Rule2024-31031
Program Integrity and Institutional Quality: Distance Education and Return of Title IV, HEA Funds
Primary source
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Published
January 3, 2025
Effective
July 1, 2026
Issuing agencies
Education Department
Abstract
The Secretary amends the Student Assistance General Provisions regulations governing participation in the student financial assistance programs authorized under title IV of the Higher Education Act of 1965, as amended (HEA), to promote program integrity and institutional quality. These regulations clarify, update, and consolidate certain provisions that apply to distance education and the return of title IV, HEA funds. They also make technical changes to the TRIO program regulations to reflect the current status of the Republic of Palau as a member of the Freely Associated States. This document provides notice that the Department fully closes out the Program Integrity and Institutional Quality: Distance Education and Return of Title IV, HEA Funds notice of proposed rulemaking. That is, we will not be finalizing the remainder of the Federal TRIO program provisions but may promulgate through future rulemaking efforts.
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[Federal Register Volume 90, Number 2 (Friday, January 3, 2025)]
[Rules and Regulations]
[Pages 470-504]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-31031]
[[Page 469]]
Vol. 90
Friday,
No. 2
January 3, 2025
Part III
Department of Education
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34 CFR Parts 600, 643, 644, et al.
Program Integrity and Institutional Quality: Distance Education and
Return of Title IV, HEA Funds; Final Rule
Federal Register / Vol. 90, No. 2 / Friday, January 3, 2025 / Rules
and Regulations
[[Page 470]]
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DEPARTMENT OF EDUCATION
34 CFR Parts 600, 643, 644, 645, 647, and 668
[Docket ED-2024-OPE-0050]
RIN 1840-AD85 and 1840-AD92
Program Integrity and Institutional Quality: Distance Education
and Return of Title IV, HEA Funds
AGENCY: Office of Postsecondary Education, Department of Education.
ACTION: Final regulations.
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SUMMARY: The Secretary amends the Student Assistance General Provisions
regulations governing participation in the student financial assistance
programs authorized under title IV of the Higher Education Act of 1965,
as amended (HEA), to promote program integrity and institutional
quality. These regulations clarify, update, and consolidate certain
provisions that apply to distance education and the return of title IV,
HEA funds. They also make technical changes to the TRIO program
regulations to reflect the current status of the Republic of Palau as a
member of the Freely Associated States. This document provides notice
that the Department fully closes out the Program Integrity and
Institutional Quality: Distance Education and Return of Title IV, HEA
Funds notice of proposed rulemaking. That is, we will not be finalizing
the remainder of the Federal TRIO program provisions but may promulgate
through future rulemaking efforts.
DATES: The regulations are effective July 1, 2026. For the
implementation dates of the regulatory provisions, see the
Implementation Date of These Regulations in SUPPLEMENTARY INFORMATION.
FOR FURTHER INFORMATION CONTACT: For distance education: Brian
Schelling. Telephone: (202) 987-0443. Email: <a href="/cdn-cgi/l/email-protection#c684b4afa7a8e895a5aea3aaaaafa8a186a3a2e8a1a9b0"><span class="__cf_email__" data-cfemail="6c2e1e050d02423f0f0409000005020b2c0908420b031a">[email protected]</span></a>.
For return of title IV funds: Aaron Washington. Telephone: (202) 987-
0911. Email: <a href="/cdn-cgi/l/email-protection#c283a3b0adacec95a3b1aaabaca5b6adac82a7a6eca5adb4"><span class="__cf_email__" data-cfemail="cd8cacbfa2a3e39aacbea5a4a3aab9a2a38da8a9e3aaa2bb">[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.
A brief summary of these final regulations are available at
<a href="http://www.regulations.gov/docket/ED-2024-OPE-0050">www.regulations.gov/docket/ED-2024-OPE-0050</a>.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Abbreviations
II. Executive Summary
1. Purpose of Regulatory Action
2. Authority for the Regulatory Action
III. Summary of Major Provisions
IV. Summary of Costs and Benefits
V. Implementation Date of These Regulations
VI. The NPRM and Public Comment
VII. Analysis of Public Comment and Changes
1. Process for Out of Scope Comments
2. Public Comment Period
3. Distance Education
4. Return of Title IV Funds
5. Federal TRIO Programs
VIII. Regulatory Impact Analysis
1. Congressional Review Act
2. Need for Regulatory Action
3. Summary of Comments and Changes From the NPRM
4. Discussion of Costs, Benefits, and Transfers
5. Accounting Statement
6. Alternatives Considered
7. Regulatory Flexibility Act
IX. Paperwork Reduction Act of 1995
I. Abbreviations
CFR: Code of Federal Regulations
CIP Code: Classification of Instructional Programs Code
DEOA: Department of Education Organization Act
EOC: Educational Opportunity Centers
FFEL: Federal Family Education Loan program
FSA: Federal Student Aid
Freely Associated States: the Republic of Palau, the Federated
States of Micronesia, and the Republic of the Marshall Islands
HEA: Higher Education Act of 1965, as amended
McNair: Ronald E. McNair Postbaccalaureate Achievement Program
PEP: Eligible prison education program
PRWORA: Personal Responsibility and Work Opportunity Reconciliation
Act
R2T4: Return of title IV funds
RIA: Regulatory Impact Analysis
SSS: Student Support Services Program
Title IV, HEA Programs: Student financial assistance programs
authorized under title IV of the HEA
TRIO: Federal outreach and student services programs designed to
identify and provide services for individuals from disadvantaged
backgrounds
TS: Talent Search
UB: Upward Bound
II. Executive Summary
1. Purpose of This Regulatory Action
These final regulations address two substantive areas: distance
education and return of title IV funds (R2T4). Additionally, this
document makes technical changes to the TRIO program regulations to
reflect the current status of the Republic of Palau as a member of the
Freely Associated States and removes references to the Trust Territory
of the Pacific Islands. As noted above, we will not be finalizing the
remainder Federal TRIO provisions but may consider them in a future
rulemaking efforts.
The Department is addressing these areas to help ensure students
are well served by the eligible institutions they attend and ensure
that Federal Student Aid (FSA) programs work in the best interests of
students. As the two distinct topics are structured and addressed
independently in this final rule, the Department generally intends the
rule's provisions to be severable from each other. If any provision of
a particular subpart or its application to any person, act, or practice
is held invalid, the remainder of the subpart or the application of its
provisions to any other person, act, or practice will not be affected
thereby.
The distance education final regulations help the Department
improve its oversight of distance education and correspondence
programs. To accomplish this, the distance education regulations
improve the information available about students in such programs who
receive title IV, HEA funds by adding a definition of distance
education course, and requiring institutions to report their students'
distance education status.
The R2T4 final regulations increase the accuracy and simplicity of
performing R2T4 calculations; address unique circumstances for what
constitutes a withdrawal; and codify longstanding policies into
regulation.
The July 24, 2024, Notice of Proposed Rulemaking (NPRM), 89 FR
60256, for the Federal TRIO programs proposed to expand student
eligibility under certain TRIO programs for students who have enrolled
in or who seek to enroll in a high school in the United States,
territories, or Freely Associated States. After reviewing comments
received on the proposed rulemaking for TRIO, the Department has
decided not to finalize the Federal TRIO provisions other than the
technical change mentioned above, to reconsider how best to ensure that
the TRIO programs are able to reach all populations of disadvantaged
students. The Department may consider the remaining Federal TRIO
provisions in a future rulemaking effort.
2. Authority for This Regulatory Action
The legal basis for these final regulations is title IV of the
Higher Education Act of 1965, as amended (HEA), which authorizes the
Federal government's major student financial aid programs that are the
primary source of direct Federal support to students pursuing
postsecondary education. 20 U.S.C. 1070-1099d (sections 400-499 of the
HEA). Institutions participating in the title IV, HEA programs must
satisfy certain threshold and ongoing requirements, see id., and the
Secretary
[[Page 471]]
is given broad authority to carry out program requirements. 20 U.S.C.
1070(b) (section 400(b) of the HEA). As part of its oversight
responsibilities under title IV, the Department seeks to promote
program integrity and institutional quality. See generally 20 U.S.C.
1099c, 1099c-1, 1099c-2 (sections 498, 498A, and 498B of the HEA). To
this end, the Department's Student Assistance General Provisions
regulations establish threshold requirements for institutions to
participate and to continue participation in student financial
assistance programs. See generally 34 CFR parts 600-603, 642-647, 668,
673-676, 682-694. These final regulations update, consolidate, and
revise requirements in two distinct title IV areas: distance education
and the return of title IV, HEA funds, impacting 34 CFR parts 600 and
668. The Department's specific legal authority in these areas is set
forth below.
Distance Education. Section 103(7) of the HEA defines ``distance
education,'' and section 484(l) sets forth rules relating to courses
offered through distance education.
Return of Title IV, HEA Funds. Section 484B of the HEA outlines the
process that an institution must follow if a title IV, HEA aid
recipient withdraws from the institution during a payment period or
period of enrollment (also known as R2T4). The Department's various
changes to the R2T4 regulations benefit both institutions and students.
III. Summary of the Major Provisions of This Regulatory Action
These final regulations make the following changes.
Distance Education (Sec. Sec. 600.2, 668.3, 668.41)
<bullet> Amend Sec. 600.2 to add a definition for distance
education course.
<bullet> Add Sec. 668.41(h) to require institutions to report
student enrollment in distance education or correspondence courses
using a procedure that would be determined by the Department.
Return of Title IV Funds (Sec. Sec. 668.21, 668.22)
<bullet> Amend Sec. 668.22(a)(2)(ii)(A)(6) to exempt institutions
from performing an R2T4 calculation if: (1) a student is treated as
never having begun attendance; (2) the institution returns all title
IV, HEA assistance disbursed to the student for that payment period or
period of enrollment; (3) the institution refunds all institutional
charges to the student for that payment period or period of enrollment;
and (4) the institution writes off or cancels any payment period or
period of enrollment balance owed by the student to the institution due
to the institution's returning of title IV, HEA funds to the
Department.
<bullet> Amend Sec. 668.22(b)(2) to codify longstanding guidance
(since the 2005-06 award year \1\) that an institution that is required
to take attendance must document the date of the institution's
determination that the student withdrew no later than 14 days after the
student's last date of attendance as determined by the institution from
its attendance records.
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\1\ 2005-06 FSA Handbook--(page 5-32)--chrome--<a href="https://fsapartners.ed.gov/sites/default/files/2021-03/2005-2006%20Volume%205%20Master%20File.pdf">https://fsapartners.ed.gov/sites/default/files/2021-03/2005-2006%20Volume%205%20Master%20File.pdf</a>.
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<bullet> Amend Sec. 668.22(d)(1)(vii) to allow a confined or
incarcerated individual, in a term-based setting, to return at a
different point in their eligible prison education program (PEP) than
the point at which the student left off.
<bullet> Amend Sec. 668.22(f)(1)(ii)(A) to streamline and make
consistent institutions' calculation of the percentage of the payment
period completed for a clock-hour program.
<bullet> Amend Sec. 668.22(l)(9) to consider a module part of the
payment period used in the denominator of the R2T4 calculation only
when a student begins attendance in the module.
IV. Summary of Costs and Benefits
As further detailed in the Regulatory Impact Analysis, the
Department estimates net present value costs of $27,349,749 over ten
years at a 2 percent discount rate. This is equivalent to an annualized
cost of $3,044,753 over ten years. Additionally, we estimate annualized
quantified costs of $9,423,657 related to paperwork burden.
As also further detailed in the RIA, these final regulations will
have benefits, including, ensuring students are well served by the
institutions of higher education they attend and that Federal Student
Aid programs work in the best interests of students. New regulations
for distance education will help the Department better measure and
account for student outcomes, improve oversight over distance
education, and ensure students are receiving effective education by
requiring students' distance education enrollment status. The R2T4
final regulations will increase the accuracy and simplicity of
performing R2TV calculations, add additional clarity to institutions on
reporting, and codify longstanding policies.
V. Implementation Date of These Regulations
These regulations are effective on July 1, 2026. Section 482(c)(1)
\2\ of the HEA requires that regulations affecting programs under title
IV of the HEA be published in final form by November 1 prior to the
start of the award year (July 1) to which they apply. HEA section
482(c)(2) \3\ also permits the Secretary to designate any regulation as
one that an entity subject to the regulations may choose to implement
earlier and outline the conditions for early implementation.
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\2\ 20 U.S.C. 1089(c)(1).
\3\ 20 U.S.C. 1089(c)(2).
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The Secretary is exercising his authority under HEA section 482(c)
to designate certain regulatory changes to part 668 in this document
for early implementation beginning February 3, 2025. The Secretary has
designated the following provisions for early implementation: allow an
incarcerated student enrolled in a term-based program who takes a leave
of absence to return without resuming coursework at the same point, and
exempting institutions from performing an R2T4 calculation under the
withdrawal exemption in Sec. 668.22(a)(2)(ii)(A)(6).
VI. The NPRM and Public Comments
On July 24, 2024, the Secretary published a NPRM for these
regulations in the Federal Register. These final regulations contain
changes from the NPRM, which we explain in the Analysis of Comments and
Changes section of this document. The NPRM included proposed
regulations on three topics: distance education, R2T4, and the Federal
TRIO programs.
We developed these regulations through negotiated rulemaking.
Section 492 of the HEA requires that, before publishing any proposed
regulations to implement programs under title IV of the HEA, the
Secretary must obtain public involvement in the development of the
proposed regulations. After obtaining advice and recommendations, the
Secretary must conduct a negotiated rulemaking process to develop the
proposed regulations. The Department negotiated in good faith with all
parties with the goal of reaching consensus. The Committee reached
consensus on TRIO but did not reach consensus on the provisions under
Distance Education and R2T4. However, after reviewing the comments
received on the NPRM, the Department has determined not to finalize the
Federal TRIO provisions other than the technical change mentioned
above, to reconsider how best to ensure that the TRIO programs are able
to reach all
[[Page 472]]
populations of disadvantaged students. The Department may consider the
remainder of the Federal TRIO provisions in future rulemaking efforts.
In response to our invitation in the NPRM, 454 parties submitted
comments. We discuss substantive issues under the sections of the
regulations to which they pertain.
VII. Analysis of Public Comment and Changes
In this section, we have grouped issues according to subject, with
appropriate sections of the regulations referenced. We discuss other
substantive issues under the sections of the regulations to which they
pertain. In instances where individual submissions appeared to be
duplicates or near duplicates of comments prepared as part of a write-
in campaign, the Department posted one representative sample comment
along with the total comment count for that campaign to
<a href="http://Regulations.gov">Regulations.gov</a>. We considered these comments along with all other
comments received. In instances where individual submissions were
bundled together (submitted as a single document or packaged together),
the Department posted all the substantive comments included in the
submissions along with the total comment count for that document or
package to <a href="http://Regulations.gov">Regulations.gov</a>. Generally, we do not address minor, non-
substantive changes (such as renumbering paragraphs, adding a word, or
typographical errors). Additionally, we generally do not address
changes recommended by commenters that the statute does not authorize
the Secretary to make or comments pertaining to operational processes.
1. Process for Out-of-Scope Comments
We do not address comments that are out of scope. For purposes of
this NFR, out-of-scope comments are those that are beyond the scope of
the NPRM altogether. Generally, comments that are outside of the scope
of the NPRM are comments that do not discuss the content or impact of
the proposed regulations or the Department's evidence or reasons for
the proposed regulations. Analysis of the comments and of any changes
in the regulations since publication of the NPRM follows.
2. Public Comment Period
Comments: Several commenters argued that the 30-day comment period
denied the public their right to provide adequate comment. These
commenters recommend extending the comment period for an additional 30
days for what they said would be a more comprehensive and thoughtful
review of the proposed rulemaking. A few commenters mentioned that
institutions have several tasks to balance, including challenges
related to the FAFSA simplification rollout, the beginning of the
semester, new regulations, and increased reporting requirements. One
commenter noted that while they understand that a final rule must be
published by November 1 for the rule to take effect the following
academic year, they are frustrated that 30 days has become a routine
timeframe at the Department because it is generally insufficient time
to prepare a response reflective of the regulation's impact. One
commenter stated that there was no reason for the Department to give
this rule a shorter comment period compared to other NPRMs and that
doing so goes against the Administrative Procedure Act. One commenter
asserts that Executive Orders (E.O.) 12866 and 13563 support their
claims of a 30-day comment period being too short. The commenter states
that E.O. 13563 instructs every agency to provide the public with a
meaningful opportunity to comment on a proposed regulation and the
comment period should generally be at least 60 days. The commenter
points out that E.O. 12866 includes similar language.
Discussion: The public comment period is consistent with the
Department's obligations under the Administrative Procedure Act and the
Executive Orders cited by the commenters, and, given the extensive
opportunity for comment provided over the course of the negotiated
rulemaking process, the Department declines the suggestion to extend
the public comment period for another 30 days. Contrary to the
commenter's assertion, the comment period for this NPRM is not shorter
compared to other recent NPRMs, and the Department believes 30 days
gave the public sufficient time to prepare a response to the proposed
regulations. Over 450 individuals and entities commented on the NPRM,
and many provided detailed and lengthy comments. Those comments have
helped the Department identify areas for improvements and clarification
that have resulted in improved final regulations.
