On April 4, after months of work, the negotiated rulemaking committee on accreditation and innovation reached consensus, a significant achievement given the unusually wide range of issues it covered. By law, the Department of Education (ED) now must adopt the committee’s agreed-upon regulatory language.
Comprised of higher education stakeholders representing institutions, accreditors, states, students, and employers, the full committee was tasked with rewriting numerous federal regulations related to accreditation, Return of Title IV funds (R2T4), TEACH Grants, distance learning, state authorization, and more.
In an unprecedented move, ED circulated draft regulatory language for the committee to consider prior to their first session. It also organized three subcommittees to provide recommendations to the full committee on the following “buckets” of issues:
- Accreditation, Definition of a Credit Hour, and Byrd Scholarship
- TEACH Grant and Religious Freedom
- Distance Education, State Authorization for Distance Education, and Competency Based Education
In a further departure from previous neg regs, ED also gave the full committee the opportunity to reach consensus on each bucket independently, a move that ultimately proved unnecessary when the committee unanimously approved the proposed changes in all three buckets.
ED released the proposed draft language on April 17 and is expected to publish a Notice of Proposed Rulemaking for public comment on the committee’s approved regulations before the end of summer. Under the master calendar provision of the Higher Education Act, ED has until November 1 to finalize the new rules for them to go into effect by July 1 of the next calendar year.
What We Know Now
The final regulatory changes resulting from this neg reg will be far-reaching, and NACUBO is still determining how some of the new regulations could impact college and university business offices. However, business officers and bursars should be aware of proposed changes to rules governing R2T4.
Included in the expansive scope of this neg reg were some relatively minor updates and additions to R2T4 and cash management rules. These proposed changes will primarily affect institutions that offer module-based programming but also include small changes to subscription and non-term-based programming. At the outset of this process, ED made clear its intention to encourage innovation and adoption of new learning modalities. This necessitated the creation of previously nonexistent R2T4 rules for programming offered in modules, which currently rely on complex and burdensome subregulatory guidance.
The R2T4 rules for module-based programs, detailed in the committee’s consensus language for § 668.22, essentially set the limit for R2T4 at one-half of payment period completion. Per the consensus rules, a student is not considered to have withdrawn if they complete:
- “One module that includes 50 percent or more of the number of days in the payment period;
- A combination of modules that when combined contain 50 percent or more of the number of days in the payment period; or
- Coursework equal to or greater than the coursework required for the institution’s definition of a half-time student for the payment period.”
In other words, a student is not considered a withdrawal if they complete at least half of a payment period’s designated days, regardless of how many modules that entails.
Also included in the new language is guidance on the disbursement of Title IV funds to students in subscription-based programs. Per these new rules, an institution must use the later of: 10 days before the first day of classes of a payment period, or the date the student completed the cumulative number of credit hours in which they were previously enrolled. The committee amended numerous points in § 668.22 to make clear that subscription-based programs must operate with different rules than traditional quarter- or semester-based schedules.