Proposed Rule2024-30919
Program Integrity and Institutional Quality: State Authorization, Cash Management, Accreditation and Related Issues
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Published
December 26, 2024
Issuing agencies
Education Department
Abstract
The U.S. Department of Education (Department) announces the termination of the negotiated rulemaking process for three Program Integrity and Institutional Quality issues that were undertaken as part of a larger negotiated rulemaking process for Federal programs authorized under title IV of the Higher Education Act of 1965, as amended (HEA): State Authorization, Cash Management, Accreditation and Related Issues (Accreditation).
Full Text
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<title>Federal Register, Volume 89 Issue 247 (Thursday, December 26, 2024)</title>
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[Federal Register Volume 89, Number 247 (Thursday, December 26, 2024)]
[Proposed Rules]
[Pages 104937-104939]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-30919]
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DEPARTMENT OF EDUCATION
34 CFR Parts 600, 602, and 668
[Docket ID ED-2022-OPE-0050]
RIN 1840-AD82, 1840-AD83, 1840-AD86
Program Integrity and Institutional Quality: State Authorization,
Cash Management, Accreditation and Related Issues
AGENCY: Office of Postsecondary Education, Department of Education.
ACTION: Termination of negotiated rulemaking process for State
Authorization, Cash Management, Accreditation and Related Issues.
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SUMMARY: The U.S. Department of Education (Department) announces the
termination of the negotiated rulemaking process for three Program
Integrity and Institutional Quality issues that were undertaken as part
of a larger negotiated rulemaking process for
[[Page 104938]]
Federal programs authorized under title IV of the Higher Education Act
of 1965, as amended (HEA): State Authorization, Cash Management,
Accreditation and Related Issues (Accreditation).
DATES: The negotiated rulemaking process for State Authorization, Cash
Management, and Accreditation and Related Issues is terminated as of
December 20, 2024.
FOR FURTHER INFORMATION CONTACT: Scott Prince, U.S. Department of
Education, Office of Postsecondary Education, 400 Maryland Avenue SW,
5th Floor, Washington, DC 20202. Telephone: (202)453-5568. Email:
<a href="/cdn-cgi/l/email-protection#89c7eceedbeceec7d9dbc4c1ece5f9c9eceda7eee6ff"><span class="__cf_email__" data-cfemail="642a01033601032a3436292c0108142401004a030b12">[email protected]</span></a>.
If you are deaf, hard of hearing, or have a speech disability and
wish to access telecommunications relay services, please dial 7-1-1.
SUPPLEMENTARY INFORMATION:
Background
On March 24, 2023, the Department published a notification in the
Federal Register announcing our intent to establish a negotiated
rulemaking committee to prepare proposed regulations for the Federal
Student Aid programs authorized under title IV of the HEA. See 88 FR
17777.
On April 11-13, 2023, the Department held a virtual public hearing
at which individuals and representatives of interested organizations
provided advice and recommendations relating to the issues identified
in the March 24 notification. We also took written public comments from
March 24, 2023, through April 24, 2023.
On November 29, 2023, the Department published a negotiated
rulemaking in the Federal Register announcing its intent to establish a
negotiated rulemaking committee and soliciting nominations for
individual negotiators to represent key stakeholder constituencies for
the issues to be negotiated to serve on the rulemaking committee. See
88 FR 83365. The document covered six issues:
(1) The Federal TRIO programs, including improvements to
programmatic eligibility and operations under 34 CFR parts 642 through
647;
(2) The Secretary's recognition of accrediting agencies in 34 CFR
part 602 and related parts;
(3) Institutional eligibility under 34 CFR 600.2, including State
authorization as a component of such eligibility under 34 CFR 600.9;
(4) Return of title IV funds, to address requirements for
participating institutions to return unearned title IV funds in a
manner that protects students and taxpayers while easing administrative
burden for institutions of higher education under 34 CFR 668.22;
(5) Cash management, to address timely student access to
disbursements of title IV, HEA Federal student financial assistance and
provisions related to credit balances, escheatment, or loss of such
funds under 34 CFR part 668, subpart K; and
(6) The definition of ``distance education'' under 34 CFR 600.2 as
it pertains to clock hour programs and reporting for students who
enroll primarily online.