Additionally, the negotiated rulemaking process, which began in the
Spring of 2023, provided significantly more opportunity for public
engagement and feedback than standard notice-and-comment rulemaking,
which does not include multiple negotiation sessions. For example:
<bullet> The Department began the rulemaking process by inviting
public input over 3 days of public hearings from April 11-13, 2023; all
who requested to speak were accommodated during the hearings on April
11 and 12, which led the Department to cancel the hearing scheduled for
April 13. We received 60 public comments as part of the public hearing
process.
<bullet> Following the public hearings, the Department sought non-
Federal negotiators for the negotiated rulemaking committee who
represented constituencies that would be affected by our rules. As part
of these non-Federal negotiators' work on the rulemaking committee, the
Department asked that they reach out to their broader constituencies
for feedback during the negotiation process.
<bullet> During each of the three negotiated rulemaking sessions,
we provided opportunities for the public to comment, including after
seeing draft regulatory text, which was available prior to the first,
second, and third sessions. The Department and the non-Federal
negotiators considered those comments to inform further discussion at
the negotiating sessions, and we used the information to create our
proposed rules.
Furthermore, while the Executive Orders cited by the commenter
recommend an appropriate time for public comment, they do not require
more than 30 days, nor do they take into account the significant
additional public input garnered through the mandated negotiated
rulemaking process under the HEA.
Changes: None.
3. Distance Education (Sec. Sec. 600.2, 668.3, 668.41)
General Support
Comments: There were several commenters who supported the
Department's proposed rules on distance education. They cited the
increasing role of distance education in higher education and the
associated need for better measurement of the effectiveness of that
instruction by looking at student outcomes. They agreed that the new
definitions and reporting requirements will make such oversight easier
through the collection of needed data.
Discussion: The Department appreciates the feedback from
commenters.
Changes: None.
General Opposition
Comments: Many commenters expressed concern that the new
regulations would impose an administrative burden on institutions.
[[Page 473]]
Some felt that the proposed rules evinced a bias against distance
education as being of inferior quality to traditional in-person
education.
Discussion: In general, we believe that the administrative burden
will be less than some commenters raised, both due to clarifying some
areas of confusion as well as the decision to not finalize some
proposals that were in the NPRM. The benefit from the remaining burden
is acceptable because it will help the Department in its administration
of the title IV, HEA programs. We provide greater detail on the
provisions that are not being finalized in the relevant sections that
discuss comments related to those provisions.
Changes: None.
Comments: A few commenters suggested the proposed regulations will
stifle innovation in distance education that has occurred in the wake
of the pandemic. The commenters stated that, in their view, the
distance education practices established during that national emergency
are not what prevails now; rather, according to the commenters,
distance education has only improved and is constantly becoming more
rigorous, and therefore the Department should be more restrained in
writing new rules.
Discussion: While the Department agrees that distance education has
continued to expand since the pandemic, we disagree that the final
regulations will hamper its development. Additionally, rather than
limiting innovation and improvement in the distance education sector,
the Department's efforts to improve data-gathering related to distance
education will eventually result in improved research on outcomes for
students enrolled in distance education programs and provide new data
for institutions to use to improve their programs. To the extent this
comment was referring to proposals related to the treatment of
asynchronous clock hours, we note that proposal will not be finalized
but may be addressed through future rulemaking efforts.
Changes: None.
Comments: Some commenters noted that the timeline for
implementation is too short and that institutions will need more time
to be able to incorporate the changes. A couple requested that the
Department set aside the current rulemaking and instead continue with
negotiations on distance education topics with more qualified
negotiators who have sufficient background to adequately advise on and
advocate for distance education.
Discussion: The Department acknowledges commenters' concerns that
additional time will be needed for institutions to adapt their systems
and procedures to implement these new regulations. Since these rules
are being published after November 1, 2024, the effective date will not
be until July 1, 2026, with the provision on distance education
reporting extended to July 1, 2027. This provides the institutions a
full additional year to make any adjustments that are necessary for
implementation than if the rules had been finalized prior to November
1, 2024. Given the approximately 18 months afforded to institutions to
implement these provisions, the Department does not believe further
adjustments to the implementation date are necessary.
We do not agree with the commenters who suggested that the
negotiated rulemaking committee lacked appropriate expertise, and we
decline the suggestion to restart rulemaking with a differently
constituted committee. The primary negotiator from the for-profit
sector has extensive experience in online education and also
participated on the committee for the Distance Education and Innovation
regulations published in 2020. The primary negotiator for school
business officers is from an institution that has robust and well-
regarded distance education coursework and has been offering online
bachelor's degree programs since 2003-2004.\4\ The alternate negotiator
for private nonprofit institutions, who was active during negotiations,
is from a distance learning school that was among the first to offer
online courses in the 2000's.\5\ The primary negotiator for financial
aid administrators is from a college that offers 26 associate degrees
and 34 certificates 100 percent online in a variety of disciplines.\6\
This is only a partial list of negotiators with experience with
distance education. Contrary to the commentor's suggestion, there was
clearly sufficient experience on the panel for negotiators to put forth
informed opinions and suggestions regarding the Department's distance
education proposals.
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\4\ <a href="https://www.usnews.com/education/online-education/marist-college-2765/bachelors">https://www.usnews.com/education/online-education/marist-college-2765/bachelors</a>.
\5\ <a href="https://www.excelsior.edu/about/">https://www.excelsior.edu/about/</a>.
\6\ <a href="https://www.sanjac.edu/programs/online">https://www.sanjac.edu/programs/online</a>.
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Changes: None.
Comments: Commenters contended that various parts of the distance
education provisions violate the Supreme Court's ruling in Loper Bright
Enterprises v. Raimondo, 144 S. Ct. 2244 (2024), which they claim
affirms that agencies are not at liberty to expound via regulation
where the law is already clear.
Discussion: As a general matter, the Department notes that the
Loper Bright decision does not preclude an agency from regulating where
statutory language is clear. Rather, the decision requires an agency's
regulation to be consistent with the plain language and best reading of
an authorizing statute. See, e.g., Loper Bright, 144 S. Ct. at 2266,
2271. As addressed in the specific sections below, the revised
regulations satisfy that standard.
Establishment of Virtual Locations
Comments: Several commenters agreed with the Department's proposed
definition of virtual location in Sec. 600.2 because it will allow for
better tracking and oversight of distance education as well as loan
discharges when a virtual location closes. The commenters indicated
that such oversight would permit comparison of student outcomes in
programs using different modalities within institutions as well as
programs across institutions. One commenter also noted that it may
increase the demand for online education because, the commenter stated,
schools could formally expand and market their virtual campuses and
possibly reduce the operating costs of maintaining physical locations.
Discussion: The Department appreciates the commenters' support.
Changes: None.
Comments: Commenters raised a number of concerns about the new
virtual location definition, including about its scope, the additional
administrative costs of coordination across programs, the impact of the
residency requirement on low-residency programs, and the potential
burden on accreditors to ``visit'' such programs. Others requested
delayed implementation of this provision or delay until other
independent accreditation regulations go into effect. Still others
asserted that the Department did not have the authority to treat a
virtual location as a completely separate entity for purposes of loan
discharge.
Some commenters stated that the data the Department seeks can be
effectively collected through existing reporting systems such as the
National Student Loan Data System (NSLDS) and the Common Origination
and Disbursement (COD) system or the Integrated Postsecondary Education
Data System (IPEDS). The commenters assert that it is redundant and
impractical to redefine a modality as a location.
Discussion: As noted in the NPRM, the Department proposed the
addition of a virtual location because we have
[[Page 474]]
been hampered in the ability to fully understand students'
participation in distance education, account for differences in
outcomes and conduct oversight, accurately measure taxpayer
expenditures on distance education programs, and gauge the success of
such education (89 FR 60256). The Department had initially proposed the
creation of a virtual additional location because we believed that
would accomplish our goals at a lower burden to institutions. Under
this proposal, institutions would report only programs that were fully
distance-based at a single virtual location.
During negotiated rulemaking, the Department agreed to collect
distance education enrollment information for students receiving title
IV, HEA assistance through NSLDS. Non-Federal negotiators believed that
such information would permit a more granular understanding of outcomes
for students enrolled in distance education or correspondence courses.
In considering both the virtual location proposal and the proposal
for NSLDS reporting, we have determined that it is not necessary to
include both proposals. Given the greater support from institutions for
the NSLDS reporting, as well as concerns about potential implications
for site visits and other issues identified above, we have decided to
not move forward with the proposal for a virtual location. We will
instead collect the relevant information through NSLDS. The NSLDS data
collection does not have any effect on closed school loan discharges.
Changes: We have removed the definition of a virtual additional
location from Sec. 600.2.
Asynchronous Instruction and Clock Hours (Definition of ``Clock Hour''
in Sec. 600.2)
Comments: There were several commenters who supported the
Department's proposal to prevent completion of asynchronous distance
education coursework from counting as clock hours in clock-hour
programs, by modifying the definition of ``clock hour'' in Sec. 600.2,
even though this change will remove some options from affected schools
and students. They agreed with the Department's rationale for making
this change. One commenter pointed to how, during the open comment
periods of the negotiated rulemaking sessions, multiple students
testified about using their financial aid to pay for expensive clock-
hour programs that consisted solely of YouTube videos that were free to
the public, with little to no interaction with instructors, and that
none of these students received any hands-on training, typically
required by clock-hour programs, and none of them learned the skills
necessary to succeed in the professions for which they trained.
Discussion: The Department appreciates the support from commenters.
As discussed in the NPRM (89 FR 60259), the Department has heard
similar concerns from students through complaints and in program
reviews.
Changes: None.
Comments: Several commenters suggested that the Department's
proposal exceeds its authority, asserting that it completely removes a
form of education delivery provided in the HEA and ignores the
Department of Education Organization Act (DEOA). Commenters asserted
that the HEA does not give the Department the authority to treat
asynchronous clock- and credit-hour programs differently, and that the
HEA definition of distance education in section 103(7) specifically
allows for this mode of instruction when it states that distance
technologies are ``to support regular and substantive interaction
between the students and the instructor, synchronously or
asynchronously.'' One commenter observed that there is no statutory
distinction between clock- and credit-hour programs in distance
education, that section 481(b)(3) of the HEA (20 U.S.C. 1088) only
requires an ``eligible program'' to have the capability to effectively
deliver distance education, and that section 481(b)(4) of the HEA
acknowledges that an ``eligible program'' can include credit hours or
clock hours. One commenter asserted that the Department's citation of
section 400(b) of the HEA for the broad authority to regulate in this
area is unwarranted, especially in the wake of the Supreme Court's
recent Loper Bright decision, which removed the Chevron deference that
previously was accorded to Federal agencies (section 400(b) of the HEA
states that the Department will ``carry out programs to achieve the
purposes of this part.'') The commenter noted that section 400(b) of
the HEA is about title IV grant and benefit programs, not asynchronous
instruction, and asserted that the Department is trying to assume
authority it no longer has.
Commenters also asserted that the Department did not sufficiently
explain why it reversed the stance it took in the 2020 final rule,
which the commenters believed was the product of rulemaking consensus,
and that the proposed regulation was thus in violation of the
Administrative Procedure Act. One commenter asserted that the 2024
proposed regulation moves backward what the commenter believed was a
consensus position in 2020. Another commenter pointed out that the
Department agreed with the testimonials of commenters in 2020 about the
efficacy of asynchronous delivery and confirmed in the final rule that
it was acceptable. The commenter also asserted that most schools did
not start using asynchronous delivery until 2022, so it is too soon to
determine that it is ineffective.
Discussion: The Loper Bright decision does not prohibit an agency
from regulating; rather, it requires the rules to be consistent with
the plain language and best reading of the authorizing statute.
Congress authorized the Department to promulgate regulations
governing applicable programs and gave the Department broad authority
to carry out the purposes of the various title IV programs. See 20
U.S.C. 1070(b)(HEA section 400(b)); 1082(a)(1)(HEA section 432(a));
1087a(b)(HEA section 451(b)).\7\ Contrary to the commenters' claim,
these general provisions provide the Department the ability to ensure
that any general provisions, such as those related to distance
education, are promulgated fulfill the purpose of the grant and loan
programs, which is to meet the needs of the student beneficiaries.
---------------------------------------------------------------------------
\7\ In outlining its legal authority for the rules set forth in
the NPRM, the Department inadvertently omitted the general authority
provision at 20 USCS 1221e-3, and the general loan provisions at 20
USCS 1082(a)(1), 1087a(b). The Department is rectifying those
omissions here.
---------------------------------------------------------------------------
In defining an eligible title IV program, Congress recognized that
clock hours and credit hours are two separate and distinct forms of
instruction. See 20 U.S.C. 1088(b). While the HEA does not define a
clock hour, the regulatory definition of a clock hour was first adopted
in November 1974 (39 FR 39412). That definition stated that a clock
hour was measured based upon spending 50 to 60 minutes in direct
instruction or in a faculty-supervised learning opportunity such as a
laboratory, shop, or internship. Until 2020, that definition went
largely unchanged except for the inclusion of a definition for
correspondence courses.
The longstanding interpretation of a clock hour also followed the
plain meaning of the term--it is an hour as measured by the 60 minutes
displayed for one rotation of the minute hand on a clock. In contrast,
the concept of a credit hour is based on a combination of both learning
with an instructor and learning outside of the classroom, as
[[Page 475]]
described in the definition of a credit hour in Sec. 600.2.\8\ Nothing
in these regulations affects an institution's ability to offer
asynchronous instruction as part of a credit-hour program.
---------------------------------------------------------------------------
\8\ In these regulations a credit hour is defined as one that
reasonably approximates one hour of ``classroom or direct faculty
instruction'' and two hours of ``out-of-class student work'' per
week, or an equivalent amount of work for other academic activities.
---------------------------------------------------------------------------
The decades-long definition of a clock hour never included the
concept of out-of-class work. It also does not turn on whether a
program is offered virtually. This definition predated the creation of
the internet, and it remained in place for nearly 15 years after fully
online programs were allowed in the title IV HEA programs. Congress
also did not change this interpretation in the last full
reauthorization of the Higher Education Act in 2008.
The distinct nature of clock-hour programs and the Department's
longstanding interpretation of the term must be considered when
interpreting the statutory language providing that distance education
can be provided synchronously or asynchronously. The concepts of credit
hours and clock hours had been well-established for many years when
Congress amended the law to create the definition of ``distance
education'' providing for both synchronous and asynchronous online
education.\10\ There is no reason to believe that Congress intended to
overturn the traditional concept of a clock hour as an hour of
supervised instruction because of the addition of the word
``asynchronous'' in that new definition. At that time, the vast
majority of programs using distance education were offered through
credit hours, especially given the hands-on nature of clock hour
programs. The revised regulation preserves the unique nature of clock-
hour programs and ensures the requirement for 50-60 minutes of
supervised instruction is met. Moreover, there is no statutory
prohibition against treating the two differently for specified
purposes.
In an effort to clarify the definition of a clock hour and allow
for greater innovation in clock-hour programs, the Department included
changes to the definition in negotiated rulemaking in 2019. During
negotiated rulemaking, the Distance Learning and Educational Innovation
subcommittee raised concerns about allowing clock hours to count toward
title IV, HEA eligibility if they did not involve direct synchronous
instruction. The subcommittee specifically noted that asynchronous
clock hours would be more akin to homework, which cannot be counted
toward title IV, HEA eligibility in brick-and-mortar clock-hour
programs, which would create an unfair inconsistency between programs
using different modalities. Commenters are thus mistaken that the
provision in the final 2020 rule was the product of consensus. In fact,
in 2020, the change to asynchronous learning for clock-hour programs
was not part of that consensus language. Rather, consensus was reached
on a version of the rule in which asynchronous clock hours were not
permitted for title IV, HEA purposes, the same principle the Department
proposed in 2024, and that consensus version was in the 2020 NPRM. The
final 2020 rule departed from such consensus in response to public
comments, largely from cosmetology schools. The adoption of this
changed position was not motivated by an underlying change in the
statute. Nor did the final rule include any analysis or research of the
specific innovations that merited the upending of more than four
decades of agency precedent.
In the preamble to those regulations (85 FR 54752), we specifically
noted our continued concern that clock hours offered asynchronously
could be used as a means to complete unsupervised homework. The
Department was attempting to allow for alternative educational
approaches while attempting to maintain the longstanding position that,
aside from correspondence courses, clock hours may only be counted for
coursework that occurs in the classroom or through clinical or hands-on
activities, whereas time spent outside of the classroom with supporting
materials, including reading or passive consumption of videos, cannot
be counted toward a student's title IV, HEA eligibility. See, e.g.,
paragraphs (1)(i) and (ii) of the definition of a clock hour in Sec.
600.2, both of which predate the distance education definition
established in 2020.\9\ Specifically, in the 2020 final rule we stated
that: ``The Department remains concerned about the possibility that
clock hours offered asynchronously could be used as a means to complete
unsupervised homework assignments rather than coursework that otherwise
would have occurred in the classroom, which is prohibited under the
Department's longstanding policy for clock-hour programs'' (85 FR
54742).
