates that those applicable to changes of is a significant regulatory action under ownership or control over an institution ownership. also exercised substantial ownership or Executive Order 12866, and that Changes: We have withdrawn the imposes total costs greater than zero, it control over another institution that proposed changes to § 668.15. closed without a viable teach-out plan must identify two deregulatory actions. approved by that institution’s Executive Orders 12866, 13563, and For FY 2020, any new incremental costs accrediting agency and/or state 13771 associated with a new regulation must be fully offset by the elimination of regulatory body. The commenters Regulatory Impact Analysis believed the proposal change will help existing costs through deregulatory to protect students attending Under Executive Order 12866, the actions. The rule is considered an E.O. institutions that close and ensure that Office of Management and Budget 13771 deregulatory action. We believe individuals affiliated with an institution (OMB) determines whether this the effect of this regulation will be to that closed without a viable teach out regulatory action is ‘‘significant’’ and, remove barriers for development of plan, will not participate again in the therefore, subject to the requirements of distance and direct assessment title IV programs. the Executive order and subject to programs and their participation in title Discussion: The Secretary thanks the review by OMB. Section 3(f) of IV, HEA funding, reduce the commenters for their support. Executive Order 12866 defines a Department’s role in approving Changes: None. ‘‘significant regulatory action’’ as an programs, and promote innovation in action likely to result in a rule that higher education. We believe this Factors of Financial Responsibility may— regulatory action will be, in sum, (§§ 668.15 and 668.171–668.175) (1) Have an annual effect on the deregulatory. Comments: One commenter economy of $100 million or more, or As required by Executive Order questioned the need for, and adversely affect a sector of the economy, 13563, the Department has assessed the implications of, the proposal to apply productivity, competition, jobs, the potential costs and benefits, both

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quantitative and qualitative, of this likely to persist in and complete their a program offered entirely through regulatory action, and we are issuing programs and institutions will be much direct assessment. these regulations only on a reasoned more equipped to drive student The regulations acknowledge that determination that their benefits justify success.21 22 The regulations define or subscription-based programs are their costs. In choosing among clarify terms such as ‘‘correspondence permissible and provide instructions to alternative regulatory approaches, we course,’’ ‘‘distance education,’’ and institutions about how to disburse aid selected those approaches that ‘‘regular and substantive interaction,’’ and evaluate satisfactory academic maximize net benefits. Based on the and would streamline the current progress for students enrolled in these analysis that follows, the Department regulations to reduce the complexity of programs. These regulations also reduce believes that the regulations are performing clock-to-credit hour the steps involved in gaining approval consistent with the principles in conversions, disbursing aid to students for direct assessment programs, which Executive Order 13563. enrolled in subscription-based reduces the burden associated with We also have determined that this programs, and ensuring that programs administering these programs and regulatory action will not unduly align with program length restrictions, reduces the risk that an institution interfere with State, local, or Tribal while improving worker mobility across could invest resources in designing a governments in the exercise of their State lines. In some instances, the high-quality program that the governmental functions. definitions clarify terms used in, but not Department denies or unnecessarily In accordance with the Executive defined by, the HEA. In other cases, the delays. Institutions that better orders, the Department has assessed, regulations codify program understand the rules for administering both quantitatively and qualitatively, administration requirements that had Federal student aid in circumstances the potential costs and benefits of this previously been communicated only that depart from traditional delivery regulatory action. through sub-regulatory guidance, to give models are more likely to invest in In this regulatory impact analysis, we institutions the certainty they need to developing one of those models, and discuss the need for regulatory action, expand the postsecondary education administering it properly, thus avoiding the potential costs and benefits, net options that they make available to improper payments and improving the budget impacts, and regulatory students. student experience. alternatives we considered. For instance, while CBE programs The regulations also acknowledge Elsewhere in this section, under using direct assessment have been that, given the cost of developing Paperwork Reduction Act of 1995, we permitted by statute since 2006, most sophisticated technology-driven identify and explain burdens institutions continue to evaluate instructional tools or building specifically associated with information progress in CBE programs based on specialized facilities on college collection requirements. measures of time (or time equivalency) campuses, a rational approach may be to Need for Regulatory Action rather than a student’s demonstration of rely on a third-party provider with a competency. This is largely due to much broader reach than an individual The emphasis in the regulations is on uncertainties regarding how to disburse institution or on industry partners who clarifying the distinctions between and calculate return-to-title IV for have other incentives to maintain state- distance education and correspondence students enrolled in programs that of-the-art facilities and equipment. Until courses, affirming the permissibility of measure competencies rather than time. institutions fully understand what is team teaching models, improving As a result, the potential benefits of permissible in the development and worker mobility by accommodating CBE programs, such as accelerated implementation of innovative delivery differences in licensure requirements learning and completion as well as models, institutional leaders will across State lines, simplifying providing better assurances to remain largely risk averse, and solutions conversions between clock and credit employers that graduates are prepared that would otherwise help large hours to enable students to meet for workplace demands, were mitigated numbers of students will not be made licensure requirements while also because programs still were required to available to them. earning credits more likely to transfer to adhere to time-based title IV Finally, the regulations change the other institutions, establishing disbursement methodologies.23 These return of title IV funds and satisfactory regulations regarding subscription-based regulations provide needed certainty to academic progress provisions to reduce programs so that institutions can institutions about how to disburse aid to administrative burden and increase confidently implement programs that students enrolled in CBE programs. The flexibility for many postsecondary measure competencies rather than seat regulations also eliminate a significant institutions offering innovative time, and reducing barriers that limit legal obstacle to the adoption of direct programs. Reducing the amount of the number of direct assessment assessment CBE programs by permitting burden and expense associated with the programs available to students. title IV-eligible programs to be offered administration of the title IV, HEA These changes benefit institutions by partly through direct assessment and programs for unique or non-traditional enabling them to employ innovative partly using credit or clock hours. programs will also encourage methods and models without undue risk Eliminating this restriction makes it institutions to offer programs that do not of inadvertently violating title IV easier for institutions to experiment fit into the traditional mold and requirements. These options benefit with direct assessment without having improve the available offerings for students by expanding the number of to immediately establish and implement students. postsecondary education opportunities The Department believes this available to them, including those who 21 www2.deloitte.com/us/en/insights/industry/ regulatory action will have an annual may have been poorly served by more public-sector/improving-student-success-in-higher- effect on the economy of more than traditional ‘‘seat-time’’ instructional education.html. $100 million. If students have more models. By providing a larger variety of 22 www.texaspolicy.com/new-study-less- postsecondary options to select from postsecondary options and strategies expensive-competency-based-education-programs- and if more students persist to just-as-good-as-traditional-programs/. such as blended learning, adaptive 23 www2.deloitte.com/us/en/insights/industry/ completion, the number of students who learning, and competency-based public-sector/improving-student-success-in-higher- enroll for the full duration of a program education, students may be much more education.html. may increase. For example, although

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extremely limited in availability now, if programs.25 In many cases, more licensing boards may resist change–– there were fewer barriers to starting a students are taking at least one online although in the wake of COVID–19 we direct assessment program, there could class while enrolled in a traditional are seeing greater receptivity among be an increase in the number available, ground-based program. licensing boards to distance learning.30 and perhaps adult learners would find Correspondingly, there has also been As can be seen in Table 1 below, this to be a more satisfying way to learn, significant growth in the number of which is based on data collected by the or the only way they can juggle the students who are enrolled in exclusively National Center for Education Statistics demands of work, school, and family. online programs.26 We have also seen (NCES), while the percentage of While a limited number of significant redistribution of online students who are enrolled exclusively in experienced institutions with enrollments as some large non-profit online programs has increased slightly established direct assessment programs and public institutions have increased between 2013 and 2018, the largest may increase their program offerings, it their market share, while at the same growth has been in the percentage of is difficult to predict whether larger time some proprietary schools that once students who take at least one, but not numbers of students will be attracted to dominated distance education delivery all, of their classes online. The number higher education, in general, or if the are suffering sizeable enrollment losses of students engaged in online learning current number of students would be and even closures. Overall, growth in grew between 2013 and 2018 from distributed differently across the the number of students enrolled approximately 5.5 million to 6.9 landscape of available programs. Direct exclusively online has been moderate, million. This suggests that learning assessment programs may be increasing 22 percent between 2013 and modalities will change as innovation considerably more attractive to busy 2018. The number of students taking at creates a broader range of options. adult learners who would get credit for least one online class has increased 28 However, despite the increase in what they know from prior work or life percent between 2013 and 2018.27 28 29 enrollments in online options, the total experience.24 While current providers of CBE and number of postsecondary enrollments The demand for distance education direct assessment learning do so has been in decline for the last several programs has visibly increased in recent through distance learning modalities, it years. Therefore, it is clear that an years. In 2003–04, 15.6 percent of is possible that, as regulatory increase in the percentage of students undergraduate students took at least one requirements become clearer, those who enroll in online classes will, alone, distance education class and only 4.9 institutions that primarily provide not likely result in overall increases in percent of students were exclusively in ground-based education will also postsecondary enrollments. College distance education while by 2015–16, develop and implement CBE and direct enrollments are most dependent upon 43 percent of undergraduate students assessment programs. On the other economic cycles, so changes in delivery took at least one distance education hand, programs that lead to licensure models may be less important than class and approximately 11 percent may be slower to introduce CBE or macroeconomic conditions in were in exclusively distance direct assessment models since determining total enrollments.

TABLE 1

No-distance education At least one distance All-distance education All institutions Total students courses course, not all courses (#) (%) (%) (%)

2018 ...... 20,008,434 65.3 18.4 16.3 2017 ...... 19,765,598 66.3 18.0 15.7 2015 ...... 19,977,270 70.2 15.4 14.4 2013 ...... 20,375,789 72.9 14.1 13.1 4-year (total): 2018 ...... 13,901,011 64.3 18.0 17.6 2017 ...... 13,823,640 65.8 17.3 16.9 2015 ...... 13,486,342 69.7 14.4 15.9 2013 ...... 13,407,050 73.0 12.2 14.8 2-year (total): 2018 ...... 6,107,423 67.6 19.2 13.2 2017 ...... 5,941,958 67.5 19.5 13.0 2015 ...... 6,490,928 71.2 17.6 11.2 2013 ...... 6,968,739 72.7 17.6 9.8 Public: 2018 ...... 14,639,681 66.1 21.5 12.3 2017 ...... 14,560,155 67.8 20.8 11.4 2015 ...... 14,568,103 72.0 18.0 10.0 2013 ...... 14,745,558 74.6 16.7 8.7 Private Non-Profit: 2018 ...... 4,147,604 69.7 10.1 20.2

24 onlinelibrary.wiley.com/doi/full/10.1002/ nces.ed.gov/programs/digest/d18/tables/dt18_ 29 U.S. Department of Education, National Center cbe2.1008. 311.22.asp. for Education Statistics, IPEDS, Spring 2019, Fall 25 U.S. Department of Education, National Center 26 www.insidehighered.com/digital-learning/ Enrollment component (provisional data)., Number for Education Statistics, Digest of Education article/2019/12/11/more-students-study-online-rate- and percentage distribution of students enrolled at title IV institutions, by control of institution, Statistics 2018, Table 311.22. Number and growth-slowed-2018. student level, level of institution, distance 27 _ percentage of undergraduate students enrolled in nces.ed.gov/programs/digest/d18/tables/dt18 education status of student, and distance education distance education or online classes and degree 311.15.asp. status of institution: United States, fall 2018. programs, by selected characteristics: Selected 28 nces.ed.gov/programs/digest/d14/tables/dt14_ 30 ij.org/wp-content/themes/ijorg/images/ltw2/ years, 2003–04 through 2015–16. Available at 311.15.asp. License_to_Work_2nd_Edition.pdf.

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TABLE 1—Continued

No-distance education At least one distance All-distance education All institutions Total students courses course, not all courses (#) (%) (%) (%)

2017 ...... 4,106,477 71.3 9.5 19.2 2015 ...... 4,063,372 75.0 8.5 16.5 2013 ...... 3,974,004 80.0 6.9 13.1 Private For-Profit: 2018 ...... 1,221,149 41.0 8.6 50.4 2017 ...... 1,098,966 29.0 11.1 59.9 2015 ...... 1,345,795 35.9 8.6 55.5 2013 ...... 1,656,227 40.7 7.6 51.7

Growth in the number and percentage online at proprietary institutions as distance education courses and the of online learners was especially strong compared to 821,296 students who were value they place on campus activities, among private not-for-profit institutions, enrolled exclusively online at private and the decisions institutions make where students who took all courses non-profit institutions and 1.6 million about resuming on-campus programs. through distance education increased who were enrolled exclusively in online Additionally, as noted by the over 54 percent, from 13.1 to 20.2 programs at public institutions. These commenter, adverse economic percentage points. At 2-year data suggest that increases in conditions have been associated with institutions, the percentage of students enrollments among exclusively online increases in postsecondary enrollment, taking all courses online increased from courses do not necessarily result in particularly for programs with an 9.8 to 13.2 percentage points, almost a increased number of total postsecondary emphasis on career training and 35-percent jump from 2013 to 2018. enrollments. development. Postsecondary enrollment However, total enrollments at 2-year The information about the number increased substantially from 2007–08 to institutions during that same time and distribution of distance education 2010–11 as students responded to the period decreased by over 850,000 programs and students has clearly been recession during that time.31 Table 2 students. temporarily altered in 2020 because of reflects this increase and the significant While the percentage of students COVID–19 and the disruption of growth in proprietary enrollment during enrolled exclusively in distance ground-based campus operations during this period. The shape of the economic learning is highest among proprietary times of mandatory or recommended recovery from COVID–19 and the institutions (60 percent), relatively few quarantine. While some students may experience and outcomes of those who students are enrolled at these have withdrawn because of COVID–19 pursued postsecondary credentials institutions (only approximately 1 related circumstances, the Department during the last recession may affect how million of the nearly 20 million enrolled believes that most students continued big an increase is seen in future in postsecondary education in 2017 their program, albeit at least temporarily postsecondary enrollment. The were enrolled at proprietary in a distance format. The extent to Department believes it is reasonable to institutions). There have been sizable which this transformation continues in expect some additional increase in new decreases in total enrollments at the remainder of 2020 and beyond will distance education students, the proprietary institutions between 2013 depend on the further developments possibility of which is incorporated into and 2017, and in 2017 only 659,379 with respect to COVID–19, the the cost estimate in the Net Budget students were enrolled exclusively experience students have in their Impact section of this RIA.

TABLE 2 32—TRENDS IN FALL ENROLLMENT 2007–2013 BY CONTROL OF INSTITUTION

Public Private Proprietary Total Year Number Percent Number Percent Number Percent Number Percent

2007 ...... 13,603,772 ...... 3,595,466 ...... 1,478,231 ...... 18,677,469 ...... 2008 ...... 14,090,863 3.6 3,684,190 2.5 1,778,731 20.3 19,553,784 4.7 2009 ...... 14,936,402 6.0 3,793,751 3.0 2,123,270 19.4 20,853,423 6.6 2010 ...... 15,279,455 2.3 3,881,630 2.3 2,430,657 14.5 21,591,742 3.5 2011 ...... 15,251,185 ¥0.2 3,954,173 1.9 2,368,440 ¥2.6 21,573,798 ¥0.1 2012 ...... 15,000,302 ¥1.6 3,973,422 0.5 2,174,457 ¥8.2 21,148,181 ¥2.0 2013 ...... 14,856,309 ¥1.0 3,990,858 0.4 2,000,883 ¥8.0 20,848,050 ¥1.4

The CBE marketplace overall has also the postsecondary education direct assessment component of CBE seen significant attention from within community and general public, but the has not, potentially because of the

31 Foote, A. & Grosz, M. (2019). The Effect of content/dam/Census/library/publications/2018/ Statistics 2018, Table 303.20: Total fall enrollment Local Labor Market Downturns on Postsecondary demo/P20-580.pdf). in all postsecondary institutions participating in Enrollment and Program Choice. MIT Press Barr, Andrew, and Sarah Turner. 2012. ‘‘Out of title IV programs and annual percentage change in Journals. a Job and into School: Labor Market Policies and enrollment, by degree-granting status and control of Schmidt, Erik, ‘‘Postsecondary Enrollment Before, College Enrollment during the Great Recession.’’ institution: 1995 through 2017. Available at https:// Working Paper, University of Virginia. During, and Since the Great Recession,’’ P20–580, nces.ed.gov/programs/digest/d18/tables/dt18_ Current Population Reports, U.S. Census Bureau, 32 U.S. Department of Education, National Center 303.20.asp. Last Accessed May 26, 2020. Washington, DC, 2018. (https://www.census.gov/ for Education Statistics, Digest of Education

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length of time it takes for the Four-hundred-thirty of the 501 One of the three top barriers to Department to review applications for respondents reported being interested implementing CBE programs, as cited by direct assessment programs, and in, or in the process of, implementing over 50 percent of the responding because several audits by the CBE programs, while 71 indicated no institutions, was ‘‘Federal student aid Department’s OIG in the past decade interest. Some 57 institutions stated that regulations.’’ The other two key barriers have been sharply critical of the they were currently offering at least one to entry included the need to change oversight of direct assessment by the CBE program, with these institutions, in business processes and the high costs Department and accrediting aggregate, offering a total of 512 CBE associated with start-up. While the agencies.33 34 35 The Department also programs. The largest portion of survey results point to a guarded believes that another recent report by programs (427 of 512) was at the optimism on the growth of CBE the Department’s Inspector General, undergraduate level with 85 at the programs, this optimism is tempered by which found one institution’s team graduate level. The highest a perception that the regulatory climate teaching model did not comply with concentration of CBE programs was in needs to be flexible and conducive to title IV, HEA requirements, may have the fields of nursing and computer expansion of CBE programs; however, deterred other institutions that were science. Given the requirement for the report suggests that it is crucial to considering the development of CBE nursing students to participate in preserve consumer protections. programs. Even the threat of an audit clinical rotations, it is likely that CBE The Department agrees with this finding recommending the return of programs in nursing were designed to theme, as we noted in the executive hundreds of millions of dollars in title target students who are already summary of the NPRM that ‘‘the IV funds could dissuade institutions registered nurses (with an associate purpose of these distance education and innovation regulations is to reduce from pursuing such innovations. This degree) and now wish to complete a barriers to innovation in the way may still be the case even if audit bachelor’s degree. Over 50 percent of institutions institutions deliver educational recommendations are not accepted by reported CBE undergraduate materials and opportunities to students, the Department.36 enrollments of no more than 50 students and assess their knowledge and The Department’s data does not break per program while only a small number understanding, while providing out information about competency- of institutions (approximately 4 percent) reasonable safeguards to limit the risks based education students to the same enrolled more than 1,000 undergraduate to students and taxpayers.’’ extent as it does for distance education students in CBE programs at their Therefore, these final regulations send students, but a number of surveys and institution. Thus, assuming these a signal to the higher education articles provide some background on findings are characteristic of the overall community that the Department is existing programs. According to the CBE landscape, it appears that most committed to reducing regulatory 2018 National Survey of Postsecondary institutions are still in the early stages burden to make way for responsible Competency-Based Education of implementing CBE programs with innovations, such as CBE programs and (NSPCBE), co-authored by American only a handful of institutions operating direct assessment programs. Further, the Institutes of Research (AIR) and large-scale programs. regulations would enable institutions to Eduventures, a majority of respondents Similar results were described in the develop new title IV disbursement believe that CBE will experience strong 2019 survey that had 602 respondents models, such as subscription-based growth although they also perceive that with 54 percent from public programs, to align the delivery of aid a number of barriers to implementation institutions, 42 percent from private, with programs that allow students to remain.37 The survey was sent to over nonprofit institutions and 4 percent complete as many classes as possible 3,000 institutions including primarily 2- were from proprietary institutions.38 Of during a given period of time, but to and 4-year institutions listed in the the 588 programs offered by 64 also pace themselves appropriately Integrated Postsecondary Education institutions, 84 percent were based on other demands and learning Data System (IPEDS). About 69 percent undergraduate and 16 percent were needs. of respondents were 4-year institutions graduate programs. The majority of While technology has transformed the and 31 percent were 2-year institutions. existing programs remain small, with 53 way almost every industry in America A total of 501 institutions replied to the percent with enrollment under 50 does business, it may have not survey, representing a survey response students.39 As in the 2018 survey, fundamentally transformed the way we rate of 16 percent. It is possible that the popular fields for competency-based educate students, monitor their survey may suffer from selection bias if programs include nursing, computer progress, or diagnose when and what the institutions that completed the and information sciences, and business kind of additional support services a survey were more likely to be those administration.40 Seventy-seven percent student needs. Many institutions are institutions considering adding CBE of responding institutions with educating postsecondary students today programs, which would mean that the competency-based programs reported in a very similar manner to methods and practices used a hundred years ago. survey results could not be accurately that they are eligible for Federal Nonetheless, there have been some early projected to the full postsecondary financial aid. Of those, 75 percent report innovators who have made advances system. they maintain that eligibility by using a course structure to map to credit despite the Department’s lagging in this 41 area. In that regard, this rule represents 33 www2.ed.gov/about/offices/list/oig/ hours. auditreports/fy2014/a05n0004.pdf. the Department’s effort to catch up with 34 www2.ed.gov/about/offices/list/oig/ 38 American Institutes for Research, State of the innovations that are already taking place auditreports/fy2015/a05o0010.pdf. Field—Findings from the 2019 National Survey of at forward-looking institutions. We seek 35 www2.ed.gov/about/offices/list/oig/ Postsecondary Competency-Based Education, to promote continuing innovation, both auditreports/fy2016/a05p0013.pdf. available at www.air.org/sites/default/files/ in distance learning and ground-based 36 National-Survey-of-Postsecondary-CBE-Lumina- www2.ed.gov/documents/press-releases/ education. The regulations update our 20190111-wgu-audit.pdf. October-2019-rev.pdf. 37 www.air.org/sites/default/files/National- 39 Id., p. 25. definitions of ‘‘distance education’’ and Survey-of-Postsec-CBE-2018-AIR-Eduventures-Jan- 40 Id., p.26. ‘‘correspondence courses’’ to 2019.pdf. 41 Id., p.31. acknowledge that as a result of CBE and

