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Business and Policy Areas
Business and Policy Areas

Few Changes Made to Final HEOA Rules

November 9, 2009

Four sets of final regulations were published by the Department of Education at the end of October to implement the Higher Education Opportunity Act (HEOA). The final rules generally take effect on July 1, 2010, although many of the statutory provisions are already effective. 

The four notices, and some of the topics addressed in each, follow: 

  1. Institutional Eligibility and the Secretary's Recognition of Accrediting Agencies  (October 27) - distance education, direct assessment programs, accreditation appeals
  2. Institutions and Lender Requirements Relating to Education Loans (October 28) - private education loans, code of conduct, default rates, preferred lender arrangements
  3. Lender and Guaranty Agency Loan Issues (October 29) - disability discharges
  4. General and Non-Loan Programmatic Issues (October 29) - year-round Pell, readmission of servicemembers, emergency notification, fire statistics, consumer disclosures 

Overall, ED made few notable changes from the proposed rules but did modify provisions governing readmission of servicemembers and year-round Pell Grants. 

Readmission of Servicemembers   

The HEOA requires institutions to readmit admitted or enrolled students who leave school to serve on active duty in the armed forces with the same academic standing as when they left. ED has taken the position that "academic standing" includes keeping institutional charges at what they were or would have been before the student went on active duty. In comments on the proposed rule, NACUBO explained how administratively burdensome it would be for institutions to calculate how much a student would have been charged perhaps years in the past. ED made some changes in the final rules in response to these and other comments, but has stuck with the premise that holding charges paid by the veteran steady is part of maintaining the same academic standing. 

Under the compromise in the final rules, institutions will only have to ensure that charges for tuition and fees do not exceed what the student was or would have been charged before leaving for military service. Other institutional charges and equipment and supplies do not need to be r considered. In addition, an institution may charge a student more than the prior charges to the extent that any additional amounts will be covered by veterans or servicemember educational benefits. This mean that if a veteran was eligible for $3,000 in GI Bill benefits for tuition and fees, the institution could charge up to $3,000 more than the amount the student would have been charged prior to active duty service. 

Unfortunately, this change to the rules does little to ease the administrative burden on institutions, which will still need to maintain archives of all factors used to calculate tuition and fees. A circular reasoning has also been introduced into the billing calculations:  in order to figure out how much the returning veteran may be charged, you need to know his or her eligibility for veterans' benefits which are tied to tuition and fees charges. 

Year-Round Pell Grants 

HEOA allows students to receive two Pell grant awards during a single award year in order to help them accelerate progress towards a degree. In the proposed rules, ED would have required that a student complete an academic year's worth of credit (generally 24 credit hours) before being eligible for a second Pell award. That would have meant that a student who took 6 hours in a summer term and 14 in the fall, would not be eligible for a second Pell grant to help cover costs of the spring term. ED backed down in response to numerous comments. The final rule calls for a student to be enrolled in credit hours that are attributable to a second academic year within the award year in order to receive a second scheduled Pell award.


Anne Gross
Vice President, Regulatory Affairs