---------------------------------------------------------------------------
\9\ <a href="https://www.ecfr.gov/current/title-34/part-600/section-600.2#p-600.2">https://www.ecfr.gov/current/title-34/part-600/section-600.2#p-600.2</a>(Clock%20hour).
---------------------------------------------------------------------------
However, in light of the range of public comments, the Department
revisited this provision in the 2024 NPRM and ultimately has decided to
not finalize it. We will continue to conduct oversight on how
institutions offer any asynchronous clock hour programs and may revisit
this issue at a later date through a future rulemaking effort if we
find continued evidence of widespread problems.
Because we are not finalizing this proposal, the Department
maintains the position taken in 2020 that any distance education clock
hour program delivered in whole or in part through asynchronous methods
must involve regular and substantive interaction with an instructor, as
defined in the definition of ``distance education'' in 34 CFR 600.2.
Ensuring regular and substantive interaction includes continuous and
active monitoring of student academic engagement. Additionally, these
programs cannot count toward a student's title IV, HEA eligibility time
that is more comparable to homework, such as reading or watching
videos, and they must ensure that active engagement occurs during hours
that are included in a student's eligibility. Institutions wishing to
offer asynchronous clock hour programs must ensure they have the
technological solutions in place necessary to make these kinds of
assessments. Failure to do so could result in institutions owing
liabilities to the Department or facing other administrative actions.
If the Department continues to encounter non-compliance with these
requirements, we may propose additional protective or restrictive
measures on clock hours offered asynchronously, or once again propose a
full ban as proposed in the NPRM.
With respect to the assertion that the Department ignored the DEOA,
the commenter did not indicate how or why they felt the DEOA was
ignored, and therefore the Department is unable to respond to that
comment.
Changes: We have removed the changes to Sec. 668.3(b)(2)(ii)(A)
and (B) that would have limited asynchronous coursework that can count
toward an institution's definition of an academic year to coursework
offered in credit-hour programs.
Comments: Multiple commenters asserted that the Department did not
provide sufficient evidence that asynchronous instruction is a problem.
According to the commenters, it was not sufficient for the Department
to rely on its stated experience in program reviews as well as student
complaints when it has not made such documents public. One commenter
went on to state that unspecified and unexplained reasoning does not
satisfy the Supreme Court's standard for an examination of the relevant
data and a reliance upon
[[Page 476]]
factual findings and thus renders the regulation arbitrary and
capricious. Commenters also felt it was overbroad to prohibit all
asynchronous instruction in clock-hour courses and that it was
inaccurate to imply that all synchronous and in-person classes are of
higher quality.
Several commenters suggested there is research (in some instances
providing citations) that demonstrates asynchronous learning is
effective and therefore should be permitted to count as clock hours.
Discussion: As discussed above, the Department has decided to not
finalize the proposed change to prohibit asynchronous clock hour
programs.
In considering the decision to not finalize this provision the
Department reviewed the studies cited by the commenters. We did not
find any of them persuasive in the decision to not finalize this
provision. We found that the studies cited have little to no bearing on
asynchronous clock-hour programs offered by American institutions of
higher education because they focus on international contexts, credit-
hour programs, non-career and technical programs, graduate programs,
comparisons to in-person as opposed to synchronous virtual instruction,
or outcomes that are not tied to learning and course performance. We
acknowledge that the literature on the specific question of the value
of asynchronous clock hours is undeveloped, but that does not justify
comparisons to unrelated contexts. We explain the limitations of
specific studies cited by commenters below.
One study cited by commenters is a meta-analysis of 225 studies
published in 2014.\10\ This study looked at other studies that examined
the benefits of active learning versus lecture settings. However, it
focused on undergraduate instruction in science, technology,
engineering, and mathematics. Those are all historically credit-hour
areas of learning, and there is no attempt in the study or by the
commenters to connect these findings to clock-hour programs. Moreover,
neither the commenters nor the study considers how clock-hour programs
are already designed to be more hands-on than a traditional lecture-
based format. We also note this piece was published prior to the 2020
rule that allowed for the offering of asynchronous learning in clock-
hour programs and was never cited or considered as part of the decision
to make that change, suggesting that its findings are not relevant to
the specific issue at hand here: whether asynchronous learning is
appropriate in clock-hour programs.
---------------------------------------------------------------------------
\10\ <a href="https://pubmed.ncbi.nlm.nih.gov/24821756/">https://pubmed.ncbi.nlm.nih.gov/24821756/</a>.
---------------------------------------------------------------------------
Similar limitations exist for another study cited by
commenters.\11\ This study only considers 27 undergraduate and graduate
students at a university, which has little bearing on clock-hour
programs since they are not offered by this type of institution of
higher education. The study also focuses on student satisfaction
outcomes instead of the more relevant outcomes of student performance
and learning.
---------------------------------------------------------------------------
\11\ A Pilot Study Exploring Interaction and Student
Satisfaction in Asynchronous Courses in Higher Education [verbar]
TechTrends.
---------------------------------------------------------------------------
Commenters also cited a study published in an Iranian medical
journal in 2018.\12\ It looks at students participating in a practical
pathology program for one semester in 2016. It compared traditional
lecture instruction to distance learning. A single semester's results
from a foreign country's medical education is not informative on the
question of whether clock hour programs in a U.S. setting can be
offered asynchronously. Training medical doctors already entails
expectations for significant out-of-class work and addresses a group of
students very different from those generally pursuing clock hours.
---------------------------------------------------------------------------
\12\ <a href="https://www.semanticscholar.org/reader/e12a9dfea127f0d7c287453a848ce2378ed28fdc">https://www.semanticscholar.org/reader/e12a9dfea127f0d7c287453a848ce2378ed28fdc</a>.
---------------------------------------------------------------------------
Issues of comparability appeared in many of the other studies
cited. For example, commenters pointed to a 2020 study looking at
graduate medical education in the wake of the COVID-19 pandemic.\13\
Again, the level of education considered is significantly different
from asynchronous clock-hour programs and already presumes significant
work conducted by students outside of the classroom. It considers
curricular design options for asynchronous learning as well as virtual
learning. The study also notes ``We do not recommend transitioning your
entire curriculum to an asynchronous platform.'' \14\ The study did not
consider any sort of trial to explore potential learning outcomes.
---------------------------------------------------------------------------
\13\ <a href="https://pmc.ncbi.nlm.nih.gov/articles/PMC8043318/pdf/ats-scholar.2020-0046PS.pdf">https://pmc.ncbi.nlm.nih.gov/articles/PMC8043318/pdf/ats-scholar.2020-0046PS.pdf</a>.
\14\ See id.
---------------------------------------------------------------------------
Many other studies cited ran into the same issue of focusing on
instruction in foreign countries that does not appear to be based in
clock hours. Commenters cited a 2021 meta-analysis of 36 studies
published in an Indonesian journal that focused on the teaching of
English as a foreign language.\15\ It considers the relative merits of
synchronous versus asynchronous learning for this specific subject
matter. These are all distinct from what is offered through clock hours
for title IV, HEA funds. While the conclusions are not relevant for the
considerations of this final regulation, the study did find that, for
asynchronous learning, ``[t]he weaknesses involve lack of interaction,
low mastery of content, dull class, connection issues, and network
issues.'' \16\
---------------------------------------------------------------------------
\15\ <a href="https://www.researchgate.net/publication/356349861_BLENDED_ONLINE_LEARNING_COMBINING_THE_STRENGTHS_OF_SYNCHRONOUS_AND_ASYNCHRONOUS_ONLINE_LEARNING_IN_EFL_CONTEXT">https://www.researchgate.net/publication/356349861_BLENDED_ONLINE_LEARNING_COMBINING_THE_STRENGTHS_OF_SYNCHRONOUS_AND_ASYNCHRONOUS_ONLINE_LEARNING_IN_EFL_CONTEXT</a>.
\16\ See id.
---------------------------------------------------------------------------
A 2024 study cited by commenters considering virtual learning for
training dentists in China faced similar issues.\17\ It asked 157
fourth-year students and 54 teachers their opinions on online learning
using a questionnaire. The study found that the ``skill operation
score'' of the students taught with some virtual learning was lower
than that of those taught traditionally, though the difference was not
statistically significant. As with other studies cited, the study
looked at levels of education distinct from what the vast majority of
asynchronous clock hour programs offer in the United States.
---------------------------------------------------------------------------
\17\ <a href="https://link.springer.com/article/10.1186/s12909-024-05171-1">https://link.springer.com/article/10.1186/s12909-024-05171-1</a>.
---------------------------------------------------------------------------
In some cases, the studies cited considered just a single meeting
of a course. For instance, commenters cited a 2024 Taiwanese study that
looked at 170 fourth-year students attending a single dermatology
lecture.\18\ This is again an instance where students are already
expected to conduct significant work out-of-class in a program that in
the United States would be offered in credit hours. A study cited by
commenters of 20 residents or orthopedic surgeons in Mexico taking an
asynchronous course to diagnose ankle fractures has the same
challenge--it is dealing with one lesson given to graduate level
students who already have significant training in the given area.\19\
While a 2019 study cited by commenters did focus on second-year
students, it related to 66 second-year students in an Indian university
who were quizzed on what the authors describe as ``low backache.'' \20\
They looked at pre- and post-test scores on a multiple-choice quiz.
While the Department does not think this study bears on this final
regulation, we do note the authors stated: ``Furthermore, since the
undergraduates are introduced to new topics each day and have huge
[[Page 477]]
syllabi, they may get lost if live interactions are replaced with
asynchronous teaching. There may be a gradual decline in motivation due
to lack of active peer and student-teacher interactions.''
---------------------------------------------------------------------------
\18\ <a href="https://pmc.ncbi.nlm.nih.gov/articles/PMC10960437/">https://pmc.ncbi.nlm.nih.gov/articles/PMC10960437/</a>.
\19\ <a href="https://www.medigraphic.com/pdfs/ortope/or-2023/or232c.pdf">https://www.medigraphic.com/pdfs/ortope/or-2023/or232c.pdf</a>.
\20\ <a href="https://pmc.ncbi.nlm.nih.gov/articles/PMC6477961/">https://pmc.ncbi.nlm.nih.gov/articles/PMC6477961/</a>.
---------------------------------------------------------------------------
None of these studies looks at issues comparable to clock-hour
programs in the United States that are eligible for title IV, HEA
funds. Extending findings from one lecture, quiz, or portion of a
course for a few dozen people in another country does not provide
persuasive evidence to guide the potential awarding of millions if not
billions of dollars in title IV, HEA funds.
Other studies did not involve formal postsecondary environments at
all. Commenters cited a 2022 Argentinian study looking at the content
of just under 300 posts on Facebook discussing diabetes self-care (the
researchers excluded posts ``based only on emoticons/GIFs, such as
clapping hands or smiley faces expressing joy.'') \21\ This kind of
analysis may be useful in the public health context, but it has little
relevance to what criteria formal postsecondary programs should meet to
be supported by taxpayer dollars. Similarly, a 2019 Nigerian study
focused on the use of asynchronous learning to teach word processing
skills to 70 secondary school students.\22\ Again, those types of
skills can be valuable, but they are not relevant to title IV, HEA
programs.
---------------------------------------------------------------------------
\21\ <a href="https://formative.jmir.org/2022/11/e38862">https://formative.jmir.org/2022/11/e38862</a>.
\22\ <a href="https://www.sajournalofeducation.co.za/index.php/saje/article/view/1383/868">https://www.sajournalofeducation.co.za/index.php/saje/article/view/1383/868</a>.
---------------------------------------------------------------------------
The studies cited that appeared in U.S. journals or publications
generally were older, focused on a limited number of people, were only
theoretical, or had some combination of those issues. For instance,
commenters cited a 2008 piece in a quarterly publication from a U.S.
nonprofit focused on the use of technology in higher education.\23\ It
focused on two online seminars of eight and 19 students, respectively.
There are no other specifics provided around the level of postsecondary
program, but the courses were taught by the author who in 2008 was
focused on computer and systems sciences at a university in Sweden.
Again, the comparison is not specific to clock-hour programs, and
focusing on different types of credit-hour experiences fails to
consider the differences between that type of coursework and clock-hour
programs.
---------------------------------------------------------------------------
\23\ http://elearning.fit.hcmup.edu.vn/~longld/
References%20for%20TeachingMethod&EduTechnology%20-
%20Tai%20lieu%20PPDH%20&%20Cong%20Nghe%20Day%20Hoc/(Book)%20-
%20Sach%20tham%20khao%20-%20eLearning/e-Learning%20Concepts/
Asynchronous%20&%20Synchronous%20e-Learning%20(Hrastinski-2008).pdf.
---------------------------------------------------------------------------
A 2004 piece, meanwhile, looked at perceptions of the role of the
instructor in online learning.\24\ This study predates the ability of
institutions to offer fully online courses that are eligible for title
IV, HEA funds. This study looked at courses to help teachers or
administrators with preparing for online learning, with almost two-
thirds of participants holding a master's degree. The age of the study,
the fact that it was focused on professional development for students
already with advanced degrees, and the lack of a connection to clock-
hour programs all make it irrelevant for this final regulation. On a
similarly theoretical basis is a 2009 study raised by commenters that
looked at instructional design strategies.\25\ It also was not used or
cited by the Department in the 2020 policy change despite being
available at that time, which suggests its limited relevance to the
specific issue in both the 2020 and 2024 regulations: the
appropriateness of asynchronous learning in clock-hour programs. Though
more recent, a 2020 article cited by commenters considered how to
handle emergency transitions to online learning due to the pandemic,
without any evaluative component.\26\ Those considerations are not
relevant for the lasting policy change discussed in this final
regulation.
---------------------------------------------------------------------------
\24\ <a href="https://www.ncolr.org/jiol/issues/pdf/3.1.5.pdf">https://www.ncolr.org/jiol/issues/pdf/3.1.5.pdf</a>.
\25\ <a href="https://www.tandfonline.com/doi/epdf/10.1080/08923649409526853?needAccess=true">https://www.tandfonline.com/doi/epdf/10.1080/08923649409526853?needAccess=true</a>.
\26\ <a href="https://er.educause.edu/articles/2020/3/the-difference-between-emergency-remote-teaching-and-online-learning">https://er.educause.edu/articles/2020/3/the-difference-between-emergency-remote-teaching-and-online-learning</a>.
---------------------------------------------------------------------------
The studies presented by commenters thus did not factor into our
decision to not finalize the provision. Our reasons for not finalizing
the provision are discussed elsewhere in this preamble.
Changes: We have removed the changes to Sec. 668.3(b)(2)(ii)(A)
and (B) that would have limited asynchronous coursework that can count
toward an institution's definition of an academic year to coursework
offered in credit-hour programs.
Comments: Commenters did not feel that the two studies cited by the
Department in support of the prohibition on asynchronous clock-hour
learning were valid and relevant. One commenter noted that both studies
occurred when remote learning was imposed during COVID, which the
commenter characterized as an atypical remote learning experience. The
commenter noted that one study was an analysis of another
organization's student satisfaction survey, which, according to the
commenter, addressed student responses to programs that took place
during the time of remote learning due to COVID without a clear
explanation of the educational experience. The commenter stated that it
is not surprising that students forced into emergency remote learning
during COVID would lament the lack of hands-on training, and that this
experience does not reflect the planned online programs that keep tasks
that require hands-on experience intact while using asynchronous
learning only for didactic instruction. The commenter found the second
study unreliable because it also occurred during COVID-era instruction.
While the commenter acknowledged that this study focused on outcomes
and not just student satisfaction, the commenter pointed out that it
was of one class at one institution with only 33 students and that,
according to the commenter, the asynchronous instructional methodology
described in the study does not appear to be typical but rather
something that may have been adapted for emergency remote COVID-era
instruction, which does not represent the student experience in planned
online instruction.
Discussion: As discussed above, the Department has decided to not
finalize the proposal to prevent title IV aid at asynchronous clock-
hour programs. We note the cited studies questioned by commenters were
not the primary basis for the proposal in the NPRM nor the choice to
not finalize this provision. That said, we do agree that the study that
focused on delivering lectures both asynchronously and synchronously
has many of the same issues with the reports cited by commenters--they
focus on graduate-level education in a foreign setting and are thus not
comparable to clock-hour offerings.\27\
---------------------------------------------------------------------------
\27\ <a href="https://journals.lww.com/jehp/fulltext/2021/10000/why_people_are_becoming_addicted_to_social_media_.223.aspx#">https://journals.lww.com/jehp/fulltext/2021/10000/why_people_are_becoming_addicted_to_social_media_.223.aspx#</a>.
---------------------------------------------------------------------------
We note that the findings from student satisfaction surveys in the
other study questioned by commenters highlight student concerns that
they need hands-on training to succeed in certain environments and
often do not receive it. While this survey also does not directly
consider clock-hour programs in synchronous or asynchronous learning
environments, it looks at a U.S. setting and considers types of
workforce training that are more similar to U.S. clock-hour programs.
We will continue to monitor the research in this area as we weigh
options going forward.
Changes: We have removed the changes to Sec. 668.3(b)(2)(ii)(A)
and (B) that would have limited asynchronous coursework that can count
toward an
[[Page 478]]
institution's definition of an academic year to coursework offered in
credit-hour programs.