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direct assessment, many students focused on the RIA analysis and Department did waive several enrolled in distance education progress emphasized that the Department should provisions in line with the proposed at their own pace, which is a have accounted for the effects of changes in these final regulations to characteristic that in the past was COVID–19 and the resulting increase in facilitate the response to COVID–19. For determinant of a correspondence course. distance education. The commenter example, the Department waived With the introduction of adaptive noted that previous recessions had preapproval requirements that would learning and other technologies, a resulted in significant increases in have otherwise delayed institutions in student enrolled in distance education postsecondary enrollment and that the their efforts to move to distance is likely to be learning at his or her own specifics of the COVID–19 situation learning, and it permitted accreditors to pace, although that learner continues to would likely result in students choosing develop policies and procedures to have regular and substantive distance education options over enable rapid transition to distance interactions with the instructor(s). The traditional, campus-based programs. learning without going through the regulations acknowledge that adaptive The commenter also pointed out that regular policy-making process that learning can play an important role in distance education and competency- would have taken months to a student’s educational experience and based programs are often attractive to accomplish. In addition, the Department can facilitate regular and substantive veterans, students of color, low-income permitted students enrolled at foreign interaction between students and students, students who are parents, or institutions to complete up to 25 instructors by providing students with working students who are percent of their program at an eligible continuous feedback regarding their disproportionately affected by the U.S. institution or an ineligible foreign learning. The Department appreciates COVID–19 health effects and economic institution so that students whose the considerable effort of negotiators to disruption. The commenter encouraged primary institution suspended recommend and agree to regulatory the Department to rescind the rule, open operations could continue their changes that promote and enable a new round of negotiated rulemaking education elsewhere without flexibility, while at the same time in light of COVID–19, or, at least to redo jeopardizing their continued participate ensuring the preservation of student the cost estimates and regulatory in title IV programs. The consequences protections and the responsible analysis for these final regulations to of COVID–19 and subsequent economic distribution of title IV, HEA assistance. take COVID–19 impacts into account. disruption are part of the conditions and It is the combination of changes The Department appreciates the environment within which these addressed in these final regulations that comment and recognizes that the NPRM regulations will have an impact, and cumulatively would have sufficient was published on April 2, 2020, when while it may be impossible to impact on the economy to warrant we were still understanding the impact definitively distinguish between the classifying this regulation as that COVID–19 could have on effects of the regulations versus the economically significant. Specifically, enrollments in distance learning. The effects of COVID–19 on the transition to while there could be increases in the rapid transformation of the distance learning, we attempt in this number of students seeking title IV, postsecondary educational landscape as RIA to do so. In light of the recent, HEA assistance, or the number of a result of COVID–19 supports the COVID–19 related transformation in students who persist to completion, postsecondary education, the these increased Federal expenditures Department’s point that the creation of innovative postsecondary programs, Department has updated some of the could result in the preparation of a more information about such programs and capable workforce and a better-educated including distance education and has considered how the experience over citizenry. As more adults are required to competency-based programs, will be the past months may increase or obtain additional postsecondary courses driven by student demands and other accelerate institutions’ plans to develop or credentials throughout their events that generate demand. The additional distance or competency- professional lifetime, the availability of changes in these final regulations allow based programs. This is addressed in the more efficient learning opportunities, those student-driven program Net Budget Impact section of this RIA. such as CBE and direct assessment development decisions to be learning, will enable more adults to implemented more efficiently while Costs, Benefits, and Transfers evolve in their careers. maintaining appropriate safeguards for students. The Department anticipates that the Summary of Comments and Changes Another consideration is that the cost regulations would affect students, IHEs, From NPRM estimate for the NPRM and these final accrediting agencies, and the Federal As described throughout this regulations is intended to capture the Government. State government may also preamble, the Department considered a impacts of the regulatory changes. The be impacted in some instances. Table 3 number of comments and made some rapid transformation to distance refers to key changes described in the technical corrections and changes in education occurred independent of identified preamble sections and these final regulations. One comment these final regulations, although the summarizes potential impacts.

TABLE 3—SUMMARY OF KEY CHANGES

Change Affected parties Impacts

Reg Section 600.2—Definitions

Create definition for ‘‘academic engagement’’ ... Students/Institutions/ Clarifies and expands the types of activities that verify student enroll- Federal Government. ment for the purpose of performing return to title IV funds calcula- tions while standardizing the Department’s definition of ‘‘academic engagement’’ for use elsewhere in the regulations. Prevents im- proper payment of title IV funds to students who are not legiti- mately engaged in postsecondary learning.

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TABLE 3—SUMMARY OF KEY CHANGES—Continued

Change Affected parties Impacts

Defines ‘‘clock hour’’ for distance education ...... Students/Institutions/ Codifies current policy allowing institutions to record clock hours Federal Govern- earned through distance education but requires such hours to be ment/Accrediting taught through synchronous or, as permitted by these final regula- Agencies. tions, asynchronous instruction by the instructor. Clock hours may be earned through distance education only when permitted by li- censing boards or other regulatory entities that require enrollment to be measured in clock hours. Regulatory clarity may encourage greater use of distance education to provide the didactic portion of occupationally focused programs, thus expanding access to stu- dents who are working, raising families, or live far from campus. As described in the preamble and further discussed after this table, potential concerns with allowing asynchronous instruction include a lack of direct interaction and the use of the hours for the comple- tion of homework. Modifies definitions of ‘‘correspondence course’’ Students/Institutions/ Benefits students by encouraging the development of programs and ‘‘distance education’’ to clarify that it is Federal Govern- taught by instructional teams consisting of experts in the various permissible to employ a team approach to in- ment/Accrediting elements of high-quality instruction, as opposed to a more tradi- struction and clarifies that the requirements Agencies. tional model that relies on a single faculty member to meet all of for regular interaction are met if the institution the student’s learning needs. Benefits students and institutions by provides opportunities for interaction, even if potentially reducing some of the costs of instruction. Reduces the each student does not take advantage of need for institutions to require students to engage in less sub- each opportunity. Removes self-pacing from stantive work solely for the purpose of documenting that regular definition of ‘‘correspondence course’’ as it is and substantive interaction took place in order to document that a not a necessary characteristic for such course is offered using distance education and is not a cor- courses. respondence course. Refines definition of ‘‘credit hour’’ to reflect cur- Students/Institutions/ Maintains time-based standard to ensure consistency among institu- rent sub-regulatory guidance in DCL GEN– Federal Government. tions regarding the awarding of academic credit, while also cre- 11–06 that references a variety of delivery ating the necessary flexibility to consider that many new edu- methods. cational delivery models are not based on seat time. Codifies flexi- bility provided in sub-regulatory guidance under the Department’s Dear Colleague Letter GEN–11–06. Amends definition of ‘‘distance education’’ by Students/Institutions/ Updates regulations to remove references to outdated forms of elec- removing references to specific kinds of elec- Federal Govern- tronic media and to ensure that new forms of electronic media will tronic media used in providing instruction, rel- ment/Accrediting be covered by the regulations in the future. Acknowledges that the egating the determination of instructor quali- Agency. use of interactive learning technologies can facilitate regular and fications to accrediting agencies, including substantive interaction between students and instructors. Benefits the use of interactive technologies to meet institutions by more clearly explaining regulatory compliance re- the requirements for ‘‘substantive inter- quirements for educational innovations, thus reducing risk and po- action,’’ and establishing standards for ‘‘reg- tential financial penalties for those institutions pursuing educational ular interaction’’ that include predictable op- innovation. Benefits students by expanding learning opportunities portunities for interaction and monitoring of and flexibilities, including personalized learning, without unneces- student engagement. sary bureaucratic hurdles for the purpose of meeting title IV re- quirements for regular participation. Benefits the Federal Govern- ment by ensuring that students are receiving high-quality education when using Federal student aid to pay for that education. Benefits students by ensuring that online learning includes meaningful inter- actions with qualified instructors who can monitor and improve stu- dent learning. Clarifies definitions of ‘‘incarcerated student’’ Students/Institutions/ Reflects current practice and sub-regulatory guidance and clarifies and ‘‘juvenile justice facilities’’. Federal Government. that individuals in certain correctional facilities may be eligible for Pell grants, but limits the use of Pell grants to appropriate instruc- tional expenses. Amends definition of ‘‘nonprofit institution’’ to Institutions ...... Redundant language removed; no impact anticipated. delete reference to 501(c)(3) tax status.

Reg Section 600.7—Conditions of Institutional Eligibility

Establishes that a student is not considered to Students/Institutions ... Impact minimal based on the small number of correspondence be ‘‘enrolled in correspondence courses’’ until courses operating in the country. Potential benefit to institutions at least 50 percent of the student’s classes and students is that enrollment in a single or small number of cor- are correspondence courses. respondence courses does not cause a student to be counted against the institution for eligibility purposes. Provides greater flexi- bilities for students who are managing multiple life demands or for whom travel to the campus is difficult or for whom technology ac- cess is limited, by allowing them to participate in a small number of correspondence courses without putting title IV participation for the institution at risk.

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TABLE 3—SUMMARY OF KEY CHANGES—Continued

Change Affected parties Impacts

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

Limits Secretary’s approval of direct assess- Students/Institutions/ Acknowledges that the Department’s role in approving direct assess- ment programs at the same academic levels Federal Government. ment programs is limited to ensuring the integrity of the title IV, to the first such program at an institution. HEA programs, and assumes that if an institution can disburse aid properly to students in one program at a given academic level, it is likely to be able to do so for additional programs. Ensures that an institution that creates a first new direct assessment program at a new academic level is reviewed by the Department to ensure ap- propriate administration of title IV funds. Encourages institutions that have demonstrated the ability to design and operate a direct assessment program to expand that model of instruction and en- ables institutions to respond more quickly to student and workforce needs. Reduces a potential barrier or reduces time required to es- tablish a direct assessment program. A consequence of eliminating the requirement that the Secretary approve each new direct as- sessment program at the same academic level is that it may lead to the rapid expansion a direct assessment programs without the guardrail of the Department’s review.

Reg Section 600.20—Notice and application procedures for establishing, reestablishing, maintaining, or expanding institutional eligibility and certification

Requires the Secretary to provide timely review Students/Institutions/ Benefits institutions and students by allowing faster development of of new program applications and enables in- Federal Government. new programs, especially those responsive to workforce develop- stitutions to start advertising programs early ment needs. Reflects role of accreditors in assessing program enough to enroll a full cohort of students. quality and Department’s intent to rely on accreditor’s assessment except in rare circumstances related to the Department’s statutory and regulatory requirements or specific requirements of the institu- tion’s PPA. Protects an institution from Department’s failure to act on an application for new program approval and reduces the likeli- hood that delays on the Department’s part will require an institution to navigate the State and accreditor approval process a second time.

Reg Section 600.21—Updating Application Information

Adds reporting requirements for (1) the addition Institutions/Federal With the elimination of the requirement for the Department to ap- of second and subsequent direct assessment Government. prove subsequent programs, this allows the Department to monitor programs at the same academic level. the growth and development of direct assessment programs. Also allows cross-checking with accreditors to be sure program or ar- rangement has approval.

Reg Section 600.52 and 600.54 (related to Foreign Institutions)

Amended to permit written arrangements with Students/Institutions/ Benefits students by allowing them to take Federal student loans to an eligible institution in the United States to Federal Government. enroll at certain foreign institutions but retain the ability to take a provide no more than 25 percent of a stu- limited number of courses in the U.S., such as during summer dent’s program. breaks. Also enables title IV-participating students enrolled at for- eign institutions to pursue qualifying internships or externships in the United States at entities other than eligible institutions. Benefits students by allowing them to find internships or externships in a variety of settings in which they may wish to pursue a career. Amended to permit written arrangements be- Students/Foreign Insti- Allows students at eligible foreign institutions to take courses at other tween a foreign institution and an ineligible tutions/Federal Gov- approved foreign institutions in that country, thus benefiting from entity for no more than 25 percent of a stu- ernment. the same opportunities as their international peers enrolled at for- dent’s program; provided that the ineligible eign schools. Broadens educational opportunities available to U.S. entity satisfies definition of ‘‘foreign institu- students at foreign institutions while maintaining reasonably equiv- tion’’. alent quality. However, while the regulations require the ineligible institution to meet the requirements of the foreign country in which it is located, these arrangements would not be overseen by a rec- ognized accrediting agency or the Department, outside of the regu- latory requirements, which may make it difficult to ensure aca- demic quality of the coursework offered by the ineligible foreign in- stitution.

Reg Section 668.2—Definitions

Eliminates definition of Academic Competitive- None ...... ACG program is no longer authorized by HEA. Removing definition ness Grant (ACG). has no impact on students or institutions.

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TABLE 3—SUMMARY OF KEY CHANGES—Continued

Change Affected parties Impacts

Amends ‘‘full-time student’’ to define require- Students/Institutions/ Provides clarity for institutions regarding subscription-based models ments for subscription-based programs and Federal Government. and how they can be structured to permit students to receive title to prevent an institution offering such a pro- IV, HEA assistance. gram from including repeated courses for which a student has already received a pass- ing grade in a student’s enrollment status. Defines ‘‘subscription-based program’’ for title Students/Institutions/ Revision from NPRM expands use of subscription-based model to all IV disbursement purposes as standard or Federal Government. types of programs, not just direct assessment programs. Benefits non-standard term program for which an in- all parties by clarifying how title IV aid disbursements work for sub- stitution charges a student for a term with the scription-based programs. Provides flexibility for students to take expectation that the student completes a advantage of self-pacing inherent in this program model while lim- specified number of credit hours within the iting potential for abuse by requiring completion before subsequent term. Clarifies that no specific timeframe ap- disbursements of aid. Some protection for students with possibility plies for the terms and that students must of one single subscription period for catch-up work before loss of complete a cumulative number of credit title IV eligibility. Clarity provided by definition may increase the es- hours (or the equivalent) during or following tablishment of direct assessment programs or other programs that the term before receiving another disburse- could benefit from this approach, to the benefit of the institutions ment of title IV funds. that offer them, and as options for students, including the non-tra- ditional students that have taken advantage of existing CBE pro- grams. Provides an opportunity for students who fall behind in a subscription-based program to catch up and get back on track. A potential risk of expanding subscription-based model beyond direct assessment programs include the possibility that students in sub- scription-based programs will quickly accrue debt early in their pro- grams while falling behind in their coursework. Requires institutions to establish a single enroll- Students/Institutions/ Provides consistency for students regarding expectations for comple- ment status that applies to a student through- Federal Government. tion of coursework in a subscription-based program. Offers clarity out his or her enrollment in a subscription- to institutions regarding requirements for structuring such programs based program, with the student able to to ensure access to Federal aid. Improves program integrity by lim- change their enrollment status once in an iting options for students to avoid completion requirements through academic year. changes in enrollment status. Explains method for determining number of Students/Institutions/ Benefits institutions by clarifying how to match disbursements to credit hours (or the equivalent) that must be Federal Government. pace of each student’s progress. Benefits the Federal Government completed before subsequent disbursements by establishing a clear completion standard for students to meet of title IV aid. before they receive subsequent disbursements of Federal aid. Benefits students by allowing for an additional term to ‘‘catch-up’’ on coursework before losing title IV eligibility. Modifies definition of ‘‘third party servicer’’ to None ...... Reflects current practices and terminology. No impact anticipated on use ‘‘originating loans’’ instead of ‘‘certifying any party. loan applications’’.

Reg Section 668.3—Academic Year

Revises definition of ‘‘week of instructional Students/Institutions/ Benefits institutions by clarifying requirements for building instruc- time’’ as it pertains to an institution’s ‘‘aca- Federal Government. tional calendars in programs offered asynchronously through dis- demic year.’’ One part of the definition would tance education and may spur additional innovation given better cover traditional postsecondary programs and understanding of compliance thresholds. Benefits students and the remain unchanged and the other would cover Federal Government by ensuring that institutions make appropriate programs using asynchronous coursework instructional materials and support available during instructional through distance education or correspond- periods in exchange for Federal student aid. As noted by com- ence courses. For these courses, defines it menters, the interactions in asynchronous courses may not be pre- as a week in which the institution ‘‘makes dictable. available the instructional material, other re- sources, and instructor support necessary for academic engagement and completion of course objectives’’.

Reg Section 668.5—Written Arrangements to Provide Educational Programs

Clarifies that institutions using written arrange- Institutions/Faculty/Stu- Enables institutions to keep pace with changing needs of employers ments may align or modify their curriculum to dents/Accrediting and protects non-accredited providers from having their edu- meet requirements of industry advisory Agencies. cational programs or technologies manipulated by others. This is boards or other industry-recognized important since providers through written arrangements must prove credentialing bodies rather than going the efficacy of their programs, so outsiders should not be allowed through a mandatory, and typically lengthy, to modify or change the program in a way that could influence shared governance decision-making process. those results. Ensures that students are better prepared for entry to the workforce in certain occupations. Could create tension with faculty and reduce their influence over certain aspects of the cur- riculum but could require proper oversight by partnering institutions and accreditors to reduce risk of harm to students.

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TABLE 3—SUMMARY OF KEY CHANGES—Continued

Change Affected parties Impacts

Clarifies calculation of percentage of program Students/Institutions/ Ensures that degree-granting institutions retain academic control of a that could be provided by an ineligible institu- Accreditors/Ineligible program and maintain the responsibility for delivering at least half tion. Entities involved in of an academic program. Setting out a clear methodology makes Written Arrange- clear when and how written arrangements may be used but en- ments. sures that colleges and universities are not simply outsourcing in- structional responsibilities to non-accredited providers. Benefits in- stitutions by improving speed with which accrediting agencies re- view and approve such arrangements. While the accrediting agen- cy can deny the request for a written arrangement, increasing the speed for review and expanding the options for staff that can re- view these arrangements could make for a less robust or rigorous review. Benefits students and institutions by allowing institutions to engage other providers, such as unions and apprenticeship pro- viders, who may have specialized facilities and uniquely trained employees who can serve as teachers and mentors. Benefits insti- tutions by allowing them to offer educational opportunities or tech- nologies that are developed by outside providers who may be bet- ter situated to invest in new technologies due to their opportunities to deliver them to a larger population of students than are typically at a single institution. Clarifies that written arrangements are not nec- Institutions/Students ... Offers clarity for institutions to ensure that use of written arrange- essary for certain other interactions with out- ments does not result in fewer credits being accepted through side entities. Specifically, the limitations in transfer or awarded through prior learning assessment. Benefits § 668.5 do not apply to the transfer of credits, students by reducing costs and time to completion for those who use of prior learning assessment or other bring pre-existing knowledge and skills to the classroom. non-traditional methods of providing aca- demic credit, or the internship or externship portion of a program. Removes 50 percent limitation on written ar- Institutions ...... Allows greater opportunities for institutions to share administrative or rangements between two or more eligible in- instructional resources when under shared ownership. stitutions under joint ownership. Ineligible entities would not, as was proposed in Institutions ...... Allows institutions to use third parties to deliver portions of programs, the NPRM, have to demonstrate experience to integrate advanced technologies, enable student access to spe- in delivery and assessment of the program or cialized facilities and experts, expand the number of learning op- portion the ineligible entity delivers and that tions available to students and potentially increase the number of the programs have been successful in meet- students an institution can responsibly serve. While written ar- ing stated learning objectives. rangements may reduce the cost of delivering certain kinds of in- struction, constructing specialized facilities, or developing new technologies, the written arrangement will have associated costs that could reduce revenue. Students could have access to newer technologies or higher quality instruction than could be provided by the institution. In the final regulations, ineligible entities will not be required to demonstrate prior experience and success in meeting learning objectives for portions of programs they deliver. However, there are potential risks inherent in contracting with an ineligible entity that lacks demonstrable experience. The outside provider could be of lower quality, have less of a vested interest in the stu- dent’s success, or lack the necessary resources to provide the educational services agreed upon in the written arrangement.