The Department held three negotiated rulemaking sessions of four
days each. During each daily negotiated rulemaking session, we provided
an opportunity for public comment and expanded that time to one hour
for the second and third sessions. Additionally, non-Federal
negotiators shared feedback from their stakeholders with the
negotiating committee.
On July 24, 2024, the Department published in the Federal Register
a Notice of Proposed Rulemaking (NPRM) proposing to amend the Student
Assistance General Provisions regulations to promote program integrity
and institutional quality in three of the six negotiated rulemaking
issues: (1) distance education; (2) the return of title IV, HEA funds;
and (3) the Federal TRIO programs. See 89 FR 60256. This document does
not apply to the issues covered in the July 24, 2024, NPRM, which will
be addressed through that separate rulemaking.
This document pertains to the three remaining issues included in
the November 29, 2023, notification establishing the negotiated
rulemaking committee: accreditation, state authorization, and cash
management. For the reasons discussed below, the Department is
terminating the negotiated rulemaking process for these issues.
Termination of the Negotiated Rulemaking Process for State
Authorization, Cash Management, Accreditation and Related Issues
The Department began the rulemaking efforts described above to
amend 34 CFR parts 600, 602, and 668 to create more student-friendly
policies relating to the use and receipt of Federal student financial
aid and to hold institutions accountable for providing high-quality
educational opportunities. However, the Department has decided not to
make any regulatory changes on the issues of accreditation, state
authorization, and cash management at this time, to allow for
additional evaluation of recent changes in other regulations and
industry practices. This decision reflects the Department's commitment
to deliberative policymaking and consideration of feedback received
during the negotiated rulemaking process, which highlighted the need
for additional time and further study. Terminating the negotiated
rulemaking process at this time will allow the agency to gather
additional data, assess evolving industry practices, and evaluate
whether existing regulations remain necessary or require modification.
The Department considered several factors in reaching the decision
to terminate the negotiated rulemaking process on these remaining three
identified issues. We considered that two of the areas--state
authorization and accreditation--have recently undergone significant
changes, as explained below, that continue to affect the field even
after the conclusion of negotiated rulemaking, and we decided it is
preferable to wait and see the effectiveness of those changes before
issuing further regulations. Waiting to assess the effects of these
changes will allow the Department to better identify any needed future
alterations and improve the evidentiary base for future rulemaking.
Regarding state authorization, the Department decided to terminate
the negotiated rulemaking process so we could observe the effects of
two recent policy changes. One is a change to Sec. 668.14(b)(32)(iii)
that went into effect on July 1, 2024. See 88 FR 74568. The new
regulation requires institutions to certify to the Department that they
are in compliance with all State laws related to closure of
postsecondary institutions, including record retention, teach-out plans
or agreements, and tuition recovery funds or surety bonds. That change
addressed one of the major concerns the Department had related to state
authorization--ensuring that States were not limited in their ability
to manage the effects of closure on students living within their
borders, even if the college is located in a different state. Given
that the change to Sec. 668.14(b)(32)(iii) only took effect a few
months ago, evaluating its effect as closures occur will help the
Department understand whether further modifications may be necessary.
The Department also believes it is worth evaluating how State-led
efforts at improving state authorization proceed before making further
regulatory changes. This particularly involves the policy modification
process adopted by the National Council for State Authorization
Reciprocity Agreements (NC-SARA), an organization formed in partnership
with four regional compacts
[[Page 104939]]
in which almost all states across the country participate for purposes
of providing state authorization and reciprocity. NC-SARA first started
using a policy modification process in January 2023 to create a formal
mechanism for addressing issues with state authorization and
reciprocity.\1\ That process continues to be refined. As many
commenters noted during the public hearings and negotiated rulemaking
sessions on state authorization, allowing this policy modification
process to continue is one way to address the Department's goals.
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\1\ <a href="https://www.nc-sara.org/sara-policy-modification-process">https://www.nc-sara.org/sara-policy-modification-process</a>.