Comments: Commenters were concerned that removing asynchronous
clock hours could remove flexibility for students who might have
difficulty accessing synchronous instruction, such as those that must
work or care for others, who are in rural areas, and students who
cannot attend school synchronously, including veterans and those
currently in the military. Others were concerned that disallowing
asynchronous clock-hour learning would impact programs addressing
shortage areas, such as nursing, EMT, or public safety.
Others asserted that some asynchronous learning works as well or
better than synchronous learning. One association asserted that its
member schools report higher levels of completion, licensure, and
placement rates in programs using asynchronous distance learning.
Commenters assured that schools are successfully using tracking
technology, which can be very robust in its capabilities to monitor
students, provide them with learning opportunities, and keep them on
track. One commenter asserted that the Department acknowledged in 2020
that adequate technology existed, and it has only improved since then,
and wondered what had changed to cause the Department to change its
mind. One association commenter noted that investments by its members
in the technology for asynchronous education are reported to be as much
as $450,000 to $500,000 per institution and that these investments will
be lost if the rule goes into effect as proposed. The association also
asserted that institutional investments cannot simply be converted to
synchronous learning. Others felt that the Department should have
provided statistics on non-compliance as part of a comprehensive
assessment of asynchronous learning. Commenters asserted that, instead
of harming these institutions that have adequately provided
asynchronous instruction combined with hands-on training as a part of
clock-hour programs, the Department should focus on providing clearer
guidance and standards for non-compliant schools and allow them time to
come into compliance.
Some commenters suggested that, rather than completely removing
asynchronous instruction from clock-hour programs, the Department
should limit asynchronous education to a certain percentage (several
suggested 50 percent) or number of hours of a program (one suggested a
percentage of the programs offered) or to didactic components of
programs. Some commenters noted that many programs offering
asynchronous instruction already limit the amount of the program that
is offered asynchronously or have pared it back since the end of the
COVID pandemic and have gone back to programs that consist primarily of
in-person instruction with a smaller asynchronous component. One
commenter posited that only about half of states have authorized
asynchronous delivery and that in those States it has been limited to
didactic portions and no more than 50 percent of all clock hours. That
commenter suggested that the Department could require schools to
demonstrate that the asynchronous methods are comparable to synchronous
methods on ``student engagement, objectives, effectiveness, and
educational outcomes.''
Some commenters noted that institutions are already required by the
regulations to ensure regular and substantive interaction between
students and faculty and that this is a sufficient check on substandard
instruction. Some asserted that accreditors and State regulators are
tasked with the job of assuring that programs provide adequate
education, and those oversight bodies have accounted for asynchronous
learning with adequate measures, such as by limiting the percentage of
program hours of such learning that can occur. A few suggested that
there be a specialized accreditation or that some existing oversight
mechanism be used, such as the Peer Online Course Review, that would
ensure the quality of asynchronous programs.
One commenter observed that in many States, career and technical
education (CTE) accredited programs offered in clock hours provide the
same content as nearby credit-hour programs but will be negatively
affected solely because of their institutional structure. As a
solution, one commenter suggested not eliminating such asynchronous
education in clock-hour programs but treating it as correspondence
coursework, which offers limited access to title IV, HEA funds.
Multiple commenters asked that the Department delay the
implementation of the modification to the definition of ``clock hour''
in Sec. 600.2, if it proceeds with the regulation change, with one
asking for a delay until at least 2027. Commenters also sought clarity
about the impact of the regulations on students who are already
enrolled in affected programs.
A couple commenters noticed that, by specifying in the definition
of a ``week of instructional time'' in proposed Sec. 668.3(b)(2) that
asynchronous coursework occurs in credit-hour programs, we have,
perhaps inadvertently, prevented direct assessment programs from using
asynchronous coursework.
One community college system commenter anticipated that the
colleges in its system will review their clock-hour programs with the
intention of converting them to credit hours, which will be burdensome.
Discussion: As discussed above, the Department is not finalizing
the provision to prevent asynchronous clock-hour programs from being
eligible for title IV, HEA funds. Because this provision is not being
finalized, the concerns from the commenters are no longer relevant.
Changes: We have removed the changes to Sec. 668.3(b)(2)(ii)(A)
and (B) that would have limited asynchronous coursework that can count
toward an institution's definition of an academic year to coursework
offered in credit-hour programs.
Comments: One community college commenter suggested the Department
should permit clock-hour programs to be offered through distance
education during periods of emergency situations, such as natural
disasters.
Discussion: The Department does permit colleges to offer clock-hour
programs via distance education during a federally declared emergency,
such as a hurricane, fire, or pandemic, and still receive Federal
student aid funding, but certain conditions must be met. For example,
the Department provided guidance allowing institutions to transition
clock-hour programs to distance education during the COVID-19 emergency
under specific temporary waivers.
Changes: None.
Definition of Distance Education Course
Comments: Several commenters supported the definition of a distance
education course as consisting entirely of distance instruction
notwithstanding in-person non-instructional requirements because they
stated it would clarify the scope of such courses, assess their
effectiveness, and ensure consistency across institutions. The
commenters also stated that it would, as noted in the NPRM (89 FR
60262), assist institutions considering when they need to seek
additional accreditor approval for passing the 50 percent threshold for
the number of distance education courses or number of students enrolled
in distance education.
Discussion: The Department appreciates the commenters' support for
[[Page 479]]
provisions we believe will help with consistency and oversight of such
coursework.
Changes: None.
Comments: There were concerns from several commenters that the
addition of a definition of distance education course and other
reporting requirements would create a student unit record system, which
is explicitly proscribed in the HEA.
Discussion: The commenter appears to be referring to section 134 of
the HEA, which prohibits, with certain exceptions, the development of a
database containing personally identifiable information on individuals
receiving title IV Federal financial assistance. Section 134(b)(1) of
the HEA specifically provides an exception for, among others, the title
IV programs, so section 134 is inapplicable to these regulations.
Changes: None.
Comments: A few commenters observed that the proposed definition of
distance education course includes residency experiences, which can
vary greatly in length, or could allow for some in-person instruction.
One commenter asked how long a residency experience could be while
still meeting the new definition; for example, whether an offering
would qualify as a distance education course if there were a single
lecture or two and the balance of the class consists of online work.
The commenter also asked whether there was a threshold for a hybrid
class to be considered a distance education course. The commenter
pointed out that the difference between the IPEDS definition of
distance education course and the one in these regulations is the
residency experience, and inquired as to how the Department would
reconcile the two definitions. Another commenter asked that the
Department add clarity pertaining to clinical rotations, which often
occur away from the school's campus. The commenter stated, for example,
that students complete some of their requirements virtually for the
didactic components of the course but receive in-person instruction
from preceptors during the hands-on part of their rotation; the
commenter asserted that such rotations should not count as distance
education courses. One commenter suggested that the definition of
distance education course be further separated, such as by
distinguishing between synchronous and asynchronous instruction.
Discussion: We have removed the phrase ``residency experiences''
from the definition of a distance education course, in part due to the
concerns expressed by commenters regarding the inconsistency of this
definition with the IPEDS definition and the complexity created by an
undefined period for in-person coursework that could be included in a
particular class. This resolves most of the concerns presented by the
commenters.
Regarding clinical rotations, if the hands-on portions count as
essential parts of a course, such a course would not fall under the
definition, but if no required part of a course is in-person, the
course would fall under the definition of distance education. For
example, if a student in a medical rotation takes one class that
involved the actual praxis part of the rotation as well as one virtual
class in biology that has no in-person component, the student is
enrolled in one class that is not a distance education course (praxis)
and one that is (biology). Also, hybrid courses in which any portion is
in-person instruction, no matter how small, would not be distance
education courses. Finally, there is no plan to distinguish between
types of distance education courses because we believe that the
categorization as proposed is sufficient.
Changes: The phrase ``residency experiences'' has been removed from
the definition of distance education course.
Comments: Some commenters stated that the proposed addition of
distance education course inaccurately characterizes residency
experiences as non-instructional, but not only are residency
experiences instructional and allow students to apply knowledge from
their coursework, they are sometimes required to satisfy accreditation
and state licensure standards. The commenter noted that during
negotiations the Department supported moving the phrase ``residency
experiences'' before ``non-instructional'' in the definition, but it
did not do so in the NPRM.
Discussion: We agree with the commenter. However, as described
above, we have eliminated the phrase ``residency experiences'' from the
definition of distance education course.
Changes: The phrase ``residency experiences'' has been removed from
the definition of distance education course.
Comments: Several commenters were concerned that the Department's
proposed definition of a distance education course might not align with
other definitions used by institutions and that the Department's
changes may prompt unwarranted regulatory scrutiny of distance
education programs. They suggested that any amended definitions or new
reporting requirements should consistently promote strong student
outcomes across all modalities of learning.
Discussion: The Department considers the new definitions to be
straightforward and disagrees that they will cause undue and
unspecified regulatory misalignment or scrutiny of distance education
programs. To the contrary, the changes will instead facilitate what the
commenters are seeking: stronger student outcomes across all modalities
of learning by providing necessary information pertaining to those
modalities.
Changes: None.
Comments: One commenter felt that the Department's definition of
distance education course conflicted with section 484(l)(1)(A) of the
HEA. Specifically, the commenter asserted that there was a conflict
between the HEA, which considers distance education to include courses
offered ``principally'' through distance education, and the
Department's proposed definition, which restricts the definition to
courses offered ``exclusively'' through distance education.
Discussion: The commenter appears to have misunderstood the meaning
of section 484(l)(1)(A) of the HEA. The two cited provisions serve
different functions and are not in conflict. Unlike the regulation at
issue here in Sec. 600.2, the statutory text does not, and is not
intended to, define distance education. Instead, it is designed to
determine who is enrolled in correspondence courses, stating that a
student in a ``course of instruction'' leading to a degree or
certificate that occurs principally via distance education must not be
considered enrolled in correspondence courses.
Changes: None.
Reporting Enrollment in Distance Education or Correspondence Courses
(Sec. 668.41)
Comments: There were several commenters who supported the
Department's intention to gather the enrollment status of students,
whether they are fully in-person, fully online, or in a hybrid
situation. They agreed with the Department that this will be useful
data for better understanding the effectiveness of the instruction
modalities and appreciated the extended time (which will be delayed
further, until July 1, 2027) for implementation of this reporting.
Discussion: The Department thanks those commenters for their
support.
Changes: None.
Comments: Numerous commenters thought that the collection of
student
[[Page 480]]
enrollment status would add too much burden on schools. In addition,
the commenters indicated that some schools already collect data
pertaining to how instruction is carried out, so the new requirement
would be redundant for them. Commenters asserted that because students
so often engage in different modalities, including within a term,
collection of such data will be difficult and will lack utility. They
queried how a student who is enrolled in 100% distance education
courses in one semester and 100% in-person the following semester would
be reported, and they asserted that, since the Department already
collects distance education information via IPEDS, it should use that
for its proposed purposes rather than add unnecessary requirements.
Some predicted that while the Department is ostensibly only asking for
limited enrollment information about students, this could lead to
broader, more burdensome requests for data. Some expected that the
proposal would entail the Department creating an ad hoc portal or a
costly system for reporting the information, which would require more
personnel by schools, and would be a problem for the Department and
schools to implement. One group of schools estimated that the data
reporting would cost approximately $2 million for some of its colleges
and requested that the requirement be delayed until 2027. One commenter
suggested that the topic be discussed in further negotiations with
negotiators who have the necessary experience.
Discussion: While individual institutions might collect such data,
the new reporting will allow the Department to gather such data from
all schools participating in the title IV, HEA programs. At least one
commenter who supported the proposed change felt that institutions that
do not already track and evaluate this data by modality will benefit
from collecting and analyzing this data, which will help inform
institutional decision-making about program offerings, allocation of
resources, and selection of outside partners to develop and operate
online programs. And as noted in the NPRM (89 FR 60263), although this
will increase burden for institutions by requiring them to report an
additional layer of enrollment information, we do not anticipate that
this additional datum about a student's enrollment status will cause
undue burden or require that institutions have to implement new systems
of reporting because the Department is incorporating the change into
its existing enrollment reporting process in NSLDS. As to the choices
students make with regard to modality, the reporting will capture that,
whether they are enrolled in classes that offer mixed modality or those
that are purely distance or in-person education, without the
complication commenters envision. A student who is enrolled in 100%
distance education courses in one semester and 100% in-person courses
the following semester would be reported as distance education the
first semester and in-person in the second. A student who is enrolled
in even one class that allows for distance education, attending
remotely as the student chooses throughout the semester for example,
would be in a hybrid status. The IPEDS information collection does not
provide student-level data and is therefore not sufficient for the
Department's intended purposes. Also, the Department proposed only the
stated request for student enrollment in distance education and
correspondence courses, as requested by negotiators and institutions
during negotiations. Any additional mandates for data would need to be
negotiated in future rulemaking sessions and would be subject to public
comment. Finally, we expect to incorporate the reporting of this
information into an existing data stream; no additional portal or
interface between schools and the Department will be needed, and the
cost for such reporting will not be in the millions of dollars. In the
interest of allowing institutions ample time for implementation, we
have decided to delay this reporting requirement until 2027.
Changes: Institutions will not be required to report this
information until July 1, 2027.
Comments: Some commenters suggested it would be unfair to compare
distance education data with in-person instruction data because such a
comparison would fail to account for differences in the student
populations attending different modalities. The commenters felt that
outcomes will be different for the distance education student
population, which, they state, generally has less time and flexibility
to devote to school.
Discussion: It is unclear from the comments whether the commenters
are opposed to the collection of data or are concerned about the use of
the data after collection. To the extent that the commenters are
opposing the collection of the data because there may be differences in
the demographics, life circumstances, and outcomes of students enrolled
in distance education versus those enrolled in in-person instruction,
the Department disagrees that those potential differences should
prevent the Department from collecting this important data. As set
forth in the NPRM (89 FR 60263), the reporting provision was added at
the request of negotiators and was intended to provide the Department
and institutions, students, and the public expanded information
necessary to make informed decisions when developing policies regarding
distance education and to provide students additional information for
enrollment choices. The concerns raised by the commenters regarding the
differences in demographics of distance education students does not
negate the need for the collection of the data.
With respect to the use after collection, the Department would not
evaluate information about distance education in a vacuum. The
Department maintains other data about recipients of title IV, HEA
funds--such as their age, family size, marital status, employment
status, and high school completion status, as well as whether students
have dependents they are supporting. These factors would also be taken
into account when developing policies around distance education.
Although the Department cannot speak to how institutions will use the
distance education data, it can note that during negotiations
institutional representatives voiced a desire for the information in
order to better develop distance education courses that meet student
needs. It is the Department's belief that all parties--the Department,
Congress, researchers, institutions, students, and the general public--
can benefit when they have program outcome data by modality when making
decisions.
Changes: None.
Comments: Several commenters pointed out that there is often no
sharp distinction between distance and in-person education, that
students often enroll in both at the same time, that such enrollment
will be difficult to track, and that trying to make distinctions in
such a blended environment will, in their view, lead to inaccurate
assessments of students and programs. The commenters asserted that
flexible instructional modality is beneficial to students because it
allows them to enroll in coursework in the way that is most
advantageous to them and singling out 100% distance education for
tracking could create unintended consequences due to a false binary
approach and be misleading at a time when the interaction between
distance and in-person instruction is becoming more varied.
Discussion: Regarding commenters' concerns that the proposed data
[[Page 481]]
requirements may be difficult to implement, given that some students
enroll in courses offered in several different modalities, the
Department notes that the level of detail required by Sec. 668.41(h)
of the final regulations was added in response to specific requests
from non-Federal negotiators. The Department altered its proposed
regulations during negotiated rulemaking to require institutions to
report students' enrollment in distance, in-person, or hybrid
education, in addition to requiring the reporting of virtual locations.
The Department ultimately agreed with non-Federal negotiators that the
benefits of collecting such additional data outweighed the costs and
burdens for institutions.
The Department disagrees with the commenters who suggested that the
data on distance education and correspondence course enrollment is
misleading or creates a ``false binary'' approach. In fact, the
Department accounts for the fact that students will be enrolled in
various education modalities: in-person, distance, and hybrid. The
changes will allow us to gather information on each modality and
distinguish between them. The new information will not prohibit schools
from combining and using the modalities as they currently do.
The Department also asserts that programs offered entirely or
nearly entirely using distance education or correspondence courses have
several unique characteristics that distinguish them from other
programs, including the ability to enroll students from a significantly
larger geographic area and a necessarily greater reliance on technology
as the medium for instruction and coursework. These characteristics
merit analyzing fully online programs separate from other types of
programs.
Changes: None.
Comments: Some commenters remarked that combining distance
education with correspondence coursework would not allow for accurate
assessments given that these are distinct and separately regulated
modalities. The commenters felt that data from the two should be
separately collected. One suggested the following alternative
regulatory language: ``For each recipient of title IV, HEA assistance
at the institution, the institution must report to the Secretary, in
accordance with procedures established by the Secretary, the
recipient's enrollment status as exclusively through distance
education, exclusively through in-person instruction, or through a mix
of distance education and in-person instruction. The procedures
established by the Secretary will distinguish between enrollment in
distance education and enrollment in correspondence courses.'' Another
commenter opined that the E-App system (which schools use to apply for
designation as eligible title IV institutions and for recertification)
is not designed for such reporting and should not be used for it.