Reg Section 668.8—Eligible Programs

Eliminates consideration of ‘‘out-of-class’’ hours Institutions ...... Aligns the Department’s requirements with those of most licensing for purposes of performing clock-to-credit boards and simplifies the conversion process. Enables students to conversions for non-degree programs that meet licensure requirements in programs that are title IV eligible are subject to those requirements. and helps institutions by allowing them to comply with the reason- able length requirements while also allowing credit hour to clock hour conversions. May result in additional title IV funds expendi- tures for programs currently lacking any out-of-class components.

Reg Section 668.10—Direct Assessment Programs

Revises definition of ‘‘direct assessment’’ and Institutions ...... Simplifies and clarifies requirements related to direct assessment eliminates separate definitions of key terms programs. for direct assessment programs, referring in- stead to requirements elsewhere in regula- tions.

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TABLE 3—SUMMARY OF KEY CHANGES—Continued

Change Affected parties Impacts

Eliminates certain prohibitions on types of Students/Institutions/ Allows institutions to provide students with more options so that coursework that can be offered through direct Federal Government. learners can select the learning modality that best meets their assessment, including remedial coursework, needs. Allows students to take some traditional courses even if and enables ‘‘hybrid’’ programs to provide some of their other courses are direct assessment courses. Rec- students options to take some direct assess- ognizes that co-remediation is a promising practice, and direct as- ment courses and some traditional or dis- sessment classes may increase the number of students who can tance learning courses. participate in co-remediation programs while taking other classes. Codifies current policy by adding prohibition on Students/Institutions/ Benefits students and taxpayers by discouraging institutions from paying title IV, HEA funds for credit earned Federal Government. charging excessive fees for conducting prior learning assessment solely through prior learning assessment. and ensures that taxpayer dollars are not being used to pay institu- tions for instruction that they are not providing.

Reg Section 668.13—Certification Procedures

Automatic renewal of an institution’s certifi- Institutions ...... Benefits institutions by setting a time limit for the uncertainty of cation if the Secretary does not make a deci- month-to-month eligibility. With the option of provisional recertifi- sion on an application for recertification sub- cation, the Department retains sufficient control over recertification mitted no later than 90 calendar days before process but cannot use certification delays to prevent institutions its PPA expires within 12 months. from starting new programs or making other necessary changes.

Reg Section 668.14—Program Participation Agreement

Clarifies requirements related to making data Institutions ...... Benefits institutions by reducing the amount of information that must available to prospective students about the be disclosed to students to enable institutions to include graduation most recent employment statistics, gradua- rates or employment statistics in their marketing materials. Benefits tion statistics, or other information to substan- students by improving the accuracy and truthfulness of published tiate the truthfulness of its advertising that outcomes data, and by making an appropriate amount of informa- uses job placement rates to attract students. tion available to students without overwhelming them with extra- neous data. Maintains the requirement for institutions to make available any information needed to substantiate the truthfulness of the institution’s advertisements about job placement or graduation rates. Eliminates requirements to provide the source ...... Considered redundant to requirement to provide data and other infor- of such statistics, associated timeframes, and mation to substantiate truth in the institution’s advertising. methodology. Aligns program length to occupational require- Students/institutions .... Allows institutions to create programs that meet professional licen- ments. Limits program length to 150 percent sure requirements in multiple States, thus expanding the potential of minimum program length for the State in pool of students served and the number of job opportunities avail- which the institution is located or 100 percent able to graduates. Students benefit by increased occupational mo- of the minimum program hours for licensure bility and, in some cases, being able to go to school in a lower in an adjoining State. cost State but work upon graduation in a different State where wages are higher. Conversely, if an institution increases program length, a student may have to pay more to meet requirements of a State in which the student does not plan to work. Requires updates to teach-out plans after spec- Students/Institutions/ Allows accrediting agencies to gather more information from institu- ified negative events. Accrediting Agencies. tions that will be helpful to triad partners in assisting students find transfer and teach-out opportunities, and retain access to their academic records, when a school closure occurs. Requires institu- tions to update teach-out plans in instances where risk of closure increases.

Reg Section 668.22—Treatment of Title IV Funds When a Student Withdraws

Adds several exceptions to determination a stu- Students/Institutions ... Benefits institutions by not requiring them to return title IV funds sim- dent has withdrawn, including early comple- ply because a student is a faster learner. Benefits students by al- tion of requirements for graduation, comple- lowing them to complete courses at a quicker pace and still retain tion of module(s) containing 49 percent or full title IV eligibility. Could improve completion rates and reduce more of the days in the payment period, or time to completion if students are not required to participate in completion of coursework equal to or greater busy work if they finish the legitimate work required by the course than the institution’s requirements for a half- more quickly than other students. time student. Applies 45-day time limit on delaying with- Students/Institutions ... Improves consistency of regulations as they apply to programs with drawal for students who cease attendance to different types of academic calendars and addresses concerns standard term programs. Eliminates ref- about long periods of non-attendance by students. Ensures that in- erences to modules for nonterm programs stitutions perform return of title IV calculations when students and revises timeframes for allowing students cease attendance for long periods of time without beginning an ap- to provide written confirmation of intent to re- proved leave of absence. turn without beginning an approved leave of absence.

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TABLE 3—SUMMARY OF KEY CHANGES—Continued

Change Affected parties Impacts

Clarifies requirements for determining the num- Institutions/Federal Simplifies and clarifies requirements for establishing the denominator ber of days in the payment period or period Government. of the return of title IV funds calculation when a student is enrolled of enrollment for a student who is enrolled in in a program that uses modules. May result in a greater amount of a program offered using modules. Requires title IV funds being returned for a limited number of students who an institution to include all the days in mod- enroll in numerous modules during a payment period or period of ules that included coursework used to deter- enrollment but fail to attend those modules. mine the student’s eligibility for title IV, HEA assistance. Eliminates references to programs under which ...... No impact anticipated for technical changes incorporating current pol- financial aid is no longer disbursed. Adds icy. Iraq and Afghanistan Service Grants to types of aid subject to the return of title IV funds calculation and clarifies order for application of returned funds.

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

Removes references to net present value when ...... No impact anticipated for technical changes. including institutional loans in the 90/10 cal- culation.

Reg Section 668.34—Satisfactory Academic Progress

Eliminates pace requirements for satisfactory Students/Institutions/ Reduces burden on institutions for making pace-based title IV cal- academic progress for subscription-based Federal Government. culations for students in subscription-based programs. Improves programs. flexibility for students by allowing them to determine the pace of their learning without certain limits. Allows maximum timeframe for undergraduate Students/Institutions/ Increases flexibility for institutions and students and provides new op- programs measured in credit hours to be ex- Federal Government. tions for monitoring student progress when traditional semester- pressed in calendar time in addition to cur- based time constraints conflict with a student’s work or life respon- rent credit hour measurement. Limited to 150 sibilities. However, sets outer limit for use of aid to ensure that stu- percent of published length of program. dents are progressing through their program and using Federal student aid funds efficiently.

Reg Section 668.111—Scope and Purpose and 668.113—Request for Review

Indicates that, for final audit or program review Institutions/Federal Conforms with changes to definitions of ‘‘distance education’’ and determinations related to classification of a Government. ‘‘credit hour’’ and provides regulatory clarity that accreditors are program as distance education or the assign- the triad member given the responsibility of monitoring program ment of credit hours, the Secretary will rely quality and establishing standards for academic quality, faculty cre- on institution’s accrediting agency or State dentials, and effective distance learning. agency requirements.

Reg Section 668.164—Disbursing Funds

Establishes disbursement requirements specific Students/Institutions/ Conforming change with disbursement pattern for subscription-based to subscription-based programs. Sets the Federal Government. programs in § 668.2 to enforce requirement that no disbursements later of 10 days before the first day of class- be made until the student has completed the appropriate credit es in the payment period or the date the stu- hours. dent completed the cumulative number of credit hours associated with student’s enroll- ment status in all prior terms attended.

Reg Section 668.171—General

Allows the Secretary to determine an institution Institutions/Federal Codifies current practice; no impact expected. is not financially responsible if the institution Government. does not submit its financial and compliance audits by the date permitted and manner re- quired under § 668.23.

Reg Section 668.174—Past Performance

Adds the term ‘‘entity’’ or ‘‘entities’’ to various Institutions/Federal Allows the Department to consider more ownership structures when provisions as ownership may be vested in an Government. evaluating past performance. entity or an individual.

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TABLE 3—SUMMARY OF KEY CHANGES—Continued

Change Affected parties Impacts

Clarifies that institution is not financially respon- Institutions/Federal Allows the Department to consider whether a person or entity affili- sible if a person who exercises substantial Government. ated with an institution has overseen the precipitous closure of an- ownership or control over the institution also other institution with the goal of preventing an institution from being exercised substantial ownership or control substantially owned or controlled by persons or entities that would over another institution that closed without a cause the institution to be financially irresponsible and close with- viable teach-out plan or agreement approved out providing to students a plan to finish their education in place or by the institution’s accrediting agency and at another institution. faithfully executed by the institution.

Reg Section 668.175—Alternative Standards and Requirements

Eliminates reference to fax transmission ...... None ...... Change to recognize technological advancements. No impact.

A key change that would result from based programs available to students, group represents a sizeable potential this regulation is greater certainty and even fewer direct assessment market for expansion of competency- among institutions about how to programs. Yet these types of programs based or other distance education implement innovative programs without may be very appealing to adult learners programs. Additionally, students running afoul of title IV disbursement who bring considerable knowledge and outside that age range and those with a requirements. Institutions are not skills to their programs. Expansion of degree may want to pursue competency- inherently opposed to regulations, but subscription-based programs provides based graduate certificates or degrees to instead crave information that will students with the scheduling flexibility enhance their careers. While a variety of enable them to be sure they are they may need if managing factors may explain individual complying with regulations that are responsibilities from school, work, and education attainment, to the extent that otherwise difficult to interpret. The new family. A clearer framework for traditional programs were not suitable definitions ensure a shared administering title IV aid to students understanding of the various kinds of enrolled in competency-based programs for some students’ academic and programs an institution can provide and on a subscription basis may increase employment goals, competency-based the rules for disbursing title IV aid to institutions’ willingness to develop new programs may provide an appealing students enrolled in those programs. programs. To the extent that institutions option. However, evaluating the quality Greater clarity in our regulations will determine that this funding model fits of new programs may be challenging, reduce the likelihood that student and other types of programs, the expansion and it could be difficult to determine taxpayer dollars will be wasted or that of this disbursement model beyond how much a student should learn to be institutions will face undeserved direct assessment programs in these awarded a certain amount of credit, as negative program review findings and final regulations increases the flexibility opposed to more traditional delivery financial liabilities that could have and options for students. Students will models that award aid and mark devastating consequences to the have to evaluate if programs using this progress by the number of hours during institution and its students. model meet their schedule and which a student is scheduled to be in Significant changes in the final educational objectives. class (many institutions do not take regulation from the proposed The regulations eliminate the attendance, and therefore do not regulations include: (1) The expansion financial penalties that students and monitor how much time an individual of the subscription-based disbursement institutions would otherwise face when student actually is in class). As with all model to all programs, not just direct a student progresses quickly through a programs, students would need to assessment; (2) modification of the clock course and completes it early. Students, carefully consider if specific hour definition to include clock hours especially non-traditional students, in which instruction occurs could benefit from the flexible pacing competency-based or distance education asynchronously; (3) clarification that and different model for assessing programs are appropriate for their internships and externships of students progress offered by this type of program. objectives and learning. Distance at foreign institutions can be completed The emphasis on flexibility, workforce learning, subscription-based programs, at entities in the United States that are development, and innovative and other self-paced options require a not eligible institutions; (4) elimination educational approaches could be higher degree of academic discipline on of the prior experience requirement for beneficial to students and the national the part of students, which may pose ineligible entities involved in a written economy. challenges to students who are already agreement; and (5) withdrawal of the According to U.S. Census data,42 for burdened by work and family proposed provisions regarding change of the civilian non-institutionalized responsibilities.43 For those who are so ownership in § 668.15. population, there were approximately motivated, they could complete their 44 million adults between the ages of 25 Students program more quickly. For those who and 49 with high school or some college struggle to stay engaged, innovative Students will benefit from the as their highest educational level in learning models emphasizing coach or expanded program options available 2018. Even a small percentage of that mentor support may improve retention when institutions understand the and completion in online programs ground rules for offering new kinds of 42 U.S. Census Bureau, Table 1. Educational programs and when they do not fear Attainment of the Population 18 Years and Over, by Age, Sex, Race, and Hispanic Origin: 2018. 43 California Community College Chancellor’s surprises at a program review. Despite Available at www.census.gov/data/tables/2018/ Office, 2017 Distance Education Report, 2017, being permitted by the HEA for decades, demo/education-attainment/cps-detailed- http://californiacommunitycolleges.cccco.edu/ there are relatively few competency- tables.html. Last accessed November 29, 2019. Portals/0/Reports/2017-DE-Report-Final-ADA.pdf.

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where students with poor self-directed institution and pricing policies may meetings or lectures. Students can learning skills might otherwise fail.44 45 have been updated since the time of this access lectures and other class activities Another potential benefit for students analysis, but that idea that subscription as their schedules permit, spending as in competency-based programs could be pricing may result in cost savings for much time as is necessary to master a reduced costs to obtain a postsecondary students depending upon the speed of particular task or concept. New credential. Western Governors their progress is still valid.49 technologies permit lectures to be University (WGU), for example, is While more difficult to quantify, the combined with videos and other known for its success in adopting this Department also expects students would resources enabling students to pause at instructional approach, although it still find benefits in programs they can any point to reinforce mastery of subject disburses aid using a time-based model. complete more quickly in terms of matter. Moreover, the availability of In its 2018 annual report, WGU states reduced opportunity costs, which asynchronous learning allows for mixed that the average time to a bachelor’s include wages lost when the student is model learning reflective of non-title IV degree completion among its students is in school rather than in the job for eligible programming with theory 2.5 years, which could generate which the student is preparing. Also, learned asynchronously and specific substantial savings to students and since student retention declines as time practical tasks through synchronous taxpayers. An analysis done by Robert to degree completion expands, programs instruction. Kelchen 46 based on 14 cost structures at that enable students to finish more Adjustments made for COVID–19 13 institutions for credits earned quickly are likely to increase credential conditions have demonstrated to through portfolio or prior learning completion. institutions, accrediting agencies, and assessment found that significant Of course, it could be the unique licensing agencies that at least some savings could be generated, but they attributes of WGU, or the students parts of certain clock-hour programs can vary substantially among colleges. attracted to the institution, that be delivered effectively through Potential savings for 3 credits varied contribute to these results, and it is not asynchronous coursework. While this from $127 to $1,270.47 The fee structure, yet known if the results would be will need to be monitored on an ongoing amount of credits allowed to be replicated by other institutions that basis, this development will benefit obtained through these methods, the adopt the WGU model. A number of students involved in these programs. availability of Federal aid, and the factors, including a given student’s The Department provides additional ability of students to pass those anticipated pace of learning, likelihood detail related to burden estimates in the assessments with limited attempts all of completion, desired employment Paperwork Reduction Act section of this contribute to determining whether a outcomes, personal motivation, and the final rule and none of the burden is competency-based approach would range of options available to them will assigned to students in that analysis. generate savings for a given student. The influence the return the student enjoys Institutions other pricing model, one that is on their educational investment. Institutions should benefit from the supported by the regulations, is Students will also benefit from the regulatory clarifications, especially subscription based pricing in which the changes to the definition of a week of those institutions that seek to expand potential savings relate to the number of instruction. Under the regulations, credits a student completes during a competency-based and direct institutions would be less likely to assessment learning options but are subscription period and student’s assign less substantive work to students eligibility for financial aid in their uncertain as to the Department’s (such as posting a blog or responding to requirements for disbursing aid to specific program. Kelchen calculates the a chat) simply to meet title IV number of credits needed in a students enrolled in those programs. A requirements. Where these activities are significant barrier to entry for subscription period for students who substantive, they will likely continue to receive a full Pell Grant and non-aided institutions seeking to provide direct take place, but in many instances, these assessment programs is a lack of clarity students to break even with traditional activities have been integrated into pricing models at 5 institutions that regarding what the Department expects courses simply to provide evidence of of these programs in order to approve offer a subscription pricing option. ‘‘regular and substantive’’ interaction. These range from 6 credits for a non- them, and the slowness with which the Students who may otherwise be Department has made decisions on aided student to 27 credits for a student successful in distance learning can in a bachelor’s degree program who applications submitted by institutions. become frustrated if they are not Only six institutions, as of 2020, have receives a full Pell Grant.48 The allowed to move at their own pace been approved by the Department to subscription periods and prices vary by because of requirements to post blogs, offer direct assessment programs. This participate in chats, or answer questions indicates that there could be a lack of 44 www.texaspolicy.com/new-study-less- that do not actually enhance learning. expensive-competency-based-education-programs- interest in offering direct assessment just-as-good-as-traditional-programs/. The inclusion of asynchronous programs, or institutions are hesitant to 45 Xu, D. and Xu, Y. March 2019. The Promises coursework that provides for direct invest in their development because and Limits of Online Higher Education: interaction between students and approval requirements are too Understanding How Distance Education Affects instructors in the definition of clock- burdensome or uncertainties too great Access, Cost, and Quality. American Enterprise hours could expand the options for Institute. about what the Department and 46 Robert Kelchen, The Landscape of students in such programs. accreditors require. The regulations will Competency-Based Education—Enrollments, Asynchronous coursework has the reduce burden and provide clarity to Demographics, and Affordability, January 2015. advantage of being able to facilitate an encourage more institutions to Center for Higher Education Reform, American individualized learning experience for Enterprise Institute AEI Series on Competency- experiment with direct assessment Based Higher Education. Available at www.aei.org/ each student in a way that cannot be programs. Under the rule, the wp-content/uploads/2015/04/Competency-based- accomplished through scheduled Department is required to approve the education-landscape-Kelchen-2015.pdf. first direct assessment program offered 47 Id, p. 11, Table 4 Cost Structures of Portfolio 49 Western Governors University, WGU 2018 and Prior Learning Assessment Programs. Annual Report, p. 17. Available at www.wgu.edu/ by an institution at a given credential 48 Id, p.14. Table 5 Costs of Subscription-Based content/dam/western-governors/documents/ level, but after that, only the accreditor CBE Programs Compared to Other Online Providers. annual-report/annual-report-2018.pdf. would be required to review the