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Regarding accreditation, the Department adopted a series of final
regulations in this area that went into effect on July 1, 2020. See 84
FR 58834. These regulations made significant changes to the
Department's process for reviewing and recognizing accrediting
agencies. Although these regulations went into effect four years ago,
the Department is still in the midst of the first cycle of implementing
these changes across all accrediting agencies. That is a result of the
five-year timeframe on renewal of recognition for accrediting agencies,
as well as the requirements that agencies submit applications for
renewal two years before their deadline for renewal and the additional
periods institutions have for submitting compliance or monitoring
reports. Allowing a full 5-year review cycle under the 2020 regulations
for all accrediting agencies provides a greater opportunity to
demonstrate the effectiveness of the existing rules and evaluate
outcomes before making other changes to the process. This also allows
Department staff to focus on existing reviews instead of directing
focus away from these key activities. Seeing the effects across a full
cycle will help us better identify any needed modifications.
The Department also has decided to terminate the negotiated
rulemaking process on the third remaining regulatory area, cash
management. While we discussed several regulatory changes to this
topic, the most significant was a proposal addressing textbook billing
practices. That issue generated significant discussion during
negotiated rulemaking and from public commenters, among all the cash
management proposals. We are persuaded by concerns raised during the
negotiated rulemaking sessions about the need to gather additional
data, assess evolving industry practices, and evaluate how policies
related to the costs of books and supplies as part of tuition and fees
best serve students and their use of financial aid. The current
provisions are in Sec. 668.164(c) and (m). The Department received
public feedback during the negotiated rulemaking process articulating
the benefits of these policies. The Department also acknowledges
concerns from commenters, including from students who have experience
navigating these products, that these policies may not always deliver
costs to students that are below market rates or may not give students
a true opportunity to opt out. Given this mix of input, we believe
further research to assess the benefits or drawbacks of this way of
billing for textbooks is needed before proceeding with rulemaking.
Additionally, because textbook billing is the most significant issue
related to cash management addressed by the committee, we do not
believe exploring further regulatory changes in this part of the
regulations is the best use of limited Department resources at this
time. Any institution that includes the costs of books and supplies as
part of tuition and fees as described in 668.164(c) must ensure they
have a clearly communicated and actionable policy under which the
student may opt out of the method the institution provides for students
to obtain books and supplies. If the Department continues to find that
institutions are not complying with the current requirements in Sec.
668.164(c) and (m), we may propose additional protective or restrictive
measures to ensure that students have access to books or supplies at
below competitive market rates.
For the reasons described above, at this time the Secretary
exercises his discretion to terminate the negotiated rulemaking process
for issues related to accreditation, state authorization, and cash
management. Were the Department to issue a regulation in this area in
the future, it would be bound by the requirements of Section 492(a) and
(b) of the HEA, 20 U.S.C. 1098a(a) and (b).
Accessible Format: On request to the program contact person listed
under FOR FURTHER INFORMATION CONTACT, individuals with disabilities
can obtain this document in an accessible format. The Department will
provide the requestor with an accessible format that may include Rich
Text Format (RTF) or text format (txt), a thumb drive, an MP3 file,
braille, large print, audiotape, compact disc, or other accessible
format.
Electronic Access to This Document: The official version of this
document is the document published in the Federal Register. You may
access the official edition of the Federal Register and the Code of
Federal Regulations at <a href="http://www.govinfo.gov">www.govinfo.gov</a>. At this site you can view this
document, as well as all other Department documents published in the
Federal Register, in text or Portable Document Format (PDF). To use PDF
you must have Adobe Acrobat Reader, which is available free at the
site.
You may also access Department documents published in the Federal
Register by using the article search feature at
<a href="http://www.federalregister.gov">www.federalregister.gov</a>. Specifically, through the advanced search
feature at this site, you can limit your search to documents published
by the Department.
Miguel Cardona,
Secretary of Education.
[FR Doc. 2024-30919 Filed 12-20-24; 2:00 pm]
BILLING CODE 4000-01-P
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