Discussion: As noted in the NPRM (89 FR 60286), the system details
for the reporting requirement we are establishing in Sec. 668.41 will
be clarified in future guidance and instructions, but we do anticipate
distinguishing between the two modalities of distance education and
correspondence courses to allow for a comparison between them. We thus
decline as unnecessary the commenter's suggested alternative language.
Also, unlike the virtual location requirement described elsewhere, we
do not expect the E-App to be involved in this reporting process.
Changes: None.
Comments: A commenter suggested that the details of this reporting
under Sec. 668.41 should be at the student level, not at the course
level. Currently enrollment reporting is done at the student and
program level by campus via NSLDS, and, according to the commenter,
continuing with this method would be the most efficient and effective
way of reporting. This reporting occurs every 60 days, which schools
are already required to follow and, according to the commenter, this
should be frequent enough. The commenter noted that adding one field to
the existing NSLDS enrollment reporting process would be efficient and
not burdensome.
Discussion: While the Department has not yet determined the details
of this reporting, we agree that the process described by the commenter
appears to be an efficient method of implementing the reporting
requirement and anticipate that the Department likely will adopt a
process similar to the one described. We also agree that reporting
should occur at the student level and will not be collecting data at
the course level.
Changes: None.
Comments: One commenter suggested expanding the proposed status
reporting categories in Sec. 668.41 from three to four: fully in-
person, and at a distance, as proposed, but then splitting hybrid
status into majority distance and majority in-person.
Discussion: The Department believes that the three enrollment
statuses will allow for easy classification of students and will
provide adequate information for the intended purposes, so the
Department does not currently plan to expand that number to four.
Changes: None.
Comments: One commenter asked how often the new reporting will
occur and what students will be involved.
Discussion: Modality of instruction will be reported for all
students on whom the institution would otherwise be required to report
enrollment. The Department intends to align the frequency of this
reporting (though that has not yet been determined) with other existing
reporting requirements, such as occurring every 60 days, which as noted
above is already the interval for NSLDS enrollment reporting.
Changes: None.
4. Treatment of Title IV Funds When a Student Never Attends or Attends
and Then Withdraws/Return of Title IV Funds (R2T4) (Sec. Sec. 668.21
and 668.22 )
General Support
Comments: Many commenters offered support for the Department's
proposed regulations regarding the requirements applicable to the
return of title IV, HEA funds (R2T4). Several of these commenters noted
the rules received broad support during negotiated rulemaking and the
regulations will result in better stewardship of taxpayer funds and the
integrity of the title IV, HEA programs. As one commenter noted, the
regulations collectively are logical and reasonable measures to ensure
accuracy of R2T4 calculations.
Many commenters agreed the regulations will simplify the R2T4
process for institutions and provide positive benefits to their campus
community. One commenter noted the R2T4 regulations are so complex for
institutions to navigate that the regulations are consistently in the
Department's top annual compliance findings. One commenter noted that
simplification of R2T4 calculations will encourage students to re-
enroll and reduce the burden on financial aid offices when supporting
those students' re-engagement. Another commenter states the
Department's proposal is an important step in modernizing financial aid
policies to reflect the growing prevalence and success of distance
education.
Many commenters agreed the proposed changes will benefit students,
including incarcerated individuals and student loan borrowers. Several
of these commenters noted allowing students to repay Direct Loan funds
owed to the Department after withdrawing or not beginning attendance
through the terms of their Master Promissory Note better recognizes the
financial realities these
[[Page 482]]
students face. Several commenters noted these borrowers often cannot
pay the full amount owed immediately and faced penalties such as
negative credit reporting and collections. Some of these commenters
believe the proposed rules would incentivize institutions to
voluntarily institute refund policies that will reduce the
institutions' burden in performing R2T4 calculations, while at the same
time making it easier for students to re-enroll in the future by
reducing unpaid debts owed to either the institution or the Federal
government. One commenter noted these changes will support student
success regardless of their financial situation or academic challenges.
Some commenters supported changes that ensure fewer opportunities
for institutions to retain title IV, HEA funds to which they are not
entitled. One commenter noted attendance-taking requirements for the
purposes of R2T4 for courses offered entirely through distance
education will better support accurate withdrawal dates.
Discussion: We thank the many commenters for their support. We
believe these final regulations will reduce burden on institutions and
students while also providing reasonable and appropriate safeguards for
taxpayer dollars. As explained in greater detail below, we have decided
not to move forward with two proposals from the NRPM in this area.
Changes: None.
General Opposition
Comments: One commenter stated that the Department has not taken
into account the U.S. Supreme Court's 2024 Loper Bright decision,
which, according to the commenter, eliminated Chevron deference and
discontinued judges' ability to defer to Federal agency interpretations
of the statutes they enforce.
Discussion: These regulations do not run afoul of Loper Bright. The
NPRM highlighted our direct statutory authority to make the regulatory
changes, in section V--Authority for This Regulatory Action (89 FR
60258), and these regulations reflect the best reading of the plain
text of that authority. We also note that, to the extent this comment
was focused on concerns about the proposed changes to attendance taking
requirements for distance education courses or the treatment of student
aid funds if the recipient does not begin attendance at the
institution, the Department has decided to not move forward with those
proposals at this time. The final regulations thus increase the
accuracy and simplicity of performing R2T4 calculations for
institutions, address unique circumstances for what constitutes a
withdrawal, and codify longstanding policies into regulation.
Changes: None.
Comments: Some commenters stated that the proposed changes to the
R2T4 regulations may lead to stringent and inflexible institutional
refund policies, which could disproportionately affect low-income and
vulnerable students, making it more difficult for them to re-enroll and
complete their education.
Discussion: The Department disagrees that the regulations will lead
to more stringent and inflexible institutional refund policies that
will harm students. In fact, the Department's focus for many of the
changes was to provide flexibilities that would benefit students. For
example, the Department provided flexibility to institutions to
consider a student who stops attending very early in a term as never
attending which would require the institution to refund charges and
cancel any balances owed. Additionally, the leave of absence allowance
for eligible prison education programs (PEPs) will offer greater
flexibility to confined or incarcerated individuals when they are
impacted by a situation in the correctional facility outside of their
control. Lastly, as described elsewhere, the Department has decided to
not finalize the requirement for institutions to take attendance in
distance education courses, which was the primary source of concern for
many commenters.
Changes: None.
Comments: Some commenters argued that the proposed R2T4 rules could
force institutions to hire additional staff to manage the increased
documentation and compliance workload and that institutional resources
will be redirected from student support services to administration and
data collection.
Discussion: We do not believe that the R2T4 regulatory changes will
require significant institutional staffing changes or a redirection of
substantial institutional resources from student services to
administrative services. In fact, the regulations are designed to
improve and simplify the process in some areas. For example, the
changes to the R2T4 calculation for modules will eliminate the need for
institutions to consider which types of aid a student received to
determine the number of days in the R2T4 calculation. Additionally, the
new R2T4 exemption for students who are treated as never having
enrolled will reduce the number of R2T4 calculations that are performed
at some institutions. Finally, we note that to the extent the comments
were addressing potential increased costs to implement the proposal
requiring attendance taking in distance education courses, that
provision is not being finalized. Institutions will thus not face any
costs related to that provision.
Changes: The Department is not finalizing the proposal for
attendance taking in distance education courses.
Comments: One commenter recommended that the Department not move
forward with any of the changes and instead exempt any postsecondary
institution from R2T4 that qualifies for Title III or Title V waivers,
or if the institution is designated as a Minority Serving Institution.
The commenter believes that their proposal would provide flexibility to
utilize resources differently to marginalized populations.
Discussion: The Department lacks the statutory authority to exempt
all or a subset of postsecondary institutions that participate in the
title IV, HEA programs from the R2T4 requirements.
Changes: None.
Comments: One commenter asked that the Department delay
implementation of these regulations until 2026 or 2027 to allow
institutions time to work on internal systems, third party vendors, and
administrative reporting mechanisms, train instructors, and make other
logistical changes.
Discussion: The regulations will not be effective until July 1,
2026. We believe that provides sufficient time to make necessary
adjustments.
Changes: None.
Comments: One commenter stated that the proposed changes will
disrupt the timely delivery of title IV, HEA funding to all students.
The commenter stated that institutions will break up disbursements as
students' progress through the term to avoid overpayments, and that
multiple disbursements hinder students from using their title IV, HEA
credit balances for educationally related expenses such as housing and
food, which are benefits that are intended to be available to students
under current regulations.
Discussion: We appreciate the commenter's concern for students.
However, nothing in this regulation requires an institution to break up
a disbursement into smaller payments. That is simply an allowable
option if the institution determines it best meets the needs of the
students. Further, we do not believe that these regulations create any
additional incentive for institutions to adopt that approach, primarily
because the amount of effort needed to shift to a multiple disbursement
model would significantly outweigh the increase in burden imposed by
these regulations. This is especially true because, although shifting
to such a
[[Page 483]]
model might reduce the frequency of returns under the R2T4 regulations,
it will not obviate the need to amend R2T4 policies and procedures in
accordance with these new regulations. The regulations will still apply
to all students who cease attendance during a payment period or period
of enrollment even if a school makes multiple disbursements during a
payment period.
Changes: None.
Comments: One commenter asked for the official definition of
attendance for R2T4 purposes.
Discussion: For R2T4 purposes, under Sec. 668.22(l)(7), ``academic
attendance'' and ``attendance at an academically related activity''
must include ``academic engagement,'' as defined in Sec. 600.2.
Treatment of Title IV Grant and Loan Funds if the Recipient Does Not
Begin Attendance at the Institution (Sec. 668.21)
Comments: The Department received many comments supporting the
proposal in Sec. 668.21(a)(2)(ii) to allow a student who received a
loan disbursement as part of a title IV credit balance, but never began
attendance in a payment period or period of enrollment, to repay loan
funds they received under the terms and conditions of their promissory
note. Many commenters agreed the proposed changes better recognize the
financial realities these students face. Several commenters noted the
proposed rules will prevent borrowers from defaulting on their debts,
as these borrowers often cannot pay the full amount owed immediately
and would face penalties, such as negative credit reporting and
collections. Others noted the proposed changes will help students who
have likely already spent their credit balances on things like housing,
childcare and other necessary expenses and therefore cannot make a lump
sum payment. Others agreed the changes would strengthen the borrower's
financial health and could have positive economic impacts.
Discussion: We thank the commenters for their support. However, as
explained below, we have decided to not move forward with this
proposal.
Changes: None.
Comments: A few commenters stated that the rule will allow abuse
because a borrower could have their loans forgiven under Public Service
Loan Forgiveness (PSLF) or forgiven as a possible result of enrolling
in an Income Driven Repayment (IDR) plan after having never
participated in any postsecondary coursework. One commenter stated that
the Department is creating a ``perverse incentive'' that will encourage
individuals to enroll in a program only to receive a credit balance,
subsequently withdraw, and then allow them to pay the loan back over
the course of many years.
One of the dissenting commenters offered several alternative
solutions other than eliminating the proposed regulation: (1) the
Department require that postsecondary institutions return all of the
title IV, HEA funds for a period of non-attendance, and (2) require a
30-day delay in any subsequent disbursements to the borrower if the
borrower seeks to enroll at a different institution.
Another alternative offered by a commenter is for the student to
repay, upon demand, all funds except those already spent on necessary
education-related expenses, which could be repaid under the terms and
conditions of the promissory note or during a shortened yet adequate
period of time.
Discussion: In the Department's experience through interactions
with institutions and program reviews, individuals seeking to abuse the
title IV, HEA programs overwhelmingly target grant programs rather than
loan programs. However, we do not want to create the perception of
possible loopholes in the Federal aid programs. Accordingly, we will
not move forward with this change at this point. The Department will
continue to look carefully at the individuals who do not begin
attendance to determine whether revisiting this policy in the future
may be merited.
Regarding the alternate proposals, we believe adding a requirement
that a postsecondary institution return all of the title IV, HEA funds
for a period of non-attendance by a student is unreasonably burdensome.
We also decline to incorporate a 30-day delay on subsequent
disbursements to a student that sought to reenroll. The Department is
not making changes to disbursement rules with these final regulations.
Regarding the final alternative offered by the commenters,
requiring a student to immediately repay all funds except those already
spent on necessary education-related expenses, the HEA requires that a
student spend all of their title IV credit balance funds on allowable
education related expenses. If this alternative, as suggested by the
commenter, were implemented, institutions would be obligated to
document the exact amount of funds a student spent, and categorize that
spending, to determine compliance with the requirement. The additional
burden placed on institutions to determine how the title IV, HEA credit
balance funds were spent would be extensive and unreasonable.
Changes: We have removed the proposed changes to Sec. 668.21 to
allow a student who received a loan disbursement as part of a title IV
credit balance, but never began attendance in a payment period or
period of enrollment, to repay loan funds they received under the terms
of their promissory note.
Comments: One commenter requested that, in light of the new
regulatory language, the Department update the language on the
promissory note, which currently requires a student to agree to
immediately repay any loan money that is not used for authorized
educational expenses. The commenter also asked how to determine that a
student ceased to be enrolled half-time if they never began attendance.
That commenter, and others, questioned the validity of providing a
grace period for individuals who do not begin attendance, and suggested
that the students should be required to request a forbearance. The
commenter believes that allowing the borrower to retain funds for six
months may do the borrower harm by encouraging the borrower to spend
the funds.
One commenter believes that by not attending, the student broke
their contract with the Department, and therefore, the Department
should not maintain the broken contract through the terms of the
promissory note. Another commenter similarly stated that the Department
should not allow students to borrow without ever having attended and
that this change could reduce resources available to fund other
students' educations.
Discussion: As described above, the Department is not moving
forward with this proposal. However, we note that under Sec.
668.164(i)(1), the regulations intentionally permit the disbursement of
loans up to 10 days prior to the start of classes to allow students to
cover necessary education expenses, such as housing and books. The
Department's longstanding position is that this policy is necessary so
that students are fully prepared for the start of their programs.
Permitting these disbursements does not reduce the amount of funding
available to fund other students' educations, because the HEA dictates
the amount of title IV, HEA loan funds available to students on an
individual basis, without a cap on the total amount that can be lent
across all students, and the amount of loans received by one student
does not affect the amounts a different student can receive.
Changes: We have removed the proposed changes to Sec. 668.21 to
allow
[[Page 484]]
a student who received a loan disbursement as part of a title IV credit
balance, but never began attendance in a payment period or period of
enrollment, to repay loan funds they received under the terms of their
promissory note.
Comments: One commenter stated that institutions must already
confirm attendance before making loan disbursements.
Discussion: We remind the commenter that under Sec. 668.164(i)(1),
in certain situations, a postsecondary institution may be able to make
an early disbursement of title IV, HEA aid up to 10 days before the
first day of classes of a payment period and there would be no
confirmation of attendance at that time. Ultimately, institutions must
confirm attendance for students to retain eligibility for some or all
of the title IV, HEA funds they received during the payment period, but
attendance confirmation does not have to occur prior to this initial
disbursement.
Changes: None.
Treatment of Title IV Funds When a Student Withdraws (Sec. 668.22)
Withdrawal Exemption (Sec. 668.22(a)(2)(ii)(A)(6))
Comments: Several commenters supported the optional withdrawal
exemption under Sec. 668.22(a)(2)(ii)(A)(6), stating that it will
reduce administrative burden and prevent unnecessary financial
penalties on students who withdraw early. Commenters also stated that
it will decrease the institutional cost and complexity of compliance
with title IV regulations, and it may also encourage institutions to
adopt generous refund policies which will help students maintain
financial stability.
Discussion: We thank the commenters for their support.
Changes: None.
Comments: One commenter asked how a student granted a withdrawal
exemption be reflected in enrollment reporting, particularly regarding
medical withdrawals. The commenter noted that often requests for
medical withdrawals are granted late in the semester or well after the
semester is over, and this likely means the student will already have
been reported as being in attendance at least half-time. Where the
school grants the medical withdrawal, the commenter sought
clarification on how this ``non-withdrawal'' would be reported to
NSLDS.
Discussion: The Department will issue guidance regarding the
procedure for reporting students, who have been granted the withdrawal
exemption in Sec. 668.22(a)(2)(ii)(A)(6), to NSLDS as part of
enrollment reporting. We will provide guidance on reporting statuses,
reporting requirements, and any applicable dates (such as grace period
dates) following the publication of these regulations.
Please note that, for institutions that utilize the withdrawal
exemption, borrowers will be treated as having never attended and the
grace period will begin the day after the last date of attendance in
the prior payment period.
Changes: None.
Comments: One commenter stated that many community colleges cannot
afford to implement the optional withdrawal exemption. The commenter
offered several examples, including that most community colleges do not
offer housing and have low tuition; therefore, many students receive
larger title IV, HEA credit balances. The commenter stated that a
community college would not be able to write off large amounts for
multiple students.