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program to ensure academic quality. instructors and students in the requirements of licensing boards by Some institutions may aggressively seek definition of clock hour in these final calculating clock-hour equivalencies. approval for more direct assessment regulations could expand institutions’ Institutions will also benefit from the programs, while others may take a wait- program offerings. In turn, this could options allowed in these final and-see attitude until other institutions increase the number of individuals regulations with respect to have forged new ground. qualified for State licensure or asynchronous coursework in clock-hour In the short term, it is likely that certification, and thus gainful programs and the expansion of institutions already approved to offer at employment, in licensed occupations. subscription-based disbursement least one direct assessment program will There are very few clock-hour programs beyond direct assessment programs. expand offerings since their experience that use distance learning to provide Institutions considering asynchronous well positions them to do so. According portions of the program since there are coursework would have to invest in to the Department’s data, there are only few State or professional licensing systems to monitor active engagement, six institutions that have established boards that permit distance learning for but several such technologies are direct assessment programs. Although clock-hour programs. However, for available. Expanding subscription-based these institutions may expand the clock-hour programs permitted to disbursement could lead to economies number of direct assessment programs incorporate distance learning, it is of scale that make it worthwhile for available, the Department anticipates possible that more students will be institutions to develop such that these programs would mostly served or that more students will persist subscription-based pricing plans. These attract students away from more to completion. changes from the NPRM give traditional distance learning programs, institutions additional options in but may not add significantly to the The regulations more clearly define designing their programs. This could total number of students enrolled in what constitutes a reasonable length for also result in additional competition postsecondary education. Students clock-hour programs and allow from expanded course offerings at other looking for a flexible postsecondary institutions to meet the licensure institutions. program can find many advantages requirements of surrounding States, As discussed further in the Paperwork through distance education already but thus enabling greater student and Reduction Act of 1995 section of this may gravitate to direct assessment workforce mobility. There are only a preamble, the regulations are expected programs because of added advantages, few States that have licensure to result in a net reduction in burden for including in pacing and format. The requirements that are significantly institutions. In estimating costs and Department’s assumptions about longer than other States, but if programs savings associated with these changes in potential student growth related to the in surrounding States increase their burden, we assume that these activities regulations are described in the Net clock hours to meet those requirements, are conducted by postsecondary Budget Impact section of this analysis. there could be small increases in cost administrators, which earn an average However, over time, additional and utilization of title IV, HEA wage of $53.47.52 Throughout, to institutions may develop new direct assistance. On the other hand, if estimate the total costs and savings assessment programs, especially if early programs can be structured to ensure associated with these changes, we adopters create demand among students that students can work if they cross multiply wage rates by two to account for this new form of education. The State lines, there could be cost savings for overhead and benefits. The Department projects that if new since, under the status quo, a student elimination of the Net Present Value institutions engage in direct assessment, who moves from one State to another calculation related to the 90/10 rule is and those already approved to offer may be required to start their program estimated to save ¥2,808 hours, which direct assessment programs launch new over in order to meet the clock-hour would generate cost savings of programs, there could be shifting of requirements since shorter-term approximately $300,000 annually. The students from other programs to self- ‘‘completer programs’’ are not typically regulations also impose burden related paced direct assessment programs. It is approved by those States. Therefore, to reporting subsequent direct also possible that students not this regulation could reduce the cost of assessment programs estimated to interested in current pedagogical education for students who move from impose 18 hours of burden annually for models will find direct assessment one State to the next and could increase a cost of $1,926 using the same hourly programs to be attractive and will worker mobility in fields that employ rate of $53.47 multiplied by two for decide to enroll in a postsecondary large numbers of workers, such as overhead and benefits for a rate of program. This could increase the cosmetology and massage therapy.50 51 $106.94. Together, the estimated net number of students who would qualify Institutions will also benefit from reduction in burden for institutions is for Pell Grants or take Federal Direct simplifications to the formula for clock- ¥2,790 hours and $¥298,363. Loans. While increased interest in direct to-credit hour conversions. The Accrediting Agencies assessment could result in higher title regulations would eliminate the need IV participation, it is possible that for institutions to consider the number The regulations recognize the primary students enrolled in direct assessment of homework hours associated with role that accrediting agencies play in programs would finish their programs each credit hour in programs that are evaluating the quality of new programs more quickly, therefore reducing the subject to the conversion. This change and approving institutions to offer them. amount of financial aid a student uses reduce administrative burden while Although the Department’s review of to complete his or her program. allowing institutions to offer programs direct assessment programs focuses on Changes to the limitations on the in credit hours that are more likely to an institution’s technical ability to ability of clock hour programs to offer transfer to other schools than clock calculate and disburse title IV aid to didactic instruction through distance hours, but still meet the clock-hour students enrolled in these programs, learning may enable more individuals to accreditors have always had—and will enroll in these programs. The inclusion continue to have—the responsibility of 50 www.bls.gov/ooh/personal-care-and-service/ of asynchronous coursework with barbers-hairstylists-and-cosmetologists.htm. ensuring that these programs are sufficient monitoring of participation 51 www.bls.gov/ooh/healthcare/massage- and direct interaction between therapists.htm. 52 www.bls.gov/oes/current/oes119033.htm.

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rigorous and of high quality. In the Secretary’s approval of direct we note that its three-year cohort default conjunction with the recently published assessment programs at the same rates of 4.6 percent for 2014, 4.1 percent Accreditation and State Authorization academic level to the first such program for 2015, and 4.2 percent for 2016 53 are Regulations, one or more existing or at an institution, both provisions below the national average of 10.1 new accrediting agencies may step designed to support the expansion of percent overall in 2016 (6.6 percent for forward to become a leader in the field innovative educational programs. private, 9.6 percent for public, and 15.2 for assessing and approving direct percent for proprietary institutions).54 Net Budget Impact assessment programs, which could lead Comparatively, Capella University, to more rapid expansion of direct We estimate that these regulations another leader in competency-based assessment programs. Accrediting will have a net Federal budget impact education, had a cohort default rate of agencies will continue to play an for Federal student loan cohorts 6.5 percent in 2015 and 6.8 percent in important role in approving written between 2020–2029, of $[¥54] million 2016.55 Factors that could lead to lower arrangements covering between 25 and in outlays in the primary estimate defaults among institutions employing 50 percent of a program; however, scenario and an increase in Pell Grant innovative learning models—and in changes already published in the outlays of $1,163 million over 10 years, particular when those models are used accreditation regulations to allow these for a total net impact of $1,109 million. to provide graduate education—may be approvals to take place at the staff level, A cohort reflects all loans originated in that they would attract older students and requirements for accrediting a given fiscal year. Consistent with the who are employed and are seeking agencies to approve or deny them requirements of the Credit Reform Act specific credentials for advancement or within 90 days, could encourage more of 1990, budget cost estimates for the a career change. These individuals may institutions to consider entering into student loan programs reflect the be more likely to have resources written arrangements. estimated net present value of all future (including those provided by current Accrediting agencies play an non-administrative Federal costs employers) to reduce the need to borrow important role in evaluating the quality associated with a cohort of loans. The and to repay any loans they need to of academic programs, including Net Budget Impact is compared to a take. On the other hand, the non- distance education programs, and will modified version of the 2020 President’s traditional students that may be the continue to play that role. These Budget baseline (PB2021) that adjusts primary market for competency-based regulations do not create new for the publication of the final Borrower learning or direct assessment may have responsibilities in this regard; however, Defense, Gainful Employment, and employment and family obligations that until accrediting agencies have more Accreditation and State Authorization could make them less likely to complete experience in reviewing and approving rules. their programs, potentially increasing competency-based and direct The Department emphasizes that its their default risk. assessment programs, the approval estimates of transformations in higher An additional complicating factor in process could be somewhat more education delivery that could occur as developing these estimates are the burdensome. Some agencies may also a result of these regulations are related regulatory changes on which the need to develop new standards to uncertain. Similarly, the Department is committee reached consensus in this facilitate the evaluation of these constrained in its budget estimates by negotiated rulemaking that we programs, but many already have such the limited data available to it. We addressed in separate notices of standards in place. If growth in estimate how institutions and students rulemaking. The budget impacts competency-based programs is more would respond to the regulatory estimated here are in addition to the significant than anticipated, there could changes, and we present alternative potential increases attributed to the be an increase in accrediting agency scenarios to capture the potential range accreditation changes promulgated in workload, but it is possible that demand of impacts on Federal student aid the final rule published November 1, for approval of traditional programs transfers. Similarly, we do not attempt 2019 that are reflected in the PB 2021 would decline as interest shifts to to estimate effects based on evidence baseline.56 competency-based or direct assessment cited in this preamble that students The main budget impacts estimated programs. enrolled in similar programs have from these final regulations come from The Department provides additional persisted longer, completed at higher changes in loan volumes and Pell Grants detail related to burden estimates in the rates, and finished in a shorter period of disbursed to students if these new Paperwork Reduction Act section of this time with less debt. While increased delivery models were to attract an final rule and does not estimate any enrollment and persistence could result increased number of students who additional burden to accrediting in increased transfers to students in the receive title IV, HEA funds. The agencies from the regulations. form of Federal student aid grants and Department believes that much of the loans, it could also produce graduates Federal Government growth in this area will come from better prepared to succeed in the future students that shift from more In the regulations, the Federal workplace and encourage robust traditional ground-based or distance Government is reducing some of the economic growth. The Administration’s complexity of administering Federal emphasis on workforce development 53 U.S. Department of Education, Official Cohort student aid and calculating return-to- may encourage more institutions to Default Rates for Schools, PEPS300.xls available at title IV obligations. These regulations implement competency-based www2.ed.gov/offices/OSFAP/defaultmanagement/ also reaffirm that it is accreditors—and educational programs, which could cdr.html. 54 U.S. Department of Education, Comparison of not the Department—who are improve employment outcomes and FY 2016 Official National Cohort Default Rates to authorized by the HEA to establish and loan repayment performance. Prior Two Official Cohort Default Rates available at evaluate compliance with education There is anecdotal evidence that www2.ed.gov/offices/OSFAP/defaultmanagement/ quality standards, including when competency-based education programs schooltyperates.pdf. Accessed February 21, 2020. innovative delivery models challenge may have strong loan repayment 55 U.S. Department of Education, Official Cohort Default Rates for Schools, PEPS300.xls available at the status quo. The regulations require performance. Looking again to WGU, an www2.ed.gov/offices/OSFAP/defaultmanagement/ the Secretary to provide a timely review institution that has been an early cdr.html. of new program applications and limit adopter of competency-based learning, 56 84 FR 58834.

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learning programs to those offered using subscription-based programs, provisions distance learning, nor did we attribute competency-based learning or direct in these regulations that would to the regulation the possibility that assessment methods. In developing the encourage innovation, the growth of some students may prefer that distance primary estimate, the Department does workforce development programs, and programs or alternative types of not estimate the types of programs and the new methods of delivery may programs like CBE after their experience institutions students who choose particularly appeal to non-traditional during the COVID–19 shutdown. competency-based education may come students. Tables 4.A to 4.E illustrate the Additionally, any COVID–19 related from or the potential cost differential changes in title IV grant and loan economic downturn will be reflected in between those programs, as further volume developed for use in estimating future baseline updates, with the discussed after Table 5. Instead, we the net budget impact of these potential increase in enrollment and assume that the growth associated with regulations for the primary scenario, related financial aid as a reaction to programs that are developed or with discussion about underlying economic conditions and not driven by expanded in part because the assumptions following the tables. the changes in these final regulations. In order to have a common basis for regulations make it easier to administer However, we did recognize that title IV aid to such programs comes from the Pell Grant and loan assumptions and institutions’ experience in shifting students who would not otherwise have to facilitate comment, we started the programs to distance platforms may borrowed to attend a different type of estimate with an assumption about the encourage them to accelerate the program and apply an average level of number of additional programs that borrowing to each estimated enrollee. would be established because of the development of distance of CBE The Department believes that many of combined effect of the regulations. As programs. Students may also decide that the students who enroll in CBE will do noted in response to the comment about distance learning is a good approach for so as a substitute for a different type of the RIA in the NPRM, the expansion of them and consider it for furthering their program for which they likely would distance education in response to education or for future programs. This is receive some form of title IV aid, but COVID–19 disruptions is not a response reflected in an increase in programs in there will be some small increase in to these regulations, and the extent to Table 4.A to 968 compared to 864 in the enrollment from students who either not which the transformation will persist is NPRM, leading to an estimated 60,379 have pursued postsecondary education unknown. Instead, the response to additional Pell Grant recipients. On the or who would not have received title IV COVID–19 has provided evidence that other hand, because the rapid shift to aid for their program. Additionally, the additional flexibilities are necessary and distance may provide students with sub- alternate budget scenarios consider the appropriate to enable institutions to optimal experiences, there could also be possibility that the implementation of adapt to the changing needs of students a negative backlash in which students new pedagogical and delivery models and society. will resist engaging in distance learning could result in more or fewer new We did not increase the estimated if their experience during the COVID–19 students being interested in pursuing a number of students to reflect the current necessitated transition was less than postsecondary credential. Expansion of shift of campus-based students to satisfactory.

TABLE 4.A—ASSUMPTIONS ABOUT CUMULATIVE NUMBER OF ADDITIONAL PROGRAMS BY SIZE OF PROGRAM

Size of program 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

25 ...... 24 72 95 150 225 275 325 375 420 450 75 ...... 12 20 40 60 90 110 135 150 175 200 150 ...... 10 18 26 40 68 75 90 113 120 128 350 ...... 8 15 25 30 38 50 60 70 80 90 750 ...... 3 8 14 20 30 38 48 56 65 70 1500 ...... 1 4 7 10 14 18 20 25 28 30

As seen in Table 4.A, we expect the acknowledge that the results of that limited due to the high cost of current trends of distance education survey may be biased in that we expect constructing facilities, procuring programs capturing an increasing share the small proportion of institutions equipment and hiring faculty qualified of students to continue, and perhaps to interested in starting CBE or direct to teach in those programs.58 As more accelerate as institutions and accreditors assessment programs were more likely hospitals and health care facilities become more experienced in to respond. Nonetheless, these are the require nurses to have bachelor’s establishing or evaluating these best data available to us, and we degrees, we expect to see continued programs. We also expect more projected the results of that survey onto growth of RN to BSN programs, which institutions to engage in competency- the postsecondary system as a whole. can be delivered using CBE or direct based learning and direct assessment, We assumed, based on the 2018 and assessment because students in these which may or may not be delivered 2019 survey data, that the majority of programs are typically required to be online. The initial distribution of programs will be small, but assumed working in the field, thus negating the that over time larger programs would programs by enrollment size uses need for the institution to provide evolve. information from the 2018 AIR survey clinical placements. and the 2019 survey; 57 however, we In addition, as institutions become more comfortable with using written 58 Shulock, N., Lewis, J., & Tan, C. (2013). 57 American Institutes for Research, State of the agreements to access facilities and Workforce Investments: State Strategies to Preserve Field—Findings from the 2019 National Survey of experts that private sector organizations Postsecondary Competency-Based Education, Higher-Cost Career Education Programs in available at www.air.org/sites/default/files/ and unions make available, there could Community and Technical Colleges. California National-Survey-of-Postsecondary-CBE-Lumina- be growth in career and technical State University: Sacramento. Institute for Higher October-2019-rev.pdf. education programs that are currently Education Leadership & Policy.

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Other factors that support the increase level could also accelerate the process of the 588 programs described in the 2019 in programs are recent regulatory establishing programs. survey, 16 percent were graduate developments with respect to We then had to develop an programs. However, competency-based accreditation and no requirement for assumption for how many of the programs could be a good fit for working approval of new delivery methods as a additional programs would be adults wanting a self-paced program to substantive change. The provisions undergraduate or graduate programs for earn a graduate credential, so we requiring the Secretary to provide a the purposes of determining how many assumed that that the distribution of timely review of new program would potentially serve Pell recipients undergraduate versus graduate programs applications and to limit the Secretary’s and subsidized loan borrowers. Of the would change over time, especially 512 programs described in the 2018 review to the first competency-based among smaller programs, as shown in survey, approximately 17 percent were education program at a given academic Table 4.B. identified as graduate programs and of

TABLE 4.B—UNDERGRADUATE SHARE OF CUMULATIVE ADDITIONAL PROGRAMS

2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Size of program (%) (%) (%) (%) (%) (%) (%) (%) (%) (%)

25 ...... 83 78 70 65 60 55 50 50 45 45 75 ...... 83 78 70 65 60 60 60 60 60 60 150 ...... 83 78 70 65 60 60 60 60 60 60 350 ...... 83 80 75 75 75 70 70 70 70 70 750 ...... 83 80 80 80 75 75 75 75 75 75 1,500 ...... 83 83 80 80 78 78 75 75 75 75

This resulted in an assumed number graduate students who may receive Pell of additional undergraduate and Grants or take loans.

TABLE 4.C—NUMBER OF ADDITIONAL UNDERGRADUATE STUDENTS

Size of program 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

25 ...... 498 1,404 1,663 2,438 3,375 3,781 4,063 4,688 4,725 5,063 75 ...... 747 1,170 2,100 2,925 4,050 4,950 6,075 6,750 7,875 9,000 150 ...... 1,245 2,106 2,730 3,900 6,075 6,750 8,100 10,125 10,800 11,520 350 ...... 2,324 4,200 6,563 7,875 9,975 12,250 14,700 17,150 19,600 22,050 750 ...... 1,743 4,800 8,400 12,000 16,875 21,375 27,000 31,500 36,563 39,375 1,500 ...... 1,245 4,980 8,400 12,000 16,380 21,060 22,500 28,125 31,500 33,750

Total ...... 7,802 18,660 29,855 41,138 56,730 70,166 82,438 98,338 111,063 120,758

TABLE 4.D—NUMBER OF ADDITIONAL GRADUATE STUDENTS

Size of program 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

25 ...... 100 400 710 1,310 2,250 3,090 4,060 4,690 5,780 6,190 75 ...... 150 330 900 1,580 2,700 3,300 4,050 4,500 5,250 6,000 150 ...... 260 590 1,170 2,100 4,050 4,500 5,400 6,750 7,200 7,680 350 ...... 480 1,050 2,190 2,630 3,330 5,250 6,300 7,350 8,400 9,450 750 ...... 360 1,200 2,100 3,000 5,630 7,130 9,000 10,500 12,190 13,130 1,500 ...... 260 1,020 2,100 3,000 4,620 5,940 7,500 9,380 10,500 11,250

Total ...... 1,610 4,590 9,170 13,620 22,580 29,210 36,310 43,170 49,320 53,700

The next assumption involved the for competency-based programs is to independent applicants without percent of those additional students expand opportunities for non-traditional dependents had family incomes under who would receive Pell Grants and students, who typically qualify for Pell $25,000. If programs attract more would take out different types of loans. grants at higher rates; in the 2018–19 students from lower income brackets, For existing programs, the percent of award year 54% of dependent Pell Grant costs will increase. On the undergraduates with Pell Grants is applicants had a Pell eligible expected other hand, CBE and distance learning approximately 39 percent overall,59 but family contribution (EFC), while 85% of programs, including direct assessment this varies significantly by institution independent applicants met that programs, may be more attractive to and program type. One motivating factor threshold. However, independent working adults, who may be less likely applicants are often ineligible for Pell at to qualify for Pell grants given their relatively moderate incomes—in AY earnings. Evidence is mixed from 59 U.S. Department of Education, The FY 2021 Justification of Appropriations Estimates to 2018–19 88 percent of the eligible existing programs, both because the data Congress Vol. II: Student Financial Assistance, p. p- independent applicants with does not always distinguish students in 11. Available at www2.ed.gov/about/overview/ dependents had family incomes under CBE programs from those in traditional budget/budget21/justifications/p-sfa.pdf. $50,000 and 96 percent of the eligible programs at the institution and the

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percentage of students receiving Pell some CBE programs was 30 percent for percent for Southern New Hampshire Grants does vary among institutions Western Governor’s University, 33 University. Nonetheless, we assumed with at least some CBE programs. In percent for Sinclair Community College, that the percentage of students who may 2017–18 IPEDS student financial 35 percent for Northern Arizona be eligible for Pell Grants increases to 50 assistance data, the percent of University, 43 percent for Capella percent, resulting in the estimated undergraduates receiving a Pell Grant at University, 45 percent for the University number of additional Pell recipients some institutions known for at least of Wisconsin Flex program, and 47 shown in Table 4.E.