Discussion: We reiterate that the withdrawal exemption is optional.
This will permit institutions that wish to maintain or create generous
tuition refund policies to be exempt from performing an R2T4
calculation in cases where students are made financially whole after
withdrawing. Use of these generous tuition refund policies will be at
the discretion of the institution. The Department hopes that the
reduced burden resulting from this exemption from the R2T4 process
encourages institutions to maintain or create these policies for their
students.
Changes: None.
Comments: One commenter asked whether the optional withdrawal
exemption could be applied on a case-by-case basis or whether
institutions that choose to implement the withdrawal exemption must
apply it to all students who withdraw. The commenter also expressed
concern about the requirement that ``the institution's records treat a
student as having never attended courses for that payment period or
period of enrollment.'' The commenter stated that their institution
wants to retain a record of course attendance to justify title IV, HEA
disbursements that were made during the payment period or period of
enrollment.
Discussion: Institutions can implement the withdrawal exemption on
a case-by-case basis according to the institution's policy. We agree
with the commenter that an institution must keep a record of a
student's eligibility to receive title IV, HEA funds. Additionally, the
institution must document the use of the withdrawal exemption for a
particular student. The regulations do not require an institution to
eliminate all record of a student's attendance for a payment period in
which they qualify for this exemption. Instead, they require the
institution to document that the institution's policies treat the
student similarly to other students who did not attend, for example
with regard to satisfactory academic progress or grading policies.
Changes: None.
Comments: A few commenters recommended that under paragraph Sec.
668.22(a)(2)(ii)(A)(6)(iv) the Department change ``current year'' to
``payment period.'' The commenters noted that paragraphs (i)-(iii) of
the withdrawal exemption are tied to the payment period or period of
enrollment, while provision (iv) is not.
Discussion: The Department is persuaded by the commenters' argument
that the various subsections should contain identical language since
that was the intended purpose of the regulatory change.
Changes: We have updated Sec. 668.22(a)(2)(ii)(A)(6)(iv) to
replace ``any current year balance'' with ``any payment period or
period of enrollment balance'' owed by the student to the institution
due to the institution's returning of title IV, HEA funds to the
Department.
Comments: One commenter requested that the regulation define
institutional charges as exclusive of institutional housing and meals
based on a direct proration of use for the payment period. The
commenter stated that while tuition refund policies are under the
institution's purview, additional charges for the use of services such
as housing are considered auxiliary and not at the discretion of the
central campus to limit or control. Further, it places students who
live in institutionally owned housing at a disadvantage as compared to
students who may rent from a private third party. Though both are
incurring living costs, the latter would be permitted the flexibility,
assuming the campus reverses or writes off all other institutional
charges, whereas the former would require an R2T4 calculation resulting
in an outstanding debt.
Discussion: We decline to take the commenter's suggestion. We
acknowledge that students with institutionally provided food and
housing may be treated differently from students with non-
institutionally provided food and housing. Students without
institutionally provided housing and food are more likely to have
larger credit balances, which will make this a more challenging
[[Page 485]]
requirement for some institutions, since the provision in (iv) requires
that the institution not recoup or collect any title IV, HEA funds
returned to the Department due to the implementation of this exemption.
This exemption is an optional exemption to be used by institutions when
they determine it is advantageous to do so. Further, we believe the
commenter may have misinterpreted the optional withdrawal exemption. An
R2T4 calculation is not required if the exemption is applied, since all
title IV, HEA funds are returned in that instance.
We will amend the proposed regulation to clarify that this
requirement includes title IV, HEA funds that were provided to the
student or parent, that were disbursed for that payment period or
period of enrollment.
Changes: We amended Sec. 668.22(a)(2)(ii)(A)(6)(ii) to state that
``The institution returns all the title IV grant or loan assistance,
including all title IV credit balances provided to the student or
parent, that were disbursed for that payment period or period of
enrollment.''
Comments: One commenter asked the Department to extend the current
withdrawal exemption for graduates/completers to students that are not
enrolled in programs offered in modules.
Discussion: Currently a student meets the withdrawal exemption for
graduates/completers in Sec. 668.22(a)(2)(ii)(A)(1) if they complete
all of the academic requirements for their program and are able to
graduate before completing all of the days or clock hours in the period
they were scheduled to complete. This withdrawal exemption can apply to
any type of program, including those with or without modules. Since the
exemption that the commenter suggests already applies to non-modular
programs, the Department declines the proposed revision as unnecessary.
Changes: None.
Comments: One commenter stated that R2T4 calculations are for
students who officially or unofficially fully withdraw. The commenter
asserted that, if the student does not begin attendance, their aid must
be cancelled for that course.
Discussion: It appears the commenter is not differentiating between
students who may be eligible for the exemption described in Sec.
668.22(a)(6) and are treated as if they never enrolled versus students
who never begin attendance in any class (Sec. 668.21). We remind the
commenter that Sec. 668.22(a)(6) is an exemption from performing an
R2T4 calculation that would otherwise apply. By contrast, Sec. 668.21
addresses the situation where a student never actually begins
attendance in any class, which would not require an R2T4 calculation.
Changes: None.
Comments: One commenter asked that the Department confirm that the
withdrawal exemption in Sec. 668.22(a)(6) is optional.
Discussion: The withdrawal exemption in Sec. 668.22(a)(6) is
optional and applies to all types of programs, including those with or
without modules.
Changes: None.
Determination of Withdrawal Status (Sec. 668.22(b)(2))
Comments: Several commenters expressed general support for the
Department's proposals to establish more timely and accurate data to
complete R2T4 calculations, but most had reservations regarding certain
elements of the proposed requirements. One specific commenter indicated
that the proposed regulation aligned with their current process.
Discussion: We thank the commenters for their support and address
their specific reservations in the discussions below.
Changes: None.
Comments: Many commenters opposed the provision that requires an
institution that is required to take attendance to document the
student's withdrawal date within 14 days of a student's last date of
attendance. Many commenters suggested longer time frames, with several
suggesting a 28-day period as a maximum timeframe in which to
officially determine that a student who has not attended for some time
is, in fact, a withdrawn student. This opposition included one
commenter who believed that the Department's primary motivation for
this regulatory requirement was to prevent students from ``cheating the
system.'' Other commenters interpreted the proposed provision to mean
that a postsecondary institution must administratively withdraw a
student after 14 days of nonattendance.
Discussion: We disagree with the commenter who stated that the
provision was intended to prevent students from cheating the system.
The primary motivation of this regulatory provision is to ensure
timelier and more accurate R2T4 calculations. Further, as set forth in
longstanding guidance, the Department does not require an institution
to administratively withdraw a student on the 14th day, but to
establish the date of determination for purposes of the R2T4
calculation. The institution then has an additional 45 days before any
calculated return must be made to determine whether the student
continues with his/her enrollment. If the student does return within
the 45-day timeframe, then no further action is required. This 14-day
time frame only applies to institutions required to take attendance
under current Sec. 668.22(b)(3).
Changes: None.
Comments: Several commenters opined that the Department is
redefining the definition of distance education in Sec. 600.2 by
applying a de facto 14-day timeframe to regular and substantive
interaction. Some commenters pointed out that the Department agreed in
the preamble to the 2020 Distance Education and Innovation Final Rule
\28\ that a timeframe should not be mandated for regular and
substantive interaction.
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\28\ Distance Education and Innovation--<a href="https://www.federalregister.gov/documents/2020/09/02/2020-18636/distance-education-and-innovation">https://www.federalregister.gov/documents/2020/09/02/2020-18636/distance-education-and-innovation</a>.
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Discussion: We disagree with the commenters. The regulatory change
in Sec. 668.22(b)(2) establishes a regulatory timeframe to document a
student's withdrawal status for R2T4 purposes. The timeframe for
assessing a student's status, and for determining that the student has
withdrawn, does not impose any timeframe for regular and substantive
interaction. As noted in the Summary of the Major Provisions of this
Regulatory Action, the Department is simply codifying into regulation
what has been our guidance for institutions required to take attendance
since the 2005-06 award year. The requirement also applies to all
students for whom the institution is required to take attendance, which
could include on campus students that are not subject to the definition
of distance education.
Changes: None.
Comments: Several commenters were concerned that the requirement to
determine a student's withdrawal status within a set timeframe could
negatively impact students who accelerate within their program by
working ahead in one or more individual courses. The commenters were
concerned that they might have to administratively withdraw a student
who had 14 days of inactivity due to course acceleration. One commenter
asked if this regulation eliminated the option for a student to
accelerate in their coursework.
Discussion: As noted above, an institution is required to document
its determination of a student's withdrawal within 14 days of the
student's last date of attendance for purposes of the R2T4 calculation;
however, the institution is not required to administratively
[[Page 486]]
withdraw the student on that date and has an additional 45 days before
it has to pay any return resulting from the withdrawal. It is unlikely
that students who accelerate work will not resume activity within this
time frame. Further, this additional time before payment provides ample
opportunity for the institution to reach out to the student to ensure
they plan to remain enrolled and to ensure the student continues
academic engagement.
Where a student is enrolled in multiple courses in a program and
has accelerated in one or more courses, the student will not be
considered withdrawn as long as the institution has determined that the
student is still attending coursework for that payment period or period
of enrollment. The requirement to determine a withdrawal date for a
student is when that student has completely withdrawn from the
institution or otherwise stopped attending all coursework. Nothing in
this regulatory provision eliminates an acceleration option for
students.
Changes: None.
Comments: A few commenters asked if it is the Department's
expectation that institutions will begin documenting all exceptions
granted by individual faculty members to students if the exception
allows for a temporary cessation of academic activity for a period that
exceeds 14 days. In addition, commenters provided examples of extreme
flexibility with student coursework without stating whether the
programs were term based or nonterm based. In some of the examples, it
appeared that nonterm flexibilities were being used in term-based
academic calendars.
Discussion: For R2T4 purposes, the treatment of exceptions granted
to students by individual faculty members depends on whether the
exception is applied to all of the program's coursework in a payment
period being pursued by the student or only applied to a portion of the
student's coursework in a payment period. If the student has an
exceptional situation that requires a complete cessation of all
coursework in a payment period, the student will be withdrawn unless
the institution grants an approved leave of absence. However, if the
exceptional situation extends to only a portion of the student's
coursework in a payment period, and the institution assesses that the
student is still attending coursework in the payment period or period
of enrollment, there is no requirement for the institution to withdraw
the student at that time. In addition, nothing in this final regulation
infringes on the institution's discretion under existing policies and
procedures to provide grades of incomplete to students when the
institution determines that it is appropriate. Some of the commenters
described existing situations that appeared to be extremely flexible
without stating whether the programs being described were term-based or
nonterm based. We remind the commenters that the use of a term-based
academic calendar, standard or nonstandard, may limit coursework
flexibility in ways that a nonterm calendar does not, because an
academic term has a defined end date.
Changes: None.
Comments: Many commenters were concerned that an administrative
withdrawal after 14 days of inactivity would not serve students
enrolled in short nonstandard terms (e.g., 5, 6, or 8 weeks) or modules
of a similar length that are part of a standard term. The commenters
stated that the 14-day requirement appears to have the historic quarter
or semester terms in mind. For periods of time that are less than
standard terms, the commenters argued that 14 days is too long, and a
shorter, proportional amount of time would be more appropriate.
Discussion: We disagree with the commenters. The commenters'
concern appears to be based on the incorrect assumption that, under the
regulations, an institution cannot administratively withdraw a student
until after 14 days of nonattendance; however, nothing prohibits an
institution from identifying a withdrawn student earlier than 14 days
after the last date of attendance.
Changes: None.
Comments: Several commenters wondered if the 14-day timeframe in
Sec. 668.22(b)(2) includes calendar days, weekdays, holiday/spring
breaks, single-day college or university holidays, or snow (or other
emergency) days.
Discussion: The 14-day date of determination timeframe, which has
been added to Sec. 668.22(b)(2), counts all calendar days regardless
if they are weekend days, holidays, or other scheduled breaks. For days
that are associated with emergencies or disasters, institutions should
refer to the guidance in Dear Colleague Letter GEN 17-08, Guidance for
Helping Title IV Participants Affected by a Major Disaster.
Changes: None.
Comments: A few commenters asked what documentation is required for
an approved leave of absence.
Discussion: The Department does not specify what documentation must
be gathered to support an approved leave of absence at the
institutional level. For a complete listing of the procedures and
necessary information for a leave of absence to be approved for title
IV, HEA purposes, please see the requirements in Sec. 668.22(d), which
are further explained in the FSA Handbook, Volume 5.\29\
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\29\ FSA Handbook--<a href="https://fsapartners.ed.gov/knowledge-center/fsa-handbook">https://fsapartners.ed.gov/knowledge-center/fsa-handbook</a>.
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Changes: None.
Comments: One commenter was concerned with how to deal with a
student who was withdrawn for failing to engage in academic activity
for 14 days and then sought reinstatement at some point following the
withdrawal but within the same payment period. The commenter observed
that these students often successfully complete the course following
the reinstatement. The commenter believed that it is unclear from the
proposed regulatory language whether reinstatement practices would be
permissible moving forward, noting that it would be detrimental to
students if they were prohibited from being reinstated.
Discussion: As we have outlined above, the institution has up to 14
days after the student's last date of attendance to document the
student's withdrawal date, not necessarily to administratively withdraw
the student, since the institution has time to determine a student's
enrollment or withdrawal status. The institution ultimately must ensure
that the R2T4 calculation be completed no later than 30 days following
the date of determination and any funds be returned to the Department
no later than 45 days following the date of determination.
If the institution must ultimately withdraw the student, there is
nothing in this final regulation prohibiting the student from being
reinstated according to the institution's reinstatement policies and
procedures. We remind commenters that guidance regarding student
reinstatements and the ability to undo an R2T4 can be found in the FSA
Handbook Volume 5.\30\
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\30\ FSA Handbook--<a href="https://fsapartners.ed.gov/knowledge-center/fsa-handbook">https://fsapartners.ed.gov/knowledge-center/fsa-handbook</a>.
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Changes: None.
Comments: Several commenters were concerned about students who may
be in academic activities that, by design, do not include regular
interaction between the student and instructor for more than 14 days.
Commenters offered an example of instructors evaluating students' field
work in the community through authentic assessment. Commenters
requested clarification about the institutional requirements under
Sec. 668.22(b)(2) in these types of situations.
Discussion: Section 668.22(b)(2) requires an institution to
document
[[Page 487]]
whether a student should be withdrawn no later than 14 days after the
student's last date of attendance. As we have stated, this is not a
requirement that a student be withdrawn after 14 days of nonattendance.
An institution must still comply with Sec. 668.22(b)(2), even if it
has chosen a method of academic engagement that, by design, creates
periods where student activity is not being monitored/tracked at least
every 14 days. Institutions might reach out to student in a variety of
ways including, but not limited to, using text messages, emails, and
telephone calls.
Changes: None.
Comment: One commenter believed that the Department did not have
the authority to require that institutions determine a student's
withdrawal status no later than 14 days after the last date of
attendance (LDA) (Sec. 668.22(b)(2)). The commenter generally cited to
the caselaw and factors that courts apply when assessing agency action,
including that an agency must demonstrate that it has examined relevant
data and articulated a satisfactory explanation for its action, and
that an agency action is arbitrary and capricious if the agency fails
to consider an important aspect of a problem or offers an explanation
that runs counter to the evidence before the agency. The commenter did
not specify how it thought the Department failed to satisfy this
standard.
Discussion: Congress provided the general framework for title IV
returns in 20 U.S.C. 1091b, and the Department is tasked with
implementing those provisions. Among those provisions is the
requirement that an institution ``return no later than 45 days from the
determination of withdrawal'' the amount of unearned title IV funds
disbursed to the student. 20 U.S.C. 1091b(b). Congress goes on to
provide how that withdrawal date should be determined. 20 U.S.C.
1091b(c). The codification of the Department's longstanding guidance,
for institutions that are required to take attendance, that the
institution must determine the withdrawal date no later than 14 days
after a student's last date of attendance, represents the Department's
mechanism for ensuring that institutions meet the 45-day refund
deadline set forth in the statute. With respect to the remaining
arguments raised in the comment, the Department provided a detailed
explanation in the NPRM (89 FR 60264) of the reasons for the provision.
Changes: None.
Attendance Taking in Distance Education Courses (Sec.
668.22(b)(3)(ii))
Comments: Several commenters agreed with the proposed requirement
that an institution take attendance for each course offered entirely
through distance education, except for dissertation research courses
that are part of a doctoral program. Comments of support include:
<bullet> The state of technology and learning management systems in
online education allows for attendance to be taken;
<bullet> The rule reinforces the importance of providing regular
and substantive interactions between students and faculty in online
coursework;
<bullet> This regulation addresses longstanding inaccuracies in
tracking withdrawals;
<bullet> The rule is an important backstop for vulnerable students
who have been preyed upon by predatory schools;
<bullet> It will be more difficult for institutions to not properly
perform R2T4 calculations for distance education students who withdraw
and help ensure that borrowers have the documents necessary to prove
their eligibility where they seek a loan discharge due to the
institution not returning Direct Loan funds as required.
Discussion: The Department thanks the commenters for their support.
As discussed further below, however, in this final regulation we will
not be finalizing the proposal in Sec. 668.22(b)(3)(ii) to require
attendance taking in distance education courses.
Changes: None.
Comments: Several commenters opposed this provision. Objections
included that the Department lacked legal authority to adopt the
provision; the Department failed to provide data to support the change;
that the provision would increase costs, take instructors away from
teaching, and inhibit academic freedom; and that it would be difficult
to implement for students taking asynchronous courses or those enrolled
in competency-based programs. Commenters were worried about how the
provision would be implemented and requested guidance on various
aspects of the provision.
Discussion: The Department is statutorily required to ensure the
proper return of title IV HEA funds when a student withdraws before
completing a payment period or period of enrollment. Attendance taking
is specifically provided for in the statute and is crucial for the
Department to carry out its statutory responsibilities. We remain
concerned about ensuring that withdrawals are properly tracked in a
fully online environment, where we have observed that institutions have
greater tools available to them for tracking student engagement than
exist when offering in-person classes. An accurate withdrawal date is
critical to ensure that the right amount of unearned title IV aid is
returned, and students' accounts are properly reduced. However, we are
persuaded by concerns about the need for continued development in these
tools to make them consistently effective for this purpose, including
the need for system interoperability. As such, we will not be
finalizing this provision to provide more time to evaluate
technological changes that can better track student engagement. The
Department will continue to monitor the state of this tracking and may
revisit this issue at a later date. In the meantime, we remind
institutions of their obligation to retain adequate documentation to
support their R2T4 calculations when students withdraw, and we
encourage institutions to continue enhancing their systems to capture
accurate student engagement for the purposes of determining if students
are continuing enrollment at the institution.
Changes: The Department removes the provision under Sec.
668.22(b)(3)(ii) for required attendance taking in distance education
courses.
Leave of Absence (Sec. 668.22(d)(1)(vii))
Comments: Several commenters supported the leave of absence
provision in Sec. 668.22(d)(1)(vii) that provides additional
flexibility for students enrolled in eligible prison education programs
and stated that that it will reduce barriers to reenrollment and
college completion for students who are faced with withdrawals during
their studies.
Discussion: We agree with the commenters and thank them for their
support.
Changes: None.
Comments: One commenter opposed the leave of absence provision. The
commenter stated that their institution participates in the Second
Chance Pell experiment under the Experimental Sites Initiative \31\ and
stated that the provision will create administrative burden and add
more complexity. The commenter stated that if an institution offers a
leave of absence, the confined or incarcerated student still may not be
able to return within 180 days and would therefore need to be withdrawn
in any event under the normal requirements for approved leaves of
absence.
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\31\ Experimental Sites--<a href="https://experimentalsites.ed.gov/exp/approved.html">https://experimentalsites.ed.gov/exp/approved.html</a>.
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Discussion: We remind the commenter that Sec. 668.22(d)(1)(vii)
does not require an institution to grant a leave of absence to the
confined or
[[Page 488]]
incarcerated individual. If the institution determines that a leave of
absence would not be appropriate, it may take a more immediate
approach, including an administrative withdrawal.
Changes: None.
Comments: One commenter stated that involuntary transfers of
confined or incarcerated individuals often happen with no warning,
giving those students no opportunity to request a leave of absence in
advance. Since leaves of absence are often granted on the reasonable
expectation that the student will return, this makes it unlikely that
many requests will be approved by the educational institution. For this
and other reasons, the commenter suggested that the Department allow
for an exemption to R2T4 for confined or incarcerated students that
experience involuntary transfers to another facility that result in an
interruption to their programs.
Discussion: The Department acknowledges that the leave of absence
provision may not be able to be utilized by all confined or
incarcerated students who need it. However, for those who meet the
requirements for such leave, the regulation will provide additional
flexibility for them to resume their academic program at any point upon
their return from the leave of absence. During negotiated rulemaking,
the Department initially discussed a proposal to exempt confined or
incarcerated individuals from R2T4 if the students withdrew from a
program due to circumstances outside of their control, such as a
correctional facility-wide lockdown or an involuntary transfer to a
different facility. Upon further review, we determined that we do not
have the legal authority to waive R2T4 requirements for a targeted
group of students. In addition to our lack of legal authority, the
Department heard concerns from several negotiators opposed to such an
exemption. They pointed out that such an exemption may cause confined
or incarcerated individuals to reach their Pell grant lifetime
eligibility used (LEU) threshold faster, without obtaining academic
credit. Also, the Department heard from negotiators that some
postsecondary institutions have already established policies that
account for involuntary breaks in prison education programs, such as
waiving all charges related to the affected payment period, and an
exemption might cause institutions to revise or remove beneficial
student policies already in place. We thus decline the commenter's
suggestion to include an exemption to R2T4 for confined or incarcerated
students in these regulations.
Changes: None.
Comments: One commenter stated that students in community colleges
often work, have families and unexpected events are likely to occur,
and therefore they may not be able to request a leave of absence in
advance.
Discussion: The Department believes the commenter may have
misinterpreted the proposed revisions to Sec. 668.22(d)(1)(vii). The
only change to this provision is that a confined or incarcerated
individual, in a term-based setting, will not have to come back from a
leave of absence and resume where the student left off, and instead,
the individual will be allowed to return at a different point in their
prison education program. No other leave of absence provisions in this
regulation were modified.
Changes: None.
Clock-Hour Programs (Sec. 668.22(f)(1)(ii))
Comments: One commenter disagreed with the Department's proposal to
streamline and make consistent an institution's calculation of the
percentage of the payment period completed for a clock-hour program.
The commenter requested that the Department retain the current
regulatory language that allows for two distinct methodologies: the
cumulative method and the payment period method.\32\
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\32\ NPRM--<a href="https://www.federalregister.gov/documents/2024/07/24/2024-16102/program-integrity-and-institutional-quality-distance-education-return-of-title-iv-hea-funds-and">https://www.federalregister.gov/documents/2024/07/24/2024-16102/program-integrity-and-institutional-quality-distance-education-return-of-title-iv-hea-funds-and</a>.
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Discussion: The Department declines to adopt the commenter's
suggestion. We have observed that many times, when an institution uses
the cumulative method, the percentage of funds earned by the
institution is much larger than the time the student actually attended.
This results in a much smaller return of title IV, HEA funds, which
ultimately hurts a student who had to withdraw from a program. Less
money returned to the Department means the student has used more of
their lifetime Pell eligibility and allowable loan amounts without
successfully completing coursework, see the example in Issue Paper 4:
Withdrawals and Return of Title IV Funds,\33\ and the Department does
not believe this is a desirable result.
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\33\ Issue Paper 4--<a href="https://www.ed.gov/sites/ed/files/policy/highered/reg/hearulemaking/2023/program-integrity-and-institutional-quality-session-1-issue-paper-r2t4-final.pdf">https://www.ed.gov/sites/ed/files/policy/highered/reg/hearulemaking/2023/program-integrity-and-institutional-quality-session-1-issue-paper-r2t4-final.pdf</a>.
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Because we determined that the payment period method leads to more
accurate R2T4 calculations because it better aligns the R2T4
regulations with the regulatory definition of a clock-hour payment
period under Sec. 668.4(c), and promotes consistency across all
calculations, the Department chose in Sec. 668.22(f)(1)(ii) to
standardize how institutions determine the percentage of the payment
period completed for a clock-hour program by using only the payment
period method. Providing a single more accurate and consistent way to
calculate the percentage of the payment period completed will simplify
R2T4 policy, reduce complexity and confusion, ensure that students are
treated consistently, and eliminate an area of potential abuse.
Changes: None.
Modules (Sec. 668.22(l)(9))
Comments: Several commenters supported the provision in Sec.
668.22(l)(9) to consider a module part of the payment period used in
the denominator of the R2T4 calculation only when a student begins
attendance in the module. Commenters believed that the change
simplifies the R2T4 calculation, reduces burden, and minimizes errors.
A few commenters were also pleased that this change eliminates the
complexity of the ``freeze date'' \34\ policy. One commenter requested
that the Department early implement this change.
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\34\ For discussion of the ``freeze date,'' see 89 FR 60265;
<a href="https://www.federalregister.gov/documents/2024/07/24/2024-16102/program-integrity-and-institutional-quality-distance-education-return-of-title-iv-hea-funds-and">https://www.federalregister.gov/documents/2024/07/24/2024-16102/program-integrity-and-institutional-quality-distance-education-return-of-title-iv-hea-funds-and</a>.
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Discussion: We thank the commenters for their support. Any
regulations eligible for early implementation are listed in the
Implementation Date of These Regulations section of these final
regulations.
Changes: None.
Comments: Several commenters stated that the change in how modules
factor into the R2T4 calculation in Sec. 668.22(l)(9) will make it
easier for students to obtain and institutions to retain large amounts
of student loans through minimal participation, which will result in a
gaming of the system. Commenters stated that the change could
artificially increase the ``percentage earned'' component of the R2T4
calculation, resulting in student over-borrowing and excessive student
loan burdens.
Some commenters provided examples to support their claims:
<bullet> If a student successfully completes a module, but fails to
begin attendance in the second module, the R2T4 calculation will result
in 100% of aid earned; and
<bullet> If a student withdraws during the first module and does
not attend the second module, the denominator is only the days
contained in the first module.
[[Page 489]]
The student attends 5 weeks (35 days) of the first 8-week module (56
days). The fraction 35/56 translates to 62.5%. As this is greater than
60%, the student is considered to have earned 100% of the Title IV aid
for the full 16-week term.
The commenters provided several alternatives to the Department's
proposal, including: (1) prohibiting institutions from making
subsequent disbursements to students in modules within the same payment
period if the student does not attend the module; (2) including in the
R2T4 calculation denominator the days for all modules for which the
student began attendance, and all modules the student did not attend in
which the student enrolled before the date of withdrawal and did not
withdraw before the date of withdrawal; or (3) rescinding the proposed
regulation.
Discussion: We disagree with the commenters that the change will
result in a gaming of title IV, HEA aid. We acknowledge that, in the
examples shared by the commenters, this change will produce outcomes
that may prove more beneficial to students than our current
requirements. However, we believe the reduction in administrative
burden created by this regulatory change will more than outweigh the
potential for students to receive more Federal student aid than they
would have under the previous requirements. We note that students
enrolled in modular programs still are required to comply with title IV
requirements that are not impacted by this regulatory change, such as
mandatory Pell recalculations. For a more detailed discussion on the
R2T4 process, please refer to Volume 5 of the 2024-25 Federal Student
Aid Handbook.\35\ We plan to release guidance to help institutions
understand and implement these changes.
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\35\ Federal Student Aid Handbook--<a href="https://fsapartners.ed.gov/knowledge-center/fsa-handbook/2024-2025/vol5">https://fsapartners.ed.gov/knowledge-center/fsa-handbook/2024-2025/vol5</a>.
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We remind institutions that it is possible for an institution to
break up title IV, HEA disbursements into smaller increments (by
module, for example) to best meet the needs of the student, as long as
the disbursement practices do not violate Sec. 668.16(s). In breaking
up title IV, HEA disbursements into smaller increments, a student may
not be eligible for a future disbursement for a module that the student
did not attend because the student did not successfully complete the
period for which the loan was intended. In such situations, the
concerns raised by the commenter about excessive awarding of aid
relative to time spent attending would not occur.
We appreciate the commenters' alternative suggestions. We decline
the first suggestion, because while these regulations modify how
modules factor into the R2T4 calculation, the rulemaking did not extend
to changing the manner in which title IV, HEA aid is disbursed within a
payment period or period of enrollment. We decline the second suggested
alternative, because it appears to restate existing requirements, which
these final regulations seek to simplify. Finally, for all of the
reasons set forth in the NPRM and in this preamble, see, e.g., 89 FR
60256, we have determined this new provision is appropriate and
improves administration of the title IV, HEA programs, and we thus
decline to rescind it.
Changes: None.
5. Federal TRIO Programs (Sec. Sec. 643.3, 644.3, 645.3, 646.3, 647.3)
General Support and Requests for Expansion
Comments: Many commenters supported the proposed amendments to the
TRIO regulations, and a group of commenters stated that there is
substantial and enthusiastic support to expand eligibility among TRIO
counselors and practitioners. These commenters believe that the
proposed expansion of eligibility would help certain noncitizen
students included within that proposed definition to access vital
educational services, close the achievement gap, and promote equity in
education.
However, the Department received additional, vocal feedback from
several commenters who repeatedly emphasized that it is important that
all students, notwithstanding their immigration status, have equitable
access to education. Additionally, many commenters advocated for the
Department to expand student eligibility across all TRIO programs, and
not just those three TRIO programs included within the Department's
proposed rule. These commenters note the importance of providing
students with support while in college to increase the students'
chances of graduating and gaining the skills necessary to be successful
in the workforce, support which can be more directly provided by the
SSS and McNair programs. Several of these commenters also argued that
including the SSS and McNair programs would help undocumented students
receive the support and services necessary to be successful in college
and motivate more of these students to pursue graduate education. Still
other commenters provided suggested language for modifying the proposed
regulatory changes to include other noncitizens who have previously
attended high school in the U.S., territories, or Freely Associated
States. Furthermore, the Department received feedback noting that there
is no statutory restriction that requires TRIO providers to offer
services only to students who are citizens, and that the HEA makes no
mention of such a prohibition for the TRIO programs.
Discussion: We thank the commenters for their support. As these
commenters have pointed out, many noncitizens (including undocumented
students) would greatly benefit from TRIO services based on their
status as a disadvantaged group facing challenges in postsecondary
enrollment and completion. We are persuaded by commenters that the
proposed expansion of student eligibility for TRIO programs under the
NPRM, which was focused on noncitizen students enrolled or seeking to
enroll in a high school under TS, UB and EOC, was too narrow both in
scope of additional populations to be served, as well as in its
omission of the SSS and McNair programs. We agree with those commenters
who noted that the HEA does not limit participation in the TRIO
programs based on immigration status and find that the proposed rule
was restrictive in its continued consideration of immigration status as
a barrier to participation in the TRIO programs. We are also persuaded
that an expansion of student eligibility under only certain TRIO
programs would create confusion, as many grantees administer grants
under more than one TRIO program. Additionally, expanding student
eligibility for only certain TRIO programs would increase
administrative burden by requiring grantees to deny similarly situated
noncitizens from participating under certain TRIO programs, but not
others.
As the TRIO programs provide a pipeline of services for eligible
participants, we believe it would frustrate the purpose of the TS, UB
and EOC programs to not provide (at minimum) a correlating extension of
student eligibility under the SSS and McNair programs. However, as
noted above, the Department now recognizes that the proposed rule's
focus on ``disadvantaged students who have enrolled or seek to enroll
in a high school in the United States, territories, or Freely
Associated States'' would continue to perpetuate consideration of
immigration status as a barrier to participation in the TRIO programs
in a
[[Page 490]]
manner that is not supported by the text of the HEA itself. For the
foregoing reasons, the Department has decided not to finalize the
Federal TRIO provisions, to reconsider how best to ensure that the TRIO
programs are able to reach all populations of disadvantaged students,
irrespective of immigration status.
Changes: The Department is not finalizing the TRIO provisions
except for the technical change mentioned above and may reconsider TRIO
student eligibility through future rulemaking efforts.
Comments: Two commenters were supportive of the changes but were
concerned that expanding eligibility could bring some political tension
and put TRIO's funding in jeopardy.
Discussion: The TRIO programs have been around for over 60 years,
making these programs one of the oldest grant programs authorized under
the HEA. These programs continue to exist because they are still needed
and must continue to evolve to meet the needs of those students that
the Secretary identifies as disadvantaged in postsecondary access and
attainment. We are confident that these programs will continue to serve
students and adapt to serve new groups of qualified individuals from
disadvantaged backgrounds.
Changes: The Department removes the TRIO provisions except for the
technical change mentioned above and may reconsider TRIO student
eligibility through future rulemaking efforts.
Requests To Remove the Proposed Prohibition on Direct Cash Stipends in
the Upward Bound Program
Comments: A few commenters were disappointed that the NPRM limited
the availability of cash stipends to UB participants by immigration
status, noting that the limitation would run counter to the
Department's stated goal of expanding access to higher education.
Another commenter noted that these restrictions would place a burden on
program administrators to track differences in eligibility among
students within the program and create privacy concerns for students as
they disclose their legal status to determine eligibility for the
stipend.
Discussion: As noted in the proposed rule, PRWORA prohibits
``Federal public benefits'' from being awarded to persons who are not
able to demonstrate certain types of eligible noncitizen statuses as a
``qualified alien'' under 8 U.S.C. 1641(b). The general definition of a
``federal public benefit'' is provided under U.S.C. 1611(c)(1). Federal
agencies are generally responsible for identifying which of their
programs provide Federal public benefits. The Department stated its
determination within the NPRM that the direct cash stipends provided
under the UB program likely represent a ``similar benefit'' to those
enumerated benefits under 8 U.S.C. 1611(c)(1)(B) for which, where
payment is provided to an ``individual, household, or family
eligibility unit[,]'' falls under the restrictions of PRWORA.