TABLE 4.E—ESTIMATED ADDITIONAL PELL RECIPIENTS

Size of program 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

25 ...... 249 702 831 1,219 1,688 1,891 2,031 2,344 2,363 2,531 75 ...... 374 585 1,050 1,463 2,025 2,475 3,038 3,375 3,938 4,500 150 ...... 623 1,053 1,365 1,950 3,038 3,375 4,050 5,063 5,400 5,760 350 ...... 1,162 2,100 3,281 3,938 4,988 6,125 7,350 8,575 9,800 11,025 750 ...... 872 2,400 4,200 6,000 8,438 10,688 13,500 15,750 18,281 19,688 1,500 ...... 623 2,490 4,200 6,000 8,190 10,530 11,250 14,063 15,750 16,875

Total ...... 3,901 9,330 14,928 20,569 28,365 35,083 41,219 49,169 55,531 60,379

We also assumed a distribution of Pell We recognize that competency-based otherwise occur. The additional 60,379 recipients based on expected growth in and direct assessment programs, in recipients estimated for 2030 would programs by type and control of particular, are a relatively new and account for under 1 percent of all institutions, as shown in Table 4.F. developing part of the postsecondary estimated 8.25 million Pell recipients in However, the share of programs market and it is not clear what 2030–31 and result in an increase in reflected in Table 4.F does not institutions will pursue opportunities in program costs of approximately $1,397 necessarily reflect the share of students this area or how the size and scope of million, a 0.4 percent increase in at each type of institution. programs offered will develop. estimated 10-year Pell Grant program Estimated program costs for Pell Grants costs of $329.0 billion. TABLE 4.F—ASSUMED DISTRIBUTION range from $30.1 billion in AY 2021–22 OF NEW PROGRAMS BY INSTITU- For the loan programs, we used the to $36.1 billion in AY 2030–31, with a estimated split between graduate and TIONAL CATEGORY 10-year total estimate of $329.0 billion. undergraduate programs to develop On average, the FY 2021 President’s additional volume estimates by loan Share of Budget projects a baseline increase in programs type and student loan model risk-group. Pell Grant recipients from 2021 to 2030 (%) Table 4.G presents the assumed of approximately 150,000 annually. The borrowing rate by loan type of the 4-year public ...... 22 increase in Pell Grant recipients additional students. 2-year public ...... 30 estimated due to these regulations 4-year private ...... 15 ranges from about 6 percent in 2022 to 2-year private ...... 8 Proprietary ...... 25 approximately 41 percent by 2030 of the projected annual increase that would

TABLE 4.G—ESTIMATED BORROWING RATES BY LOAN TYPE

2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 (%) (%) (%) (%) (%) (%) (%) (%) (%) (%)

Subsidized ...... 45 45 45 45 45 45 45 45 45 45 Unsubsidized ...... 55 55 55 55 55 55 55 55 55 55 Parent PLUS...... 10 10 10 10 10 10 10 10 10 10 Grad Unsubsidized... 35 35 35 35 35 35 35 35 35 35 Grad PLUS...... 25 25 25 25 25 25 25 25 25 25

We then used estimated average loans volume by loan type, as shown in by loan type as projected for the PB2021 Tables 4.H and 4.I. estimates to estimate a total increase in

TABLE 4.H—ESTIMATED AVERAGE AMOUNTS PER BORROWER BY LOAN TYPE

Average loan 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Subsidized ...... 4,240 4,240 4,240 4,250 4,250 4,260 4,260 4,270 4,280 4,290 Unsubsidized ...... 4,630 4,660 4,700 4,720 4,760 4,780 4,820 4,830 4,860 4,880 PLUS ...... 18,550 18,880 19,290 19,620 19,920 20,440 20,780 21,070 21,460 21,860 Grad Unsubsidized... 20,660 20,910 21,120 21,230 21,330 21,590 21,810 22,080 22,290 22,500 Grad PLUS...... 25,990 26,760 27,510 28,130 28,640 29,330 30,100 30,870 31,760 32,660

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TABLE 4.I—ESTIMATED ADDITIONAL LOAN VOLUME BY LOAN TYPE

Additional loan volume 2021 2022 2023 2024 2025

Subsidized ...... 14,886,216 35,603,280 56,963,340 78,675,469 108,496,125 Unsubsidized ...... 19,867,793 47,825,580 77,175,175 106,792,950 148,519,140 Parent PLUS...... 14,472,710 35,230,080 57,590,295 80,711,775 113,006,160 Grad Unsubsidized ...... 11,641,910 33,591,915 67,784,640 101,203,410 168,570,990 Grad PLUS ...... 10,460,975 30,707,100 63,066,675 95,782,650 161,672,800

Additional loan volume 2026 2027 2028 2029 2030

Subsidized ...... 134,508,701 158,032,688 188,955,506 213,906,375 233,122,354 Unsubsidized ...... 184,467,071 218,541,813 261,233,569 296,870,063 324,113,130 Parent PLUS...... 143,419,815 171,305,125 207,197,113 238,340,125 263,975,895 Grad Unsubsidized...... 220,725,365 277,172,385 333,617,760 384,769,980 422,887,500 Grad PLUS...... 214,182,325 273,232,750 333,164,475 391,600,800 438,460,500

Clearly, the large average borrowing the alternate scenarios to identify a group, but reduces the share in the 4- amounts of graduate students contribute range of possible impacts. year Junior/Senior risk group by 10–15 significantly to the loan volume As subsidy rates differ by risk group percentage points and the 4-year estimates, so a different mix of programs and loan type, the Department assumed Freshman/Sophomore risk group by or a different borrowing level would a distribution of the undergraduate approximately 5 percentage points and affect the estimated impact of the loans as shown in Table 4.J. This increases the share in the 2-year risk regulations, so we adjust this factor in distribution is based on the PB2021 groups. All graduate loans are in the distribution of loan volume by risk graduate risk group.

TABLE 4.J—ASSUMED DISTRIBUTION OF ADDITIONAL LOAN VOLUMES BY RISK GROUP

Subsidized Unsubsidized Parent PLUS (%) (%) (%)

2-year Proprietary ...... 18 15 10 2-year Not-for-Profit ...... 20 15 10 4-year Freshman/Sophomore ...... 32 35 42 4-year Junior/Senior ...... 30 35 38

The resulting additional loan volumes Given the higher loan amounts default performance that is as good as or are generated by simple multiplication associated with PLUS loans and loans to better than national averages, but it is of the estimated additional graduate students, the negative subsidy not clear that most programs that will be undergraduate students by the percent rates that range from –20.57 in 2021 to created in the future will achieve that borrowing and average amount per –16.60 in 2028 generate significant result. Depending on how programs are borrower by loan type, and then by the savings ($¥427 mn in outlays) to offset configured, the market demand for distribution by risk group. The same the increased costs in other loan types. them, and their quality, key subsidy process occurred for graduate students. In Alternate 2, the higher non- components such as defaults, As seen from the approximately $100 consolidated loan volume eventually prepayments, and repayment plan billion total annual loan volume, even results in higher consolidated loan choice may vary and affect the cost small changes would result in a volume, that, combined with the other estimates. significant amount of additional loan positive subsidy categories results in a transfers. We update loan volume net cost in that scenario. Table 5 summarizes the Pell and loan estimates regularly; for PB2021 the total We do not assume any changes in effects for the Main, Alt1, and Alt2 non-consolidated loan volume estimates subsidy rates from the potential creation scenarios over a 10-year period. Each between FY2021 and FY2030 range of new programs or the other changes column reflects a scenario showing from $94 billion to $107 billion. The reflected in the regulations. We are estimated changes to Pell Grants and assumed changes in loan volume would uncertain to what extent and in what Direct Loans under those conditions. result in a small savings that represents direction the performance of programs Therefore, the overall amounts reflect the net impact of offsetting subsidy that expand or develop under the the sum of outlay changes occurring changes by loan type and risk group due regulations will shift relative to current under each scenario for Pell Grants and to positive subsidy rates for Subsidized programs. As indicated previously, Direct Loans when combined. and Unsubsidized Stafford loans and several institutions known for negative subsidy rates for PLUS Loans. competency-based programs have

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TABLE 5—ESTIMATED NET IMPACT OF PELL GRANT AND LOAN CHANGES— 2021–2030 OUTLAYS [$mns]

Main Alt 1 Alt 2

Pell Grants ...... 1,163 465 1,804 Loans ...... ¥54 ¥26 107

Overall ...... 1,109 439 1,911

The cost estimates presented above do because of limited information on the strategic plans in a ‘‘minor way’’ and 16 not attempt to account for several potential significance include the percent in a ‘‘major way’’.60 It is also factors that could ultimately result in a treatment of out-of-class hours and the unclear if the size and type of existing different net budget impact than the reasonable length provisions related to CBE programs is representative of future primary estimate presented in Table 5, clock hour programs. CBE programs, especially direct including potential cost differences As discussed previously, the assessment programs. among programs and relative repayment uncertainty around several factors In order to capture the effect of performance. As discussed previously, affected by the changes led the changing some of the key assumptions one potential benefit of competency Department to develop some alternative associated with the primary budget based programs is reduced costs for scenarios for the potential impacts. The estimate, the Department developed the students relative to other programs. If a extent to which institutions invest in Alternate Scenarios presented in Table large share of students would have making direct assessment programs 6. Alternate 1 is a low impact scenario attended a different program or work and try to enroll additional that reduces the number of additional completed faster, their Pell Grant or students as opposed to converting some programs and students and lowers the borrowing may be lower than assumed portion of existing enrollments to this average amount borrowed and the in the PB2021 baseline. However, type of program is unclear. In the AIR percentage of students eligible for Pell without more significant evidence, we survey about competency-based Grants. Alternate 2, the high impact are not estimating any savings from that education, approximately 40 percent of scenario, increases programs and possibility. Other provisions that we do the 501 institutional respondents student growth, the percentage of Pell not include in the budget estimate indicated CBE is in their institutions’ recipients, and amounts borrowed.

TABLE 6—ALTERNATE SCENARIOS

Alternate 1—low impact Alternate 2—high impact

Program Growth ...... Eliminate half the programs per cell for 3 + 20 programs per cell for 3 smallest cat- smallest categories and one-third of pro- egories; +5 programs per cell for 3 largest grams in 3 largest size categories. size categories through 2025 and +10 per cell for 2026 to 2029. Undergraduate Program Share ...... +15 percent ...... ¥15 percent. Percent of Pell Recipients ...... 30 percent ...... 75 percent. Distribution of Pell Recipients by Institutional 4-yr Public 10% ...... 4-yr Public 30%. Category. 4-yr Private 5% ...... 4-yr Private 24%. 2-yr Public 38% ...... 2-yr Public 20%. 2-yr Private 10% ...... 2-yr Private 5%. Proprietary 37% ...... Proprietary 21%. Borrowing Rates ...... Subsidized ¥10% ...... Subsidized +5%. Unsubsidized ¥15% ...... Unsubsidized +10%. Plus ¥5% ...... Plus +5%. Grad Unsub ¥15% ...... Grad Unsub +10%. Grad Plus ¥15% ...... Grad Plus +10%. Average Loan Amount ...... Decrease 20 percent ...... Increase 10 percent. Distribution by Risk Group (Subsidized and Un- 2-yr Prop ¥10% ...... 2-yr Prop +15%. subsidized). 2-yr NFP ¥5% ...... 2-yr NFP +10%. 4-yr FRSO +10% ...... 4-yr FRSO ¥15%. 4-yr JRSR +5% ...... 4-yr JRSR ¥10%. GRAD No change ...... GRAD No change. Distribution by Risk Group (PLUS) ...... 2-yr Prop ¥6% ...... 2-yr Prop +12%. 2-yr NFP ¥3% ...... 2-yr NFP +8%. 4-yr FRSO +6% ...... 4-yr FRSO ¥12%. 4-yr JRSR +3% ...... 4-yr JRSR ¥8%. GRAD No change ...... GRAD No change.

60 www.air.org/sites/default/files/National- Survey-of-Postsec-CBE-2018-AIR-Eduventures-Jan- 2019.pdf.

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Accounting Statement have prepared an accounting statement transfers as a result of these final showing the classification of the regulations. Expenditures are classified As required by OMB Circular A–4 expenditures associated with the as transfers from the Federal (available at www.whitehouse.gov/sites/ provisions of these final regulations. Government to affected student loan default/files/omb/assets/omb/circulars/ This table provides our best estimate of borrowers and Pell Grant recipients. a004/a-4.pdf), in the following table we the changes in annual monetized

TABLE 7—ACCOUNTING STATEMENT: CLASSIFICATION OF ESTIMATED EXPENDITURES [in millions]

Category Benefits

Clarification of terms and processes related to establishing programs and administering title IV aid to encour- age development of new programs ...... Not Quantified

Net Reduction in Paperwork Burden on Institutions, primarily due to elimination of Net Present Value calcula- tion related to the 90/10 rule ...... 7% 3%

$¥0.30 $¥0.30

Not Quantified

Category Costs

Category Transfers

Increased transfers of Pell Grants ...... 7% 3% $101.2 $109.6 Increased transfers of loans to students in additional programs established, in part, due to the regulations ...... $¥6.9 $¥6.1

Alternatives Considered negotiated rulemaking committee alternatives that were considered are Several proposals were considered on moved toward consensus. Some key summarized in Table 76. various sections of the regulations as the

TABLE 8—KEY ALTERNATIVES CONSIDERED

Topic Alternative proposal Reasons rejected

Definition of Credit Hour ...... Eliminate time-based requirements ...... Retain definition for some consistency across higher education. Subscription-based pro- Disbursement based on attempted programs, not com- Concern for potential abuse leading to paying title IV grams. pleted ones. aid for same course twice. Include a competency in student’s enrollment status more than once if it overlapped more than one sub- scription period. Written Arrangement ...... No limitation on percentage of program that could be Goal was to facilitate partnerships with organizations provided by written arrangement with ineligible entity. using trade experts in workplace environment. Com- mittee found sufficient flexibility with existing limit and changes would call into question whether the eligible institution was really offering the program. Program Length ...... Allow limiting program length to 100 percent of the re- Concern that changes would encourage institutions to quirements in any State and then 100 percent re- add hours beyond what is necessary for student to quired for licensure in an adjoining State. become employed.

Regulatory Flexibility Act Analysis technology and those that are based on educational innovations such as These final regulations are expected the demonstration of competencies subscription-based and direct to have a significant impact on rather than seat time, to help assessment programs as well as new institutions, many of which are institutions understand regulatory technology-driven delivery considered to be small entities. The requirements for such programs and to mechanisms, such as adaptive learning. analysis presented below evaluates the facilitate further innovations in such The regulations also seek to clarify impact of the final regulations on these areas. The regulations provide or clarify definitions used to differentiate between small entities. definitions of terms such as distance education and correspondence correspondence course, distance courses, while at the same time Description of the Reasons That Action education, subscription-based program, preserving student protections and title by the Agency Is Being Considered and clock hour, where the HEA IV financial aid distribution. The Department is regulating to provides no definition. reflect the development in The regulations send a signal to the postsecondary education delivery higher education community that the models, including those facilitated by Department is committed to supporting

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Succinct Statement of the Objectives of, flexibility to ensure that future Description of and, Where Feasible, an and Legal Basis for, the Regulations innovations we cannot yet anticipate Estimate of the Number of Small have an opportunity to move forward. Entities to Which the Regulations Will These final regulations amend the The regulations are also designed to Apply Institutional Eligibility regulations protect students and taxpayers from issued under the HEA, related to unreasonable risks. Inadequate Of the entities that the final distance education and innovation in 34 consumer information could result in regulations will affect, we consider CFR part 600. In addition, these students enrolling in programs that will many institutions to be small. The regulations amend the Student not help them meet their goals. In Department recently proposed a size Assistance General Provisions addition, institutions adopting classification based on enrollment using regulations issued under the HEA in 34 innovative methods of educating IPEDS data that established the CFR parts 602 and 668. The changes to students may expend taxpayer funds in percentage of institutions in various part 600 are authorized by 20 U.S.C. ways that were not contemplated by sectors considered to be small entities, 1001, 1002, 1003, 1088, 1091, 1094, Congress or the Department, resulting in 1099b, and 1099c. The change to part as shown in Table 8. We described this greater risk to the taxpayers of waste, size classification in the NPRM 602, removing the definition of fraud, and abuse and to the institution published in the Federal Register on ‘‘Distance education’’ (now defined in of undeserved negative program review July 31, 2018 for the borrower defense part 600), is authorized by 20 U.S.C. findings. These regulations attempt to 1099b while the changes to part 668 are limit risks to students and taxpayers rule (83 FR 37242, 37302). The authorized by 20 U.S.C. 1001–1003, resulting from innovation by delegating Department discussed the proposed 1070a, 1070g, 1085, 1087b, 1087d, various oversight functions to the bodies standard with the Chief Counsel for 1087e, 1088, 1091, 1092, 1094, 1099c, best suited to conduct that oversight— Advocacy of the Small Business 1099c–1, 1221e–3, and 3474. States and accreditors. This delegation Administration, and while no change Through the final regulations, we of authority through the higher has been finalized, the Department attempt to remove barriers that education regulatory triad entrusts continues to believe this approach most institutions face when trying to create oversight of most consumer protections accurately reflects a common basis for and implement new and innovative to States, assurance of academic quality determining size categories that is ways of providing education to to accrediting agencies, and protection linked to the provision of educational students, and also provide sufficient of taxpayer funds to the Department. services.

TABLE 9 61—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

The regulations would provide that require sophisticated technology, distance learning and competency-based needed clarity around title IV eligibility may be impractical for small institutions education available to their students. for distance education, correspondence that cannot distribute the cost among a The regulations would remove many courses, subscription-based programs, population of enough size to result in barriers to innovation that currently and direct assessment programs. They favorable return-on-investment. We restrain institutions, including small would also provide greater clarity expect that the development of the first ones, and may accelerate innovations, regarding how the Department direct assessment program at an but these innovations were likely to take determines whether a program is of institution would be a multi-stage and place in postsecondary education reasonable length. The effect on small multi-year process involving choosing anyway given the call for new, more entities would vary by the extent they the subject areas appropriate for this efficient delivery models for the currently participate in such programs model, developing competencies, growing population of non-traditional or that they choose to do so going modifying course materials and teaching students and the likelihood that adults forward. Introducing competency-based approaches, reaching out to potential will be engaged in postsecondary programs in areas with strong demand future employers to build acceptance of education throughout their lifetime. could be an opportunity for some small the credential, and getting approval entities to maintain or expand their from accreditors and the Department, business. On the other hand, small and recruiting students. The Department entities could be vulnerable to does not have a detailed understanding competition from other institutions, of the costs and timeframe involved large or small, that are capturing an with establishing these programs, increasing share of the postsecondary especially for small entities and we market with distance or competency- welcome such information. Small based programs. Developing and institutions may be more inclined to implementing new programs and rely on consortia arrangements with 61 U.S. Department of Education analysis of IPEDs delivery models, and especially those other, larger institutions, to make 2015–16 enrollment data.

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Description of the Projected Reporting, Identification, to the Extent Practicable, information collection instrument Recordkeeping, and Other Compliance of All Relevant Federal Regulations displays a currently valid OMB control Requirements of the Regulations, That May Duplicate, Overlap, or number. Including an Estimate of the Classes of Conflict With the Regulations Notwithstanding any other provision Small Entities That Will Be Subject to The regulations are unlikely to of law, no person is required to comply the Requirement and the Type of conflict with or duplicate existing with, or is subject to penalty for failure Professional Skills Necessary for Federal regulations. Preparation of the Report or Record to comply with, a collection of Alternatives Considered information if the collection instrument The Department provides additional does not display a currently valid OMB As described above, the Department detail related to burden estimates in the control number. Paperwork Reduction Act section of this participated in negotiated rulemaking final rule. Overall, the Department when developing the regulations and Section 600.21—Updating Application estimates $300,288 in reduced considered several options for some of Information paperwork burden associated with the the provisions. These included: (1) elimination of the net present value Eliminating time-based requirements for Requirements: The regulations in calculation related to the 90/10 rule. credit hours; (2) no limitation on the § 600.21 require the institution to only This affects proprietary institutions, of percentage of a program that could be report the addition of a second or which approximately 85 percent are offered through written arrangement subsequent direct assessment program considered small according to Table 8 with an ineligible entity; (3) allowing without the review and approval of the (2,572/3,021), so most of that burden limiting program length to 100 percent Department when it previously has such reduction ($300,288*85 percent = of the requirements in any State and approval. The regulations also require $255,245) will be enjoyed by small then 100 percent required for licensure an institution to report the entities. The Department is unable to in an adjoining State, (4) disbursing establishment of a written arrangement estimate the effect of this change on the funds in subscription-based programs between the eligible institution and an profits of institutions, including those based on attempted competencies, not ineligible institution or organization in considered to be small entities. No completed ones; and (5) including a which the ineligible institution or mechanism exists to track profits at competency that overlaps subscription organization will provide more than 25 periods in a student’s enrollment status institutions. The only way to obtain data percent of a program. We also intend to on profits would be through a manual more than once. In proposing to remove request that institutions report review of financial statements submitted limits on the portion of a program that additional information related to the use by each institution. Even with that may be offered through a written information, the effect of this change on arrangement with an ineligible entity, of asynchronous distance education in profits could not be estimated with any the Department sought to make a wider clock hour programs and would degree of accuracy. First, it would be range of occupationally-related incorporate this change in the necessary to determine which schools educational resources available to Department’s system for reporting used (NPV), which was optional per our students than could be reasonably information related to the eligibility of regulations. Second, it would have to be provided by the institutions they attend. academic programs. We would meet all known, for the period that an institution It was the Department’s belief that this applicable Paperwork Reduction Act of used NPV, what revenue from change would particularly benefit 1995 (44 U.S.C. 3501–3520) institutional loans would have been had smaller institutions whose resources are requirements before collecting this that revenue included only loan typically more limited than those of information. payments received by the institution larger entities. Burden Calculation: We believe that during the fiscal year. Also, despite the the reporting of written arrangements estimated cost savings due to paperwork Paperwork Reduction Act of 1995 will impose burden on institutions. We burden reduction, the full time As part of its continuing effort to estimate that 36 institutions will need to equivalent of those employees who reduce paperwork and respondent calculated NPV most likely remains a burden, the Department provides the report such activities. We anticipate that salary expense. Finally, any savings general public and Federal agencies an institution will require an average of identified that would benefit profits with an opportunity to comment on .5 hours (30 minutes) to report such would have to be offset by the proposed and continuing collections of activities for a total estimated burden of corresponding reduction in revenue information in accordance with the 18 hours under OMB Control Number resulting from no longer being able to Paperwork Reduction Act of 1995 (PRA) 1845–NEW1. apply NPV. Regarding overall economic (44 U.S.C. 3506(c)(2)(A)). This helps We estimate that there are 12 impact, it would be negligible given that ensure that the public understands the proprietary institutions that will be total savings of $255,245 is spread over Department’s collection instructions, required to report this information for 6 85% of the nearly 3,000 participating respondents can provide the requested burden hours (12 institutions × .5 hours for-profit institutions. There are also data in the desired format, reporting = 6 hours). We estimate that there are 11 some small increases in burden related burden (time and financial resources) is private institutions that will be required to reporting about direct assessment minimized, collection instruments are to report this information for 5 burden programs that is expected to increase clearly understood, and the Department hours (11 institutions × .5 hours = 5 burden on small entities by can properly assess the impact of hours). We estimate that there are 13 approximately 10 hours, a small collection requirements on respondents. increase for those small institutions that A Federal agency may not conduct or public institutions that will be required choose to participate in direct sponsor a collection of information to report this information for 7 burden × assessment programs or written unless OMB approves the collection hours (13 institutions .5 hours = 7 arrangements. under the PRA and the corresponding hours).

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600.21—UPDATING APPLICATION INFORMATION—1845–NEW1

Time factor Institution type Respondents Responses (hours) Burden hours Cost $106.94

Proprietary ...... 12 12 .5 6 $642 Private ...... 11 11 .5 5 538 Public ...... 13 13 .5 7 749

Total ...... 36 36 ...... 18 1,926

Section 668.5—Written Arrangements Burden Calculation: The proposed from the institution. Based on the To Provide Education Programs burden of 120 hours in the information explanation provided in the preamble, Requirements: The proposed collection 1845–NEW2 is being the regulations in § 668.28(b) no longer regulations in § 668.5 which required an withdrawn. applies to the calculation of the eligible institution to demonstrate how Section 668.28—Non-Title IV Revenue treatment of revenue. Therefore, the an ineligible institution has the (90/10) current burden applied under OMB experience in the delivery and Control Number 1845–0096 will be assessment of the program or portions Requirements: The regulations in eliminated. Upon the effective date of thereof that the ineligible institution § 668.28 remove the Net Present Value these regulation, the currently assessed would be contracted to deliver under calculation currently in the regulations. 2,808 burden hours will be the terms of the written arrangement has Burden Calculation: This regulatory discontinued. been removed from the final rule. language change will remove burden

SECTION 668.28—NON-TITLE IV REVENUE (90/10)—1845–0096

Time factor Cost savings Institution type Respondents Responses (hours) Burden hours $106.94/hour

Proprietary ...... ¥936 ¥936 2 ¥1,872 $¥200,192 Proprietary ...... ¥936 ¥936 1 ¥936 ¥100,096

Total ...... ¥1,872 ¥1,872 ...... ¥2,808 ¥300,288

The estimated cost to institutionsis Postsecondary Education be small entities, most of the reduction $53.47 per hour based on the 2018 mean Administrators 62 × 2 to account for and corresponding cost savings will hourly information from the Bureau of benefits and expenses for a total per accrue to those institutions. Labor Statistics Occupational hour cost of $106.94. As 85 percent of Employment Statistics for for-profit institutions are considered to

OMB control No. & estimated Estimated costs Regulatory section Information collection burden (change in burden) $106.94/hour

§ 600.21 Updating application The regulations in § 600.21 require the institution to only re- 1845–NEW1—18 hours ...... $1,926 information. port the addition of a second or subsequent direct as- sessment program without the review and approval of the Department when it previously been awarded such approval. The regulations also require an institution to re- port the establishment of a written arrangement between the eligible institution and an ineligible institution or orga- nization in which the ineligible institution or organization would provide more than 25 percent of a program. § 668.5—Written arrange- The regulations in § 668.5 requiring the eligible institution to 1845–NEW2—0 hours ...... 0 ments to provide education demonstrate how the ineligible institution has the experi- programs. ence in the delivery and assessment of the program or portions thereof that the ineligible institution would be contracted to deliver under the terms of the written ar- rangement has been removed from the final rule and this estimated burden is withdrawn. § 668.28 Non-title IV revenue The regulations in § 668.28 removes the Net Present Value ¥2,808 ...... (300,288) (90/10). calculation currently in the regulations.

62 www.bls.gov/oes/current/oes119033.htm.

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Collection of Information OMB control number affected by the The total burden hours and change in regulations follows: the burden hours associated with each

OMB control No. Total burden hours Change in burden hours

1845–NEW1 ...... + 18 + 18 1845–NEW2 ...... 0 0 1845–0096 ...... ¥2,808 ¥2,808

Total ...... ¥2,790 ¥2,790

Intergovernmental Review You may also access documents of the ■ c. Adding, in alphabetical order, a These regulations are not subject to Department published in the Federal definition for ‘‘Juvenile justice facility’’. ■ Executive Order 12372 and the Register by using the article search d. Revising the definition ‘‘Nonprofit regulations in 34 CFR part 79. feature at: www.federalregister.gov. institution’’. Specifically, through the advanced ■ e. Removing the authority citation at Assessment of Educational Impact search feature at this site, you can limit the end of the section. Based on the response to the NPRM your search to documents published by The additions and revisions read as and on our review, we have determined the Department. follows: that these final regulations do not List of Subjects § 600.2 Definitions. require transmission of information that * * * * * any other agency or authority of the 34 CFR Part 600 Academic engagement: Active United States gathers or makes Colleges and universities, Grant participation by a student in an available. programs-education, Loan programs- instructional activity related to the Federalism education, Reporting and recordkeeping student’s course of study that— requirements, Student aid, Vocational Executive Order 13132 requires us to (1) Is defined by the institution in education. ensure meaningful and timely input by accordance with any applicable State and local elected officials in the 34 CFR Part 602 requirements of its State or accrediting agency; development of regulatory policies that Colleges and universities, Vocational have federalism implications. (2) Includes, but is not limited to— education. (i) Attending a synchronous class, ‘‘Federalism implications’’ means lecture, recitation, or field or laboratory substantial direct effects on the States, 34 CFR Part 668 activity, physically or online, where on the relationship between the Administrative practice and there is an opportunity for interaction National Government and the States, or procedure, Colleges and universities, on the distribution of power and between the instructor and students; Consumer protection, Grant programs- (ii) Submitting an academic responsibilities among the various education, Loan programs-education, assignment; levels of government. In the NPRM we Reporting and recordkeeping (iii) Taking an assessment or an exam; noted that parts 600 and 668 may have requirements, Student aid, Vocational (iv) Participating in an interactive federalism implications and encouraged education. tutorial, webinar, or other interactive State and local elected officials to Betsy DeVos, computer-assisted instruction; review and provide comments on these (v) Participating in a study group, final regulations. In the Public Comment Secretary of Education. group project, or an online discussion section of this preamble, we discuss any For the reasons discussed in the that is assigned by the institution; or comments we received on this subject. preamble, the Secretary amends parts (vi) Interacting with an instructor Accessible Format: Individuals with 600, 602, and 668 of title 34 of the Code about academic matters; and disabilities can obtain this document in of Federal Regulations as follows: (3) Does not include, for example— an accessible format (e.g., braille, large (i) Living in institutional housing; print, audiotape, or compact disc) on PART 600—INSTITUTIONAL (ii) Participating in the institution’s request to the person listed under FOR ELIGIBILITY UNDER THE HIGHER meal plan; FURTHER INFORMATION CONTACT. EDUCATION ACT OF 1965, AS (iii) Logging into an online class or Electronic Access to This Document: AMENDED tutorial without any further The official version of this document is ■ participation; or the document published in the Federal 1. The authority citation for part 600 (iv) Participating in academic Register. You may access the official continues to read as follows: counseling or advisement. edition of the Federal Register and the Authority: 20 U.S.C. 1001, 1002, 1003, * * * * * Code of Federal Regulations at 1088, 1091, 1094, 1099b, and 1099c, unless Clock hour: (1) A period of time www.govinfo.gov. At this site you can otherwise noted. consisting of— view this document, as well as all other ■ 2. Section 600.2 is amended by: (i) A 50- to 60-minute class, lecture, documents of this Department ■ a. Adding, in alphabetical order, a or recitation in a 60-minute period; published in the Federal Register, in definition for ‘‘Academic engagement’’. (ii) A 50- to 60-minute faculty- text or Adobe Portable Document ■ b. Revising the definitions of ‘‘Clock supervised laboratory, shop training, or Format (PDF). To use PDF, you must hour’’, ‘‘Correspondence course’’, internship in a 60-minute period; have Adobe Acrobat Reader, which is ‘‘Credit hour’’, ‘‘Distance education’’, (iii) Sixty minutes of preparation in a available free at the site. and ‘‘Incarcerated student’’. correspondence course; or

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(iv) In distance education, 50 to 60 other academic work leading to the (ii) Monitoring the student’s academic minutes in a 60-minute period of award of credit hours; and engagement and success and ensuring attendance in— (2) Permits an institution, in that an instructor is responsible for (A) A synchronous or asynchronous determining the amount of work promptly and proactively engaging in class, lecture, or recitation where there associated with a credit hour, to take substantive interaction with the student is opportunity for direct interaction into account a variety of delivery when needed on the basis of such between the instructor and students; or methods, measurements of student monitoring, or upon request by the (B) An asynchronous learning activity work, academic calendars, disciplines, student. involving academic engagement in and degree levels. * * * * * which the student interacts with * * * * * Incarcerated student: A student who technology that can monitor and Distance education: (1) Education that is serving a criminal sentence in a document the amount of time that the uses one or more of the technologies Federal, State, or local penitentiary, student participates in the activity. listed in paragraphs (2)(i) through (iv) of prison, jail, reformatory, work farm, (2) A clock hour in a distance this definition to deliver instruction to juvenile justice facility, or other similar education program does not meet the students who are separated from the correctional institution. A student is not requirements of this definition if it does instructor or instructors and to support considered incarcerated if that student not meet all accrediting agency and regular and substantive interaction is in a half-way house or home State requirements or if it exceeds an between the students and the instructor detention or is sentenced to serve only agency’s or State’s restrictions on the or instructors, either synchronously or weekends. For purposes of Pell Grant number of clock hours in a program that asynchronously. eligibility under 34 CFR 668.32(c)(2)(ii), may be offered through distance (2) The technologies that may be used a student who is incarcerated in a education. to offer distance education include— juvenile justice facility, or in a local or (3) An institution must be capable of (i) The internet; county facility, is not considered to be monitoring a student’s attendance in 50 (ii) One-way and two-way incarcerated in a Federal or State penal out of 60 minutes for each clock hour transmissions through open broadcast, institution, regardless of which under this definition. closed circuit, cable, microwave, governmental entity operates or has Correspondence course: (1) A course broadband lines, fiber optics, satellite, jurisdiction over the facility, including provided by an institution under which or wireless communications devices; the Federal Government or a State, but the institution provides instructional (iii) Audio conference; or is considered incarcerated for the materials, by mail or electronic (iv) Other media used in a course in purposes of determining costs of transmission, including examinations conjunction with any of the attendance under section 472 of the on the materials, to students who are technologies listed in paragraphs (2)(i) HEA in determining eligibility for and separated from the instructors. through (iii) of this definition. the amount of the Pell Grant. Interaction between instructors and (3) For purposes of this definition, an Juvenile justice facility: A public or students in a correspondence course is instructor is an individual responsible private residential facility that is limited, is not regular and substantive, for delivering course content and who operated primarily for the care and and is primarily initiated by the student. meets the qualifications for instruction rehabilitation of youth who, under State (2) If a course is part correspondence established by an institution’s juvenile justice laws— and part residential training, the accrediting agency. (1) Are accused of committing a Secretary considers the course to be a (4) For purposes of this definition, delinquent act; correspondence course. substantive interaction is engaging (2) Have been adjudicated delinquent; (3) A correspondence course is not students in teaching, learning, and or distance education. assessment, consistent with the content (3) Are determined to be in need of Credit hour: Except as provided in 34 under discussion, and also includes at supervision. CFR 668.8(k) and (l), a credit hour is an least two of the following— * * * * * amount of student work defined by an (i) Providing direct instruction; Nonprofit institution: An institution institution, as approved by the (ii) Assessing or providing feedback that— institution’s accrediting agency or State on a student’s coursework; (1)(i) Is owned and operated by one of approval agency, that is consistent with (iii) Providing information or more nonprofit corporations or commonly accepted practice in responding to questions about the associations, no part of the net earnings postsecondary education and that— content of a course or competency; of which benefits any private (1) Reasonably approximates not less (iv) Facilitating a group discussion shareholder or individual; than— regarding the content of a course or (ii) Is legally authorized to operate as (i) One hour of classroom or direct competency; or a nonprofit organization by each State in faculty instruction and a minimum of (v) Other instructional activities which it is physically located; and two hours of out-of-class student work approved by the institution’s or (iii) Is determined by the U.S. Internal each week for approximately fifteen program’s accrediting agency. Revenue Service to be an organization to weeks for one semester or trimester hour (5) An institution ensures regular which contributions are tax-deductible of credit, or ten to twelve weeks for one interaction between a student and an in accordance with section 501(c)(3) of quarter hour of credit, or the equivalent instructor or instructors by, prior to the the Internal Revenue Code (26 U.S.C. amount of work over a different period student’s completion of a course or 501(c)(3)); or of time; or competency— (2) For a foreign institution— (ii) At least an equivalent amount of (i) Providing the opportunity for (i) An institution that is owned and work as required in paragraph (1)(i) of substantive interactions with the operated only by one or more nonprofit this definition for other academic student on a predictable and scheduled corporations or associations; and activities as established by the basis commensurate with the length of (ii)(A) If a recognized tax authority of institution, including laboratory work, time and the amount of content in the the institution’s home country is internships, practica, studio work, and course or competency; and recognized by the Secretary for purposes

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of making determinations of an prompt action is taken by the requirements in this part and in 34 CFR institution’s nonprofit status for title IV Department on any materially complete part 668 if the institution chooses to— purposes, is determined by that tax application required under this section. (A) Continue to participate in the title authority to be a nonprofit educational (2) If the institution also wishes to be IV, HEA programs beyond the institution; or certified to participate in the title IV, scheduled expiration of the institution’s (B) If no recognized tax authority of HEA programs, it must indicate that current eligibility and certification the institution’s home country is intent on the application, and submit all designation; recognized by the Secretary for purposes the documentation indicated on the (B) Reestablish eligibility and of making determinations of an application to enable the Secretary to certification as a private nonprofit, institution’s nonprofit status for title IV determine that it satisfies the relevant private for-profit, or public institution purposes, the foreign institution certification requirements contained in following a change in ownership that demonstrates to the satisfaction of the 34 CFR part 668, subparts B and L. results in a change in control as Secretary that it is a nonprofit (3) A freestanding foreign graduate described in § 600.31; or educational institution. medical school, or a foreign institution (C) Reestablish eligibility and * * * * * that includes a foreign graduate medical certification after the institution changes its status as a proprietary, nonprofit, or ■ 3. Section 600.7 is amended by: school, must include in its application ■ a. Redesignating paragraph (b)(2) as to participate— public institution. (b)(3). (i)(A) A list of all medical school (ii) The Secretary must ensure prompt ■ b. Adding a new paragraph (b)(2). educational sites and where they are action is taken by the Department on ■ c. Removing the authority citation at located, including all sites at which its any materially complete application the end of the section. students receive clinical training, except required under paragraph (a)(2)(i) of this The addition reads as follows: those clinical training sites that are not section. used regularly, but instead are chosen (3) A freestanding foreign graduate § 600.7 Conditions of institutional by individual students who take no medical school, or a foreign institution eligibility. more than two electives at the location that includes a foreign graduate medical * * * * * for no more than a total of eight weeks; school, must include in its reapplication (b) * * * and to participate— (2) Calculating the number of (B) The type of clinical training (core, (i)(A) A list of all of the foreign correspondence students. For purposes required clinical rotation, not required graduate medical school’s educational of paragraph (a)(1)(ii) of this section, a clinical rotation) offered at each site sites and where they are located, student is considered ‘‘enrolled in listed on the application in accordance including all sites at which its students correspondence courses’’ if the student’s with paragraph (a)(3)(i)(A) of this receive clinical training, except those enrollment in correspondence courses section; and clinical training sites that are not used constituted more than 50 percent of the (ii) Whether the school offers— regularly, but instead are chosen by courses in which the student enrolled (A) Only post-baccalaureate/ individual students who take no more during an award year. equivalent medical programs, as defined than two electives at the location for no * * * * * in § 600.52; more than a total of eight weeks; and ■ 4. Section 600.10 is amended by (B) Other types of programs that lead (B) The type of clinical training (core, revising paragraph (c)(1)(iii) and to employment as a doctor of required clinical rotation, not required removing the authority citation at the osteopathic medicine or doctor of clinical rotation) offered at each site end of the section to read as follows: medicine; or listed on the application in accordance (C) Both; and with paragraph (b)(3)(i)(A) of this § 600.10 Date, extent, duration, and (iii) Copies of the formal affiliation section; and consequence of eligibility. agreements with hospitals or clinics (ii) Whether the school offers— * * * * * providing all or a portion of a clinical (A) Only post-baccalaureate/ (c) * * * training program required under equivalent medical programs, as defined (1) * * * § 600.55(e)(1). in § 600.52; (iii) For a first direct assessment (b) Reapplication. (1) A currently (B) Other types of programs that lead program under 34 CFR 668.10, the first designated eligible institution that is not to employment as a doctor of direct assessment program offered at participating in the title IV, HEA osteopathic medicine or doctor of each credential level, and for a programs must apply to the Secretary medicine; or comprehensive transition and for a determination that the institution (C) Both; and postsecondary program under 34 CFR continues to meet the requirements in (iii) Copies of the formal affiliation 668.232, obtain the Secretary’s approval. this part if the Secretary requests the agreements with hospitals or clinics * * * * * institution to reapply. If the institution providing all or a portion of a clinical chooses to be certified to participate in training program required under ■ 5. Section 600.20 is revised to read as the title IV, HEA programs, it must § 600.55(e)(1). follows: submit an application to the Secretary (c) Application to expand eligibility. § 600.20 Notice and application and must submit all the supporting A currently designated eligible procedures for establishing, reestablishing, documentation indicated on the institution that wishes to expand the maintaining, or expanding institutional application to enable the Secretary to scope of its eligibility and certification eligibility and certification. determine that it satisfies the relevant and disburse title IV, HEA Program (a) Initial eligibility application. (1) certification requirements contained in funds to students enrolled in that An institution that wishes to establish subparts B and L of 34 CFR part 668. expanded scope must apply to the its eligibility to participate in any HEA (2)(i) A currently designated eligible Secretary and wait for approval to— program must submit an application to institution that participates in the title (1) Add an educational program or a the Secretary for a determination that it IV, HEA programs must apply to the location at which the institution offers qualifies as an eligible institution under Secretary for a determination that the or will offer 50 percent or more of an this part. The Secretary must ensure institution continues to meet the educational program if one of the