Therefore, while the Department is not finalizing this provision,
compliance for PRWORA restrictions operates independent of these
rulemaking efforts.
Changes: The Department is not finalizing the TRIO provisions and
may reconsider TRIO student eligibility through future rulemaking
efforts.
Clarifying Who Is Eligible for the TRIO Programs
Comments: Certain commenters sought clarity on which individuals
would be eligible under the Department's proposed rule, including
income requirements, potential eligibility of middle school students,
and whether only a certain percentage of noncitizens would be eligible
to participate under the proposed rule.
Discussion: Because the Department is not finalizing this
provision, we decline to provide guidance as to how these changes would
have been operationalized. However, we note that section 402A of the
HEA outlines the documentation requirements for low-income individuals
under the TRIO programs.
Changes: The Department does not finalize the TRIO provisions and
may reconsider TRIO student eligibility through future rulemaking
efforts.
Suggested Technical Edits for Students From Territories and Freely
Associated States
Comments: One commenter points out that there are multiple
instances in the proposed TRIO regulations where American Samoa is
omitted while other Pacific territories are explicitly named.
Additionally, the commenter notes that the regulatory text includes
outdated references to the Republic of Palau, which is no longer part
of the Pacific Trust Territory, but instead a Freely Associated State.
Discussion: The Department notes that Natives of American Samoa are
eligible to participate in the TRIO sections as a ``national of the
United States.'' Therefore, no change is needed to ensure the continued
TRIO program participation of these individuals.
The suggested change of listing the Republic of Palau as among the
``Freely Associated States'' in the EOC and TS programs is well taken
as the U.S.-Palau Compact of Free Association was ratified in 1993 and
came into effect on October 1, 1994. In addition to listing the
Republic of Palau among the ``Freely Associated States'' in the EOC and
TS programs, we will also remove references to the ``Trust Territory of
the Pacific Islands'' in the TRIO regulations, as this agreement
dissolved in 1990. The Department considers these to be technical
changes to update outdated language. Another technical change we will
be making in the UB program is removing the periods at the end of
paragraphs Sec. 645.3 (a)(1) through (4) and adding, in each place,
``; or'' for consistency purposes.
Changes: We have added ``Republic of Palau'' to the list of
residents in the Freely Associated States that are currently eligible
to participate under Sec. Sec. 643.3(a)(1)(v) and 644.3(a)(1)(v). We
have removed ``Trust Territory of the Pacific Islands (Palau)'' from
Sec. Sec. 643.3(a)(1)(iv) and 644.3(a)(1)(v). We have removed ``Trust
Territory of the Pacific Islands'' from Sec. Sec. 645.3(a)(4) and
647.3(a)(4). We have also removed the periods at the end of paragraphs
Sec. 645.3 (a)(1) through (4) and added, in each place, ``; or''.
Opposition to Expanding Eligibility
Comments: A group of commenters argued that the Department's
proposed rule would be contrary to the legislative intent of the HEA,
and that these changes would siphon resources away from currently
eligible low-income American citizens. The commenters also asserted
that the proposed rule incorrectly cited requirements under Plyler v.
Doe and programs under the Elementary and Secondary Education Act
(ESEA) as a parallel for TRIO programs. These commenters also expressed
a concern that grantees in states with more newly eligible noncitizens
would vie for a larger share of the existing TRIO funding, and thereby
reduce available funding for grantees in other states.
An additional commenter believed the Department's proposal to make
noncitizens who are enrolled in or seeking to enroll in a U.S. high
school eligible for the TRIO programs would be in contrast with Federal
immigration policy and certain statements of Congress in 8 U.S.C. 1601.
Finally, one commenter argued that the amendments to the Federal
TRIO programs might undermine their flexibility and effectiveness. The
commenter believes regulatory changes should be carefully considered to
ensure they do not inadvertently reduce the
[[Page 491]]
availability or effectiveness of services provided to TRIO program
participants.
Discussion: Although the Department is not finalizing this
provision to reconsider how best to ensure that the TRIO programs are
able to reach all populations of disadvantaged students, the Department
disagrees with the comments of opposition on several grounds. As a
factual matter, the Department's NPRM did not state that TRIO is
governed by ESEA, nor did the NPRM cite Plyler v. Doe in the
Department's rationale for the proposed changes. Regarding the
commenters' concerns about newly eligible noncitizens taking resources
away from currently eligible low-income American citizens, the TRIO
programs provide services to several groups from disadvantaged
backgrounds and this work would continue in the event of an expansion
of student eligibility. Additionally, we disagree with the commenters'
concerns that TRIO funding could be diverted to grantees in states with
a higher distribution of newly eligible students, as the existing
procedures for selecting and distributing funding amongst eligible
grantees help to safeguard against an inequitable distribution of
resources across grantees.
In response to the commenter who raised concerns regarding
noncitizens receiving any public resources under TRIO, the Department
reiterates that not all benefits or services provided are the type of
``Federal public benefits'' Congress sought to restrict in enacting
PRWORA. Indeed, Congress specifically exempted several Federal public
benefit programs in PRWORA in order to allow these programs to provide
services to all individuals regardless of their immigration status,
thereby directly undercutting the commenter's position that certain
noncitizens should be entirely deprived of aid and assistance of aid
from the Federal government.\36\ The fact that a Federal program was
not specifically included amongst those specifically excluded benefit
programs does not necessitate the conclusion that it provides ``Federal
public benefits'' for purposes of PRWORA. Rather, providers of Federal
benefits, such as the Department of Education, are required to
``determine whether the particular program they are administering
provides a `federal public benefit[.]' '' \37\ Additionally, ``[i]f one
program provides several public benefits, [PRWORA's] requirements apply
only to those benefits that are non-exempted federal public benefits
under [PRWORA].'' \38\ The Department also clarifies its stated
reasoning, in the proposed rule, noting that the Department's stated
position on 89 FR print page 60267 of the Federal Register should have
read ``the Department believes that TRIO grant programs providing
student support services in the secondary context do not constitute the
type of ``incentive for illegal immigration provided by the
availability of public benefits'' that PRWORA was enacted to
discourage.'' The Department believes this position would be consistent
with the omission of other programs that provide non-postsecondary
services from the requirements of PRWORA, such as Head Start and
elementary and secondary education, as noted within the proposed rule.
While the Department has determined not to finalize its proposed
provisions, the Department nevertheless stands by its stated position
that not all benefits and services provided under the TRIO programs are
subject to restriction under PRWORA.
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\36\ 8 U.S.C. 1611(b).
\37\ Department of Justice, Interim Guidance on Verification of
Citizenship, Qualified Alien Status and Eligibility Under Title IV
of the Personal Responsibility and Work Opportunity Reconciliation
Act of 1996, 62 FR 61344 (Nov. 17, 1997).
\38\ Id. at 61346.
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Changes: The Department does not finalize the proposed TRIO
provisions and may reconsider TRIO student eligibility through future
rulemaking efforts.
VIII. Regulatory Impact Analysis
Executive Orders 12866, 13563, and 14094
Under Executive Order 12866, the Office of Management and Budget
(OMB) must determine whether this regulatory action is ``significant''
and, therefore, subject to the requirements of the Executive Order and
subject to review by OMB. Section 3(f) of Executive Order 12866, as
amended by Executive Order 14094, defines a ``significant regulatory
action'' as an action likely to result in a rule that may--
(1) Have an annual effect on the economy of $200 million or more
(adjusted every three years by the Administrator of the Office of
Information and Regulatory Affairs (OIRA) for changes in gross domestic
product); or adversely affect in a material way the economy, a sector
of the economy, productivity, competition, jobs, the environment,
public health or safety, or State, local, territorial, or Tribal
governments or communities;
(2) Create serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) Materially alter the budgetary impacts of entitlements, grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
(4) Raise legal or policy issues for which centralized review would
meaningfully further the President's priorities, or the principles set
forth in the Executive Order, as specifically authorized in a timely
manner by the Administrator of OIRA in each case.
This final regulatory action is a significant regulatory action
subject to review by OMB under section 3(f)(4) of Executive Order
12866, as amended by Executive Order 14094. The Department estimates
present value net cost of $27,349,749 over ten years at a 2 percent
discount rate. This is equivalent to an annualized net cost of
$3,044,753 over ten years. Additionally, we estimate annualized
quantified costs of $9,423,657 related to paperwork burden.
Notwithstanding this determination, based on our assessment of the
potential costs and benefits (quantitative and qualitative), the
Department has determined that the benefits of this final regulatory
action would justify the costs.
The Department has also reviewed the regulations under Executive
Order 13563, which supplements and explicitly reaffirms the principles,
structures, and definitions governing regulatory review established in
Executive Order 12866. To the extent permitted by law, Executive Order
13563 requires that an agency--
(1) Propose or adopt regulations only on a reasoned determination
that their benefits justify their costs (recognizing that some benefits
and costs are difficult to quantify);
(2) Tailor its regulations to impose the least burden on society,
consistent with obtaining regulatory objectives and taking into
account--among other things and to the extent practicable--the costs of
cumulative regulations;
(3) In choosing among alternative regulatory approaches, select
those approaches that maximize net benefits (including potential
economic, environmental, public health and safety, and other
advantages; distributive impacts; and equity);
(4) To the extent feasible, specify performance objectives, rather
than the behavior or manner of compliance a regulated entity must
adopt; and
(5) Identify and assess available alternatives to direct
regulation, including economic incentives--such as user fees or
marketable permits--to encourage the desired behavior, or provide
information that enables the public to make choices.
[[Page 492]]
Executive Order 13563 also requires an agency ``to use the best
available techniques to quantify anticipated present and future
benefits and costs as accurately as possible.'' The Office of
Information and Regulatory Affairs of OMB has emphasized that these
techniques may include ``identifying changing future compliance costs
that might result from technological innovation or anticipated
behavioral changes.''
The Department issues these final regulations only on a reasoned
determination that their benefits would justify their costs. In
choosing among alternative regulatory approaches, the Department
selected those approaches that maximize net benefits. Based on the
analysis that follows, the Department believes that these regulations
are consistent with the principles in Executive Order 13563.
The Department has also determined that this regulatory action does
not unduly interfere with State, local, territorial, or Tribal
governments in the exercise of their governmental functions.
As required by OMB Circular A-4, the Department compared the final
regulations to the current regulations. In this regulatory impact
analysis, the Department discusses the need for regulatory action,
responds to comments related to the RIA in the NPRM, discusses the
potential costs and benefits, and the regulatory alternatives we
considered. Elsewhere in this section under Paperwork Reduction Act of
1995, the Department identifies and explains burdens specifically
associated with information collection requirements.
1. Congressional Review Act
Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
OIRA has found that this rule does not meet the criteria in 5 U.S.C.
804(2).
2. Need for Regulatory Action
The Department has identified a significant need for regulatory
action to address inadequate protections for students and taxpayers in
the current regulations.
Distance Education
The HEA and the Department's regulations provide that institutions
of higher education may offer programs through distance education.
Currently, however, the Department has very limited data about students
enrolled in distance education, which limits the Department's ability
to answer important questions about student pathways and outcomes
through in-person, distance, and hybrid education. For example, an
institution may offer a program that is provided on campus and a
related program of the same CIP code that is provided online. The
Department is currently unable to distinguish between those two
programs in the data it currently receives, which limits its capacity
to provide helpful and reliable information to students, families,
institutions, and the public. A notable example is the Department is
unable to distinguish between two such programs for College Scorecard
program-level data including debt, earnings, and completion. The
Department is also unable to determine whether institutions have
reached the 50 percent threshold for distance education enrollment
announced in Dear Colleague Letter GEN-23-09.\39\ This is important
because institutions must obtain further accreditor approval beyond the
initial approval to deliver distance education programs when they
enroll at least 50 percent of their students in distance education or
offer at least 50 percent of their courses (or 50 percent of a program)
via distance education.
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\39\ <a href="https://fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/2023-05-18/accreditation-and-eligibility-requirements-distance-education">https://fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/2023-05-18/accreditation-and-eligibility-requirements-distance-education</a>.
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The final regulations for distance education change institutional
reporting requirements to specify a student's distance education
enrollment status.
This change enables the Department to obtain better data and more
meaningfully compare the outcomes of students, particularly for those
who are enrolled in similar programs that are delivered using different
modalities. It also allows the Department to better monitor and oversee
the aid programs and institutional accrediting agencies by ensuring
institutions are receiving appropriate review and approval of distance
education offerings.\40\
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\40\ <a href="https://fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/2023-05-18/accreditation-and-eligibility-requirements-distance-education">https://fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/2023-05-18/accreditation-and-eligibility-requirements-distance-education</a>.
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R2T4
The R2T4 regulations govern the process institutions must conduct
when a title IV, HEA recipient ceases attendance during a payment
period or a period of enrollment. An R2T4 calculation determines, based
on the proportion of a payment period or period of enrollment a student
completed, whether funds must be returned by the school and/or student,
or whether the student is eligible for a post-withdrawal disbursement.
R2T4 calculations differ based on academic calendars and program
format, including the use of clock hours or credit hours and the use of
module courses within terms. R2T4 consistently ranks among the top ten
compliance findings for institutions, is the subject of an entire
volume of sub-regulatory guidance in the FSA Handbook and yields
complex and challenging questions. Therefore, the Department believes
that there is a need to take regulatory action immediately to update
and clarify the regulations.
Withdrawal Exemption
For some institutions, the R2T4 process is complex, with a high
likelihood of errors, including issues such as incorrectly determining
the withdrawal date or the number of days in a payment period. To
simplify the process for institutions, these regulations establish a
withdrawal exemption in which an institution does not need to conduct
an R2T4 calculation if the following conditions are met: (1) the
student is treated as never having begun attendance; (2) the
institution returns all title IV, HEA aid disbursed to the student
including any title IV credit balance for that payment period or period
of enrollment; (3) the institution refunds all institutional charges to
the student for that payment period or period of enrollment; and (4)
the institution writes off or cancels any payment period or period of
enrollment balance owed by the student to the institution due to the
institution's returning of title IV funds to the Department.
The final withdrawal exemption reduces the likelihood that a
student owes money back to the school, allows the student to not
exhaust annual and aggregate subsidized aid, including Pell Grants, and
reduces the likelihood the student will have a loan balance associated
with a program they may not finish.
Determination of Withdrawal Status
This provision requires that an institution that is required to
take attendance must, within 14 days of a student's last date of
attendance, document a student's withdrawal date and maintain the
documentation as of the date of the institution's determination that
the student withdrew. We reiterate that this is not a requirement that
the student be administratively withdrawn or that an R2T4 calculation
be completed at that time. If the student subsequently begins
attendance within 30 days of the date of determination, then there is
nothing further an institution must do as it relates to the R2T4
calculation (30 days)
[[Page 493]]
or the return of funds to the Department (45 days).
Leave of Absence
On July 1, 2023, the Department published final regulations that
detailed Pell Grant eligibility for confined or incarcerated
individuals in PEPs.\41\ These regulations did not address students who
are incarcerated and who face involuntary interruptions to their
academic programs. For example, an entire correctional facility may be
locked down due to a security issue, interrupting a student's progress
in their PEP.
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\41\ <a href="https://www.federalregister.gov/documents/2022/10/28/2022-23078/pell-grants-for-prison-education-programs-determining-the-amount-of-federal-education-assistance">https://www.federalregister.gov/documents/2022/10/28/2022-23078/pell-grants-for-prison-education-programs-determining-the-amount-of-federal-education-assistance</a>.
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With these final regulations the Department makes changes to the
regulations governing leave of absence to allow a student who is
incarcerated to not have to return from the leave of absence where the
student left off, and instead, the individual could return to a
different point in their PEP. This applies to programs of any
structure, including term-based programs. This change increases
flexibility for institutions and will help boost student retention in
PEPs.
Clock-Hour Programs
As a part of the R2T4 calculation, institutions must determine the
percentage of the payment period or period of enrollment the student
completed based on scheduled clock hours if enrolled in a clock-hour
program. There are currently two ways that institutions can make this
determination: the payment period method and the cumulative method. The
cumulative method (as described in the Analysis of Public Comment and
Changes section) usually results in a significant amount of aid earned
by the student compared to the actual time the student attended during
the payment period. With these final regulations the Department has
streamlined this calculation so that the payment period method is the
single, standardized method across all clock-hour programs.
R2T4 and Modules
In 2021, the Department published final regulations outlining
several changes to R2T4 and modules.\42\ The regulations immediately
raised a question about how an institution determines whether the days
in a module are included in the R2T4 calculation. The answer is complex
and depends on several variables, including whether the institution
uses an R2T4 freeze date and the type(s) of title IV, HEA aid for which
the student was eligible during the payment period or period of
enrollment.
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\42\ Distance Education and Innovation-final regulations:
<a href="https://www.federalregister.gov/documents/2020/09/02/2020-18636/distance-education-and-innovation">https://www.federalregister.gov/documents/2020/09/02/2020-18636/distance-education-and-innovation</a>.
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With these final regulations the Department simplifies the
determination by only including days in the module if the student
actually attends the module. This change reduces complexity and errors
as institutions will no longer need to use a freeze date or
differentiate between Pell Grant and Direct Loan recipients.