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following conditions applies, otherwise the Secretary receives the notice (i) Describe in the notice how the it must report to the Secretary under described in paragraph (d)(2) of this institution determined the need for the § 600.21: section at least 90 days before the first program and how the program was (i) The institution participates in the day of class of the educational program. designed to meet local market needs, or title IV, HEA programs under a (B) If an institution does not provide for an online program, regional or provisional certification, as provided in timely notice in accordance with national market needs. This description 34 CFR 668.13. paragraph (d)(1)(ii)(A) of this section, must contain any wage analysis the (ii) The institution receives title IV, the institution must obtain approval of institution may have performed, HEA program funds under the the additional educational program from including any consideration of Bureau reimbursement or cash monitoring the Secretary for title IV, HEA program of Labor Statistics data related to the payment method, as provided in 34 CFR purposes. program; part 668, subpart K. (C) If an additional educational (ii) Describe in the notice how the (iii) The institution acquires the assets program is required to be approved by program was reviewed or approved by, of another institution that provided the Secretary for title IV, HEA program or developed in conjunction with, educational programs at that location purposes under paragraph (d)(1)(ii)(B) of business advisory committees, program during the preceding year and this section, the Secretary may grant integrity boards, public or private participated in the title IV, HEA approval, or request further information oversight or regulatory agencies, and programs during that year. prior to making a determination of businesses that would likely employ (iv) The institution would be subject whether to approve or deny the graduates of the program; to a loss of eligibility under 34 CFR additional educational program. (iii) Submit documentation that the 668.188 if it adds that location. (D) When reviewing an application program has been approved by its (v) The Secretary notifies, or has under paragraph (d)(1)(ii)(C) of this accrediting agency or is otherwise notified, the institution that it must section, the Secretary will take into included in the institution’s apply for approval of an additional consideration the following: accreditation by its accrediting agency, educational program or a location under (1) The institution’s demonstrated or comparable documentation if the § 600.10(c). financial responsibility and institution is a public postsecondary (2) Increase its level of program administrative capability in operating vocational institution approved by a offering (e.g., adding graduate degree its existing programs. recognized State agency for the approval programs when it previously offered (2) Whether the additional of public postsecondary vocational only baccalaureate degree programs); educational program is one of several education in lieu of accreditation; and (3) Add an educational program if the (iv) Provide the date of the first day institution is required to apply to the new programs that will replace similar programs currently provided by the of class of the new program. Secretary for approval under § 600.10(c); (e) Secretary’s response to (4) Add a branch campus at a location institution, as opposed to supplementing or expanding the current applications. (1) If the Secretary that is not currently included in the receives an application under paragraph institution’s eligibility and certification programs provided by the institution. (3) Whether the number of additional (a) or (b)(1) of this section, the Secretary designation; notifies the institution— (5) For a freestanding foreign graduate educational programs being added is inconsistent with the institution’s (i) Whether the applicant institution medical school, or a foreign institution qualifies in whole or in part as an that includes a foreign graduate medical historic program offerings, growth, and operations. eligible institution under the school, add a location that offers all or appropriate provisions in §§ 600.4 (4) Whether the process and a portion of the foreign graduate through 600.7; and determination by the institution to offer medical school’s core clinical training (ii) Of the locations and educational an additional educational program that or required clinical rotations, except for programs that qualify as the eligible leads to gainful employment in a those locations that are included in the institution if only a portion of the recognized occupation is sufficient. accreditation of a medical program applicant qualifies as an eligible (E)(1) If the Secretary denies an accredited by the Liaison Committee on institution. Medical Education (LCME) or the application from an institution to offer (2) If the Secretary receives an American Osteopathic Association an additional educational program, the application under paragraph (a) or (b) of (AOA); or denial will be based on the factors this section and that institution applies (6) Convert an eligible location to a described in paragraphs (d)(1)(ii)(D)(2) to participate in the title IV, HEA branch campus. and (3) of this section, and the Secretary programs, the Secretary notifies the (d) Notice and application—(1) Notice will explain in the denial how the institution— and application procedures. (i) To institution failed to demonstrate that the (i) Whether the institution is certified satisfy the requirements of paragraphs program is likely to lead to gainful to participate in those programs; (a), (b), and (c) of this section, an employment in a recognized (ii) Of the title IV, HEA programs in institution must notify the Secretary of occupation. which it is eligible to participate; its intent to offer an additional (2) If the Secretary denies the (iii) Of the title IV, HEA programs in educational program, or provide an institution’s application to add an which it is eligible to apply for funds; application to expand its eligibility, in additional educational program, the (iv) Of the effective date of its a format prescribed by the Secretary and Secretary will permit the institution to eligibility to participate in those provide all the information and respond to the reasons for the denial programs; and documentation requested by the and request reconsideration of the (v) Of the conditions under which it Secretary to make a determination of its denial. may participate in those programs. eligibility and certification. (2) Notice format. An institution that (3) If the Secretary receives an (ii)(A) An institution that notifies the notifies the Secretary of its intent to application under paragraph (b)(2) of Secretary of its intent to offer an offer an additional educational program this section, the Secretary notifies the educational program under paragraph under paragraph (c)(3) of this section institution whether it continues to be (c)(3) of this section must ensure that must at a minimum— certified, or whether it reestablished its

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eligibility and certification to participate § 600.52 Definitions. institutions and must meet all in the title IV, HEA programs and the * * * * * requirements of paragraph (1) of this scope of such approval. Foreign institution: (1) For the definition, and the other requirements (4) If the Secretary receives an purposes of students who receive title of this part. For the purposes of this application under paragraph (c)(1) of IV aid, an institution that— paragraph (3), an educational enterprise this section for an additional location, (i) Is not located in the United States; consists of two or more locations the Secretary notifies the institution (ii) Except as provided with respect to offering all or part of an educational whether the location is eligible or clinical training offered under program that are directly or indirectly ineligible to participate in the title IV, § 600.55(h)(1), § 600.56(b), or under common ownership. HEA programs, and the date of § 600.57(a)(2)— * * * * * eligibility if the location is determined (A) Has no U.S. location; eligible. (B) Has no written arrangements, ■ 8. Section 600.54 is amended by (5) If the Secretary receives an within the meaning of 34 CFR 668.5, revising paragraph (c) and removing the application under paragraph (c)(2) of with institutions or organizations authority citation at the end of the this section for an increase in the level located in the United States for those section to read as follows: of program offering, or for an additional institutions or organizations to provide a portion of an eligible program, as § 600.54 Criteria for determining whether a educational program under paragraph foreign institution is eligible to apply to (c)(3) of this section, the Secretary defined under 34 CFR 668.8, except for participate in the Direct Loan Program. written arrangements for no more than notifies the institution whether the * * * * * program qualifies as an eligible 25 percent of the courses required by program, and if the program qualifies, the program to be provided by eligible (c)(1) Notwithstanding 34 CFR 668.5, the date of eligibility. institutions located in the United States; written arrangements between an (6) If the Secretary receives an and eligible foreign institution and an application under paragraph (c)(4) or (5) (C) Does not permit students to ineligible entity are limited to those of this section to have a branch campus complete an eligible program by under which— certified to participate in the title IV, enrolling in courses offered in the (i) The ineligible entity is an HEA programs as a branch campus, the United States, except that it may permit institution that meets the requirements Secretary notifies the institution students to complete up to 25 percent of in paragraphs (1)(iii) and (iv) of the whether that branch campus is certified the program by— definition of ‘‘foreign institution’’ in to participate and the date that the (1) Enrolling in the coursework, § 600.52; and research, work, or special studies branch campus is eligible to begin (ii) The ineligible foreign institution offered by an eligible institution in the participation. provides 25 percent or less of the ■ United States; or 6. Amend § 600.21 by revising (2) Participating in an internship or educational program. paragraph (a)(11) and adding paragraphs externship provided by an ineligible (2) For the purpose of this paragraph (a)(12) and (13) and removing the organization as described in 34 CFR (c), written arrangements do not include authority citation at the end of the 668.5(h)(2); affiliation agreements for the provision section to read as follows: (iii) Is legally authorized by the of clinical training for foreign medical, § 600.21 Updating application information. education ministry, council, or veterinary, and nursing schools. equivalent agency of the country in (a) * * * * * * * * which the institution is located to (11) For any program that is required provide an educational program beyond PART 602—THE SECRETARY’S to provide training that prepares a the secondary education level; and RECOGNITION OF ACCREDITING student for gainful employment in a (iv) Awards degrees, certificates, or AGENCIES recognized occupation— other recognized educational credentials (i) Establishing the eligibility or in accordance with § 600.54(e) that are ■ 9. The authority citation for part 602 reestablishing the eligibility of the officially recognized by the country in continues to read as follows: program; which the institution is located. (ii) Discontinuing the program’s Authority: 20 U.S.C. 1099b, unless (2) Notwithstanding paragraph otherwise noted. eligibility; (1)(ii)(C) of this definition, independent (iii) Ceasing to provide the program research done by an individual student ■ 10. Section 602.3 is amended by: for at least 12 consecutive months; in the United States for not more than ■ a. Adding periods at the ends of (iv) Losing program eligibility under one academic year is permitted, if it is § 600.40; or paragraphs (a)(1) through (14). conducted during the dissertation phase ■ b. Redesignating paragraphs (a)(6) (v) Changing the program’s name, CIP of a doctoral program under the code or credential level. through (14) as paragraphs (a)(7) guidance of faculty, and the research is through (15). (12) Its addition of a second or performed only in a facility in the subsequent direct assessment program. United States. ■ c. Adding a new paragraph (a)(6). (13) Its establishment of a written (3) If the educational enterprise ■ d. In paragraph (b), removing the arrangement for an ineligible institution enrolls students both within the United definition of ‘‘Distance education.’’ or organization to provide more than 25 States and outside the United States, ■ percent of a program pursuant to 34 CFR e. Removing the authority citation at and the number of students who would the end of the section. 668.5(c). be eligible to receive title IV, HEA The addition reads as follows: * * * * * program funds attending locations ■ 7. Section 600.52 is amended by outside the United States is at least § 602.3 What definitions apply to this part? revising the definition of ‘‘Foreign twice the number of students enrolled institution’’ and removing the authority within the United States, the locations (a) * * * citation at the end of the section to read outside the United States must apply to (6) Distance education. as follows: participate as one or more foreign * * * * *

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PART 668—STUDENT ASSISTANCE § 668.2 General definitions. of work performed is equivalent to the GENERAL PROVISIONS (a) * * * academic workload of a full-time (7) Direct assessment program. student. ■ 11. The authority citation for part 668 * * * * * (7) For correspondence coursework— continues to read as follows: (25) Religious mission. (i) A full-time course load must be Authority: 20 U.S.C. 1001–1003, 1070g, * * * * * commensurate with the requirements 1085, 1088, 1091, 1092, 1094, 1099c, 1099c– (28) Teach-out. listed in paragraphs (1) through (6) of 1, 1221–3, and 1231a, unless otherwise (29) Teach-out agreement. this definition; and noted. (30) Teach-out plan. (ii) At least one-half of the coursework Section 668.14 also issued under 20 U.S.C. (31) Title IV, HEA program. must be made up of non- 1085, 1088, 1091, 1092, 1094, 1099a–3, (b) * * * correspondence coursework that meets 1099c, and 1141. Full-time student: An enrolled one-half of the institution’s requirement Section 668.41 also issued under 20 U.S.C. student who is carrying a full-time for full-time students. 1092, 1094, 1099c. academic workload, as determined by (8) For a subscription-based program, Section 668.91 also issued under 20 U.S.C. the institution, under a standard 1082, 1094. completion of a full-time course load Section 668.171 also issued under 20 applicable to all students enrolled in a commensurate with the requirements in U.S.C. 1094 and 1099c and section 4 of Pub. particular educational program. The paragraphs (1), (3), and (5) through (7) L. 95–452, 92 Stat. 1101–1109. student’s workload may include any of this definition. combination of courses, work, research, Section 668.172 also issued under 20 * * * * * U.S.C. 1094 and 1099c and section 4 of Pub. or special studies that the institution L. 95–452, 92 Stat. 1101–1109. considers sufficient to classify the Subscription-based program: A Section 668.175 also issued under 20 student as a full-time student. For a standard or nonstandard-term program U.S.C. 1094 and 1099c. term-based program that is not in which the institution charges a student for each term on a subscription ■ subscription-based, the student’s 12. Section 668.1 is amended by basis with the expectation that the revising paragraph (b) introductory text workload may include repeating any coursework previously taken in the student completes a specified number of and removing the authority citation at credit hours (or the equivalent) during the end of the section to read as follows: program; however, the workload may not include more than one repetition of that term. Coursework in a subscription- § 668.1 Scope. a previously passed course. For an based program is not required to begin * * * * * undergraduate student, an institution’s or end within a specific timeframe in (b) As used in this part, an minimum standard must equal or each term. Students in subscription- ‘‘institution,’’ unless otherwise exceed one of the following minimum based programs must complete a specified, includes— requirements, based on the type of cumulative number of credit hours (or program: the equivalent) during or following the * * * * * end of each term before receiving ■ 13. Section 668.2 is amended by: (1) For a program that measures progress in credit hours and uses subsequent disbursements of title IV, ■ a. Designating the undesignated words HEA program funds. An institution and phrases in paragraph (a) as standard terms (semesters, trimesters, or quarters), 12 semester hours or 12 establishes an enrollment status (for paragraphs (a)(1) through (26). example, full-time or half-time) that will ■ quarter hours per academic term. b. Adding periods at the ends of apply to a student throughout the newly designated paragraphs (a)(1) (2) For a program that measures progress in credit hours and does not student’s enrollment in the program, through (26). except that a student may change his or ■ c. Removing newly designated use terms, 24 semester hours or 36 quarter hours over the weeks of her enrollment status no more often paragraph (a)(26). than once per academic year. The ■ d. Further redesignating newly instructional time in the academic year, or the prorated equivalent if the number of credit hours (or the designated paragraphs (a)(7) through equivalent) a student must complete (23), (24), and (25) as paragraphs (a)(8) program is less than one academic year. (3) For a program that measures before receiving subsequent through (24), (26), and (27), disbursements is calculated by— respectively. progress in credit hours and uses ■ e. Adding new paragraphs (a)(7) and nonstandard-terms (terms other than (1) Determining for each term the (25) and paragraphs (a)(28) through (31). semesters, trimesters, or quarters) the number of credit hours (or the ■ f. In paragraph (b): number of credits determined by— equivalent) associated with the ■ i. Removing the definition of (i) Dividing the number of weeks of institution’s minimum standard for the ‘‘Academic Competitiveness Grant instructional time in the term by the student’s enrollment status (for (ACG) Program’’ and the authority number of weeks of instructional time example, full-time, three-quarter time, citation following the definition; in the program’s academic year; and or half-time) for that period ■ ii. Revising the definition of ‘‘Full- (ii) Multiplying the fraction commensurate with paragraph (8) in the time student’’ and removing the determined under paragraph (3)(i) of definition of ‘‘full-time student,’’ authority citation following the this definition by the number of credit adjusted for less than full-time students definition; hours in the program’s academic year. in light of the definitions of ‘‘half-time ■ iii. Adding in alphabetical order the (4) For a program that measures student’’ and ‘‘three-quarter time definition of ‘‘Subscription-based progress in clock hours, 24 clock hours student,’’ and adjusted to at least one program’’; and per week. credit (or the equivalent) for a student ■ iv. In the definition of ‘‘Third-party (5) A series of courses or seminars who is enrolled less than half-time; and servicer’’, revising paragraph (1)(i)(D) that equals 12 semester hours or 12 (2) Adding together the number of and removing the authority citation at quarter hours in a maximum of 18 credit hours (or the equivalent) the end of the definition. weeks. determined under paragraph (1) for each The additions and revisions read as (6) The work portion of a cooperative term in which the student was enrolled follows: education program in which the amount in and attended that program, excluding

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the current and most recently attended degree, certificate, or other recognized not owned or controlled by the same terms. educational credential otherwise individual, partnership, or corporation; * * * * * satisfies the requirements of § 668.8. and Third-party servicer: (1) * * * (2) If the written arrangement is (C) The eligible institution’s (i) * * * between two or more eligible accrediting agency or, if the institution (D) Originating loans; institutions that are owned or controlled is a public postsecondary vocational * * * * * by the same individual, partnership, or educational institution, the State agency corporation, the Secretary considers the listed in the Federal Register in ■ 14. Section 668.3 is amended by educational program to be an eligible accordance with 34 CFR part 603 has revising paragraphs (b)(2) and (3) and program if the educational program specifically determined that the removing the authority citation at the offered by the institution that grants the institution’s arrangement meets the end of the section to read as follows: degree, certificate, or other recognized agency’s standards for executing a § 668.3 Academic year. educational credential otherwise written arrangement with an ineligible * * * * * satisfies the requirements of § 668.8. institution or organization. (b) * * * * * * * * (d) Administration of title IV, HEA (2) A week of instructional time is any (c) Written arrangements between an programs. (1) If an institution enters week in which— eligible institution and an ineligible into a written arrangement as described (i) At least one day of regularly institution or organization. Except as in paragraph (a), (b), or (c) of this scheduled instruction or examinations provided in paragraph (d) of this section, or provides coursework as occurs, or, after the last scheduled day section, if an eligible institution enters provided in paragraph (h)(2) of this of classes for a term or payment period, into a written arrangement with an section, except as provided in paragraph at least one day of study for final institution or organization that is not an (d)(2) of this section, the institution at examinations occurs; or eligible institution under which the which the student is enrolled as a (ii)(A) In a program offered using ineligible institution or organization regular student must determine the asynchronous coursework through provides part of the educational student’s eligibility for the title IV, HEA distance education or correspondence program of students enrolled in the program funds, and must calculate and courses, the institution makes available eligible institution, the Secretary disburse those funds to that student. the instructional materials, other considers that educational program to * * * * * resources, and instructor support be an eligible program if— (f) Workforce responsiveness. Nothing necessary for academic engagement and (1) The ineligible institution or in this or any other section in this part completion of course objectives; and organization has not— prohibits an institution utilizing written (B) In a program using asynchronous (i) Had its eligibility to participate in arrangements from aligning or coursework through distance education, the title IV, HEA programs terminated modifying its curriculum or academic the institution expects enrolled students by the Secretary; requirements in order to meet the to perform educational activities (ii) Voluntarily withdrawn from recommendations or requirements of demonstrating academic engagement participation in the title IV, HEA industry advisory boards that include during the week; and programs under a termination, show- employers who hire program graduates, (3) Instructional time does not include cause, suspension, or similar type widely recognized industry standards any scheduled breaks and activities not proceeding initiated by the institution’s and organizations, or industry- included in the definition of ‘‘academic State licensing agency, accrediting recognized credentialing bodies, engagement’’ in 34 CFR 600.2, or agency, or guarantor, or by the including making governance or periods of orientation or counseling. Secretary; decision-making changes as an * * * * * (iii) Had its certification to participate alternative to allowing or requiring ■ 15. Section 668.5 is amended by: in the title IV, HEA programs revoked faculty control or approval or ■ a. Revising paragraphs (a), (c), and by the Secretary; integrating industry-recognized (d)(1). (iv) Had its application for credentials into existing degree ■ b. Adding paragraphs (f), (g), and (h). recertification to participate in the title programs. ■ c. Removing the authority citation at IV, HEA programs denied by the (g) Calculation of percentage of the end of the section. Secretary; or program. When determining the The revisions and additions read as (v) Had its application for certification percentage of the program that is follows: to participate in the title IV, HEA provided by an ineligible institution or programs denied by the Secretary; organization under paragraph (c) of this § 668.5 Written arrangements to provide (2) The educational program offered section, the institution divides the educational programs. by the institution that grants the degree, number of semester, trimester, or (a) Written arrangements between certificate, or other recognized quarter credit hours, clock hours, or the eligible institutions. (1) Except as educational credential otherwise equivalent that are provided by the provided in paragraph (a)(2) of this satisfies the requirements of § 668.8; and ineligible organization or organizations section, if an eligible institution enters (3)(i) The ineligible institution or by the total number of semester, into a written arrangement with another organization provides 25 percent or less trimester, or quarter credit hours, clock eligible institution, or with a consortium of the educational program, including in hours, or the equivalent required for of eligible institutions, under which the accordance with 34 CFR 602.22(b)(4); or completion of the program. A course is other eligible institution or consortium (ii)(A) The ineligible institution or provided by an ineligible institution or provides part of the educational organization provides more than 25 organization if the organization with program to students enrolled in the first percent but less than 50 percent of the which the institution has a written institution, the Secretary considers that educational program, in accordance arrangement has authority over the educational program to be an eligible with 34 CFR 602.22(a)(1)(ii)(J); design, administration, or instruction in program if the educational program (B) The eligible institution and the the course, including, but not limited offered by the institution that grants the ineligible institution or organization are to—

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(1) Establishing the requirements for (2) A quarter hour must include at institution’s accreditation or its State successful completion of the course; least 20 clock hours of instruction. approval agency. (2) Delivering instruction in the * * * * * (2) The institution’s direct assessment course; or 17. Section 668.10 is revised to read application must provide information (3) Assessing student learning. as follows: satisfactory to the Secretary that (h) Non-applicability to other includes— interactions with outside entities. § 668.10 Direct assessment programs. (i) A description of the educational Written arrangements are not necessary (a)(1) A direct assessment program is program, including the educational for, and the limitations in this section a program that, in lieu of credit or clock credential offered (degree level or do not apply to— hours as the measure of student certificate) and the field of study; (1) Acceptance by the institution of learning, utilizes direct assessment of (ii) A description of how the direct transfer credits or use of prior learning student learning, or recognizes the assessment program is structured, assessment or other non-traditional direct assessment of student learning by including information about how and methods of providing academic credit; others. The assessment must be when the institution determines on an or consistent with the accreditation of the individual basis what each student (2) The internship or externship institution or program utilizing the enrolled in the program needs to learn portion of a program if the internship or results of the assessment. and how the institution excludes from externship is governed by accrediting (2) Direct assessment of student consideration of a student’s eligibility agency standards, or, in the case of an learning means a measure of a student’s for title IV, HEA program funds any eligible foreign institution, the knowledge, skills, and abilities designed credits or competencies earned on the standards of an outside oversight entity, to provide evidence of the student’s basis of prior learning; such as an accrediting agency or proficiency in the relevant subject area. (iii) A description of how learning is government entity, that require the (3) An institution must establish a assessed and how the institution assists oversight and supervision of the methodology to reasonably equate each students in gaining the knowledge institution, where the institution is module in the direct assessment needed to pass the assessments; responsible for the internship or program to either credit hours or clock (iv) The number of semester, externship and students are monitored hours. This methodology must be trimester, or quarter credit hours, or by qualified institutional personnel. consistent with the requirements of the clock hours, that are equivalent to the institution’s accrediting agency or State amount of student learning being ■ 16. Section 668.8 is amended by approval agency. directly assessed for the certificate or revising paragraphs (e)(1)(iii), (k)(2), and (4) All regulatory requirements in this degree; (l) and removing the authority citation chapter that refer to credit or clock (v) The methodology the institution at the end of the section to read as hours as a measurement apply to direct uses to determine the number of credit follows: assessment programs according to or clock hours to which the program or § 668.8 Eligible program. whether they use credit or clock hour programs are equivalent; and equivalencies, respectively. (vi) Documentation from the * * * * * (5) A direct assessment program that institution’s accrediting agency or State (e) * * * (1) * * * is not consistent with the requirements approval agency indicating that the (iii) The institution can demonstrate of the institution’s accrediting agency or agency has evaluated the institution’s reasonable program length, in State approval agency is not an eligible offering of direct assessment program(s) accordance with § 668.14(b)(26); and program as provided under § 668.8. In and has included the program(s) in the * * * * * order for any direct assessment program institution’s grant of accreditation and (k) * * * to qualify as an eligible program, the approval documentation from the (2) Each course within the program is accrediting agency must have— accrediting agency or State approval acceptable for full credit toward (i) Evaluated the program based on agency indicating agreement with the completion of an eligible program the agency’s accreditation standards and institutions methodology for offered by the institution that provides criteria, and included it in the determining the direct assessment an associate degree, bachelor’s degree, institution’s grant of accreditation or program’s equivalence in terms of credit professional degree, or equivalent preaccreditation; and or clock hours. degree as determined by the Secretary, (ii) Reviewed and approved the (vii) Notwithstanding paragraphs (a) provided that— institution’s claim of each direct and (b) of this section, no program (i) The eligible program requires at assessment program’s equivalence in offered by a foreign institution that least two academic years of study; and terms of credit or clock hours. involves direct assessment will be (ii) The institution can demonstrate (b)(1) An institution that wishes to considered to be an eligible program that least one student graduated from offer a direct assessment program must under § 668.8. the program during the current award apply to the Secretary to have its direct (c) A direct assessment program may year or the two preceding award years. assessment program or programs use learning resources (e.g., courses or (l) Formula. For purposes of determined to be eligible programs for portions of courses) that are provided by determining whether a program title IV, HEA program purposes. entities other than the institution described in paragraph (h) of this Following the Secretary’s initial providing the direct assessment program section satisfies the requirements approval of a direct assessment without regard to the limitations on contained in paragraph (c)(3) or (d) of program, additional direct assessment contracting for part of an educational this section, and the number of credit programs at an equivalent or lower program in § 668.5(c)(3). hours in that educational program for academic level may be determined to be (d) Title IV, HEA program funds may the purposes of the title IV, HEA eligible without further approvals from be used to support instruction provided, programs— the Secretary except as required by 34 or overseen, by the institution, except (1) A semester or trimester hour must CFR 600.10(c)(1)(iii), 600.20(c)(1), or for the portion of the program that the include at least 30 clock hours of 600.21(a), as applicable, if such student is awarded based on prior instruction; and programs are consistent with the learning.

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(e) Unless an institution has received (d) * * * recognized occupation for which the initial approval from the Secretary to (3) * * * program prepares the student as offer direct assessment programs, and (iii) Documents filed by electronic established in a State adjacent to the the institution’s offering of direct transmission must be transmitted to the State in which the institution is located; assessment coursework is consistent Secretary in accordance with and with the institution’s accreditation and instructions provided by the Secretary (ii) Establish the need for the training State authorization, if applicable, title in the notice of revocation. for the student to obtain employment in IV, HEA program funds may not be used * * * * * the recognized occupation for which the for— (5) The mailing date of a notice of program prepares the student; (1) The course of study described in revocation or a request for * * * * * § 668.32(a)(1)(ii) and (iii) and reconsideration of a revocation is the (31) The institution will submit a (a)(2)(i)(B), if offered using direct date evidenced on the original receipt of teach-out plan to its accrediting agency assessment; or mailing from the U.S. Postal Service or in compliance with 34 CFR 602.24(c) (2) Remedial coursework described in another service that provides delivery and the standards of the institution’s § 668.20, if offered using direct confirmation for that document. accrediting agency. The institution will assessment. * * * * * update its teach-out plan upon the (f) Student progress in a direct ■ 19. Section 668.14 is amended by assessment program may be measured occurrence of any of the following revising paragraphs (b)(10), (26), and using a combination of— events: (1) Credit hours and credit hour (31) introductory text to read as follows: * * * * * equivalencies; or § 668.14 Program participation agreement. ■ 20. Section 668.22 is amended by: (2) Clock hours and clock hour * * * * * ■ a. Removing the word ‘‘or’’ at the end equivalencies. (b) * * * of paragraph (a)(2)(i)(B). ■ 18. Section 668.13 is amended by: (10) In the case of an institution that ■ b. Revising paragraph (a)(2)(i)(C). ■ a. Redesignating paragraph (a)(1) as advertises job placement rates as a ■ c. Adding paragraph (a)(2)(i)(D). paragraph (a)(1)(i). means of attracting students to enroll in ■ d. Revising paragraph (a)(2)(ii). ■ b. Adding paragraph (a)(1)(ii). the institution, the institution will make ■ e. Removing the word ‘‘nonterm’’ and ■ c. Adding paragraph (b)(3). adding in its place the word ‘‘non-term’’ ■ available to prospective students, at or d. Removing the word ‘‘or’’ at the end before the time that those students in paragraph (a)(2)(iii)(B). of paragraph (c)(1)(i)(D). ■ f. Revising paragraph (a)(3). ■ apply for enrollment— e. Removing the period and adding in (i) The most recent available data ■ g. Removing the citation its place ‘‘; or’’ at the end of paragraph concerning employment statistics, ‘‘§ 668.164(g)’’ at the end of paragraph (c)(1)(i)(E). graduation statistics, and any other (a)(5) and adding in its place the citation ■ f. Adding paragraph (c)(1)(i)(F). ■ information necessary to substantiate ‘‘§ 668.164(i)’’. g. Removing the word ‘‘facsimile’’ and ■ adding in its place the word the truthfulness of the advertisements; h. Revising paragraphs (a)(6)(ii)(A), ‘‘electronic’’ in paragraphs (d)(3)(i) and and (d)(1)(vii), and (i). (ii) Relevant State licensing ■ (d)(3)(ii)(C). i. Removing the citation ■ h. Revising paragraph (d)(3)(iii). requirements of the State in which the ‘‘§ 668.164(g)’’ in paragraph (l)(1) and ■ i. Removing paragraph (d)(3)(iv). institution is located for any job for adding in its place the citation ■ j. Revising paragraph (d)(5). which the course of instruction is ‘‘§ 668.164(j)’’. ■ k. Removing the authority citation at designed to prepare such prospective ■ j. Removing the citation the end of the section. students, as provided in ‘‘§ 668.164(g)(2)’’ in paragraph (l)(4) and The additions and revisions read as § 668.43(a)(5)(v); adding in its place the citation follows: * * * * * ‘‘§ 668.164(j)(2)’’. (26) If an educational program offered ■ k. Revising paragraphs (l)(6) and (7). § 668.13 Certification procedures. by the institution is required to prepare ■ l. Adding paragraph (l)(9). (a) * * * (1)(i) * * * a student for gainful employment in a ■ m. Removing the authority citation at (ii) On application from the recognized occupation, the institution the end of the section. institution, the Secretary certifies a must— The additions and revisions read as location of an institution that meets the (i) Demonstrate a reasonable follows: requirements of § 668.13(a)(1)(i) as a relationship between the length of the branch if it satisfies the definition of program and entry level requirements § 668.22 Treatment of title IV funds when ‘‘branch’’ in 34 CFR 600.2. for the recognized occupation for which a student withdraws. * * * * * the program prepares the student. The (a) * * * (b) * * * Secretary considers the relationship to (2)(i) * * * (3) In the event that the Secretary does be reasonable if the number of clock (C) For a student in a standard or not make a determination to grant or hours provided in the program does not nonstandard-term program, excluding a deny certification within 12 months of exceed the greater of— subscription-based program, the student the expiration of its current period of (A) One hundred and fifty percent of is not scheduled to begin another course participation, the institution will the minimum number of clock hours within a payment period or period of automatically be granted renewal of required for training in the recognized enrollment for more than 45 calendar certification, which may be provisional. occupation for which the program days after the end of the module the (c) * * * (1)(i) * * * prepares the student, as established by student ceased attending, unless the (F) The institution is a participating the State in which the institution is student is on approved leave of absence, institution that has been provisionally located, if the State has established such as defined in paragraph (d) of this recertified under the automatic a requirement, or as established by any section; or recertification requirement in paragraph Federal agency; or (D) For a student in a non-term (b)(3) of this section. (B) The minimum number of clock program or a subscription-based * * * * * hours required for training in the program, the student is unable to

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resume attendance within a payment attendance, and that date is no later (2) Loan funds that make up the post- period or period of enrollment for more than 60 calendar days after the student withdrawal disbursement only after than 60 calendar days after ceasing ceased attendance. obtaining confirmation from the attendance, unless the student is on an (B) If an institution has obtained the student, or parent in the case of a parent approved leave of absence, as defined in written confirmation of future PLUS loan, that they still wish to have paragraph (d) of this section. attendance in accordance with the loan funds disbursed in accordance (ii)(A) Notwithstanding paragraph paragraph (a)(2)(ii)(A) of this section— with paragraph (a)(6)(iii) of this section. (a)(2)(i) of this section— (1) A student may change the date of * * * * * (1) A student who completes all the return that begins later in the same (d) * * * (1) * * * requirements for graduation from his or payment period or period of enrollment, (vii) Except for a clock hour or non- her program before completing the days provided that the student does so in term credit hour program, or a or hours in the period that he or she was writing prior to the return date that he subscription-based program, upon the scheduled to complete is not considered or she had previously confirmed; student’s return from the leave of to have withdrawn; (2) For standard and nonstandard- absence, the student is permitted to (2) In a program offered in modules, term programs, excluding subscription- complete the coursework he or she a student is not considered to have based programs the later module that he began prior to the leave of absence; and withdrawn if the student successfully or she will attend begins no later than * * * * * completes— 45 calendar days after the end of the (i) One module that includes 49 (i) Order of return of title IV funds— module the student ceased attending; (1) Loans. Unearned funds returned by percent or more of the number of days and in the payment period, excluding the institution or the student, as (3) For non-term and subscription- appropriate, in accordance with scheduled breaks of five or more based programs, the student’s program consecutive days and all days between paragraph (g) or (h) of this section permits the student to resume respectively, must be credited to modules; attendance no later than 60 calendar (ii) A combination of modules that outstanding balances on title IV loans days after the student ceased made to the student or on behalf of the when combined contain 49 percent or attendance. more of the number of days in the student for the payment period or (C) If an institution obtains written period of enrollment for which a return payment period, excluding scheduled confirmation of future attendance in breaks of five or more consecutive days of funds is required. Those funds must accordance with paragraph (a)(2)(ii)(A) be credited to outstanding balances for and all days between modules; or of this section and, if applicable, (iii) Coursework equal to or greater the payment period or period of paragraph (a)(2)(ii)(B) of this section, enrollment for which a return of funds than the coursework required for the but the student does not return as institution’s definition of a half-time is required in the following order: scheduled— (i) Unsubsidized Federal Direct student under § 668.2 for the payment (1) The student is considered to have period; Stafford loans. withdrawn from the payment period or (ii) Subsidized Federal Direct Stafford (3) For a payment period or period of period of enrollment; and enrollment in which courses in the loans. (2) The student’s withdrawal date and (iii) Federal Direct PLUS received on program are offered in modules— the total number of calendar days in the (i) A student is not considered to have behalf of the student. payment period or period of enrollment (2) Remaining funds. If unearned withdrawn if the institution obtains would be the withdrawal date and total written confirmation from the student at funds remain to be returned after number of calendar days that would repayment of all outstanding loan the time that would have been a have applied if the student had not withdrawal of the date that he or she amounts, the remaining excess must be provided written confirmation of a credited to any amount awarded for the will attend a module that begins later in future date of attendance in accordance the same payment period or period of payment period or period of enrollment with paragraph (a)(2)(ii)(A) of this for which a return of funds is required enrollment; and section. (ii) For standard and nonstandard- in the following order: term programs, excluding subscription- * * * * * (i) Federal Pell Grants. based programs, that module begins no (3) For purposes of this section, ‘‘title (ii) Iraq and Afghanistan Service later than 45 calendar days after the end IV grant or loan assistance’’ includes Grants. of the module the student ceased only assistance from the Direct Loan, (iii) FSEOG Program aid. attending; Federal Pell Grant, Iraq and Afghanistan (iv) TEACH Grants. (4) For a subscription-based program, Service Grant, TEACH Grant, and * * * * * a student is not considered to have FSEOG programs, not including the (l) * * * withdrawn if the institution obtains non-Federal share of FSEOG awards if (6) A program is ‘‘offered in modules’’ written confirmation from the student at an institution meets its FSEOG if the program uses a standard term or the time that would have been a matching share by the individual nonstandard-term academic calendar, is withdrawal of the date that he or she recipient method or the aggregate not a subscription-based program, and a will resume attendance, and that date method. course or courses in the program do not occurs within the same payment period * * * * * span the entire length of the payment or period of enrollment and is no later (6) * * * period or period of enrollment. than 60 calendar days after the student (ii)(A) If outstanding charges exist on (7)(i) ‘‘Academic attendance’’ and ceased attendance; and the student’s account, the institution ‘‘attendance at an academically-related (5) For a non-term program, a student may credit the student’s account up to activity’’ must include academic is not considered to have withdrawn if the amount of outstanding charges in engagement as defined under 34 CFR the institution obtains written accordance with § 668.164(c) with all or 600.2. confirmation from the student at the a portion of any— (ii) A determination of ‘‘academic time that would have been a withdrawal (1) Grant funds that make up the post- attendance’’ or ‘‘attendance at an of the date that he or she will resume withdrawal disbursement; and academically-related activity’’ must be

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made by the institution; a student’s Department of and’’ after the phrase ■ b. Removing the period and adding in certification of attendance that is not ‘‘establishes rules governing the’’ in the its place ‘‘; or’’ in paragraph (i)(2). supported by institutional first sentence of paragraph (a) and ■ c. Adding paragraph (i)(3). documentation is not acceptable. removing the authority citation at the The addition reads as follows: * * * * * end of the section. § 668.171 General. (9) A student in a program offered in ■ 24. Section 668.113 is amended by: modules is scheduled to complete the ■ a. Removing the word ‘‘shall’’ and * * * * * days in a module if the student’s adding in its place the word ‘‘must’’ in (i) * * * coursework in that module was used to both instances it is used in paragraph (c) (3) Deny the institution’s application determine the amount of the student’s introductory text. for certification or recertification to eligibility for title IV, HEA funds for the ■ b. Redesignating paragraphs (d)(1) and participate in the title IV, HEA payment period or period of enrollment. (2) as paragraphs (d)(2) and (3). programs. * * * * * ■ c. Adding a new paragraph (d)(1). ■ 27. Section 668.174 is amended by: ■ d. Removing the authority citation at ■ a. Revising paragraph (b)(1)(i) § 668.28 [Amended] the end of the section. introductory text. ■ 21. Section 668.28 is amended by The addition reads as follows: ■ b. Adding the phrase ‘‘ownership or’’ removing and reserving paragraph (b) § 668.113 Request for review. after the word ‘‘substantial’’ and and removing the authority citation at removing the word ‘‘or’’ at the end of * * * * * the end of the section. paragraph (b)(1)(i)(A). (d)(1) If the final audit determination ■ ■ c. Redesignating paragraph (b)(1)(i)(B) 22. Section 668.34 is amended by: or final program review determination ■ as paragraph (b)(1)(i)(C). a. Revising paragraph (a)(5). in paragraph (a) of this section results ■ ■ d. Adding a new paragraph b. Revising paragraph (1) in the from the institution’s classification of a definition for ‘‘Maximum timeframe’’ in (b)(1)(i)(B). course or program as distance ■ paragraph (b). education, or the institution’s e. Adding ‘‘entity,’’ after the phrase ■ c. Removing the authority citation at assignment of credit hours, the ‘‘That person,’’ in paragraph (b)(1)(ii). ■ the end of the section. Secretary relies upon the requirements f. Adding the phrase ‘‘or entity’’ after The revisions read as follows: of the institution’s accrediting agency or the word ‘‘person’’ in paragraphs State approval agency regarding (b)(2)(i) and (ii). § 668.34 Satisfactory academic progress. ■ qualifications for instruction and g. Adding ‘‘entity,’’ after the phrase (a) * * * ‘‘owes the liability by that’’ in paragraph (5) The policy specifies— whether the amount of work associated with the institution’s credit hours is (b)(2)(ii)(A). (i) For all programs, the maximum ■ h. Adding ‘‘entity,’’ after the phrase timeframe as defined in paragraph (b) of consistent with commonly accepted practice in postsecondary education, in ‘‘owes the liability that the’’ in this section; and paragraph (b)(2)(ii)(B). (ii) For a credit hour program using applying the definitions of ‘‘distance ■ i. Adding the phrase ‘‘or entity’’ after standard or nonstandard terms that is education’’ and ‘‘credit hour’’ in 34 CFR the phrase ‘‘The person’’ in paragraphs not a subscription-based program, the 600.2. (b)(2)(iv)(A) and (B). pace, measured at each evaluation, at * * * * * ■ j. Adding the phrase ‘‘or entity’’ after which a student must progress through ■ 25. Section 668.164 is amended by: both uses of the word ‘‘person’’ in his or her educational program to ensure ■ a. Adding the phrase ‘‘that is not a paragraph (c)(3) introductory text. that the student will complete the subscription-based program’’ after the ■ k. Removing the authority citation at program within the maximum phrase ‘‘equal in length’’ in paragraphs the end of the section. timeframe, calculated by either dividing (i)(1)(i) and (ii). The revisions and additions read as the cumulative number of hours the ■ b. Removing the word ‘‘or’’ at the end follows: student has successfully completed by of paragraph (i)(1)(i). the cumulative number of hours the ■ c. Removing the period and adding in § 668.174 Past performance. student has attempted or by determining its place ‘‘; or’’ in paragraph (i)(1)(ii)(B). * * * * * ■ the number of hours that the student d. Adding paragraph (i)(1)(iii). (b) Past performance of persons or should have completed by the The addition reads as follows: entities affiliated with an institution. evaluation point in order to complete § 668.164 Disbursing funds. (1)(i) Except as provided in paragraph the program within the maximum (b)(2) of this section, an institution is timeframe. In making this calculation, * * * * * (i)(1) * * * not financially responsible if a person or the institution is not required to include entity who exercises substantial remedial courses; (iii) If the student is enrolled in a subscription-based program, the later ownership or control over the * * * * * institution, as described under 34 CFR (b) * * * of— (A) Ten days before the first day of 600.31, or any member or members of Maximum timeframe. *** that person’s family alone or together— (1) For an undergraduate program classes of a payment period; or * * * * * measured in credit hours, a period that (B) The date the student completed (B) Exercised substantial ownership is no longer than 150 percent of the the cumulative number of credit hours or control over another institution that published length of the educational associated with the student’s enrollment closed without a viable teach-out plan program, as measured in credit hours, or status in all prior terms that the student or agreement approved by the expressed in calendar time; attended under the definition of a subscription-based program in § 668.2. institution’s accrediting agency and * * * * * * * * * * faithfully executed by the institution; or § 668.111 [Amended] ■ 26. Section 668.171 is amended by: * * * * * 23. Section 668.111 is amended by ■ a. Removing the word ‘‘or’’ at the end [FR Doc. 2020–18636 Filed 9–1–20; 8:45 am] adding the phrase ‘‘issuance by the of paragraph (i)(1). BILLING CODE 4000–01–P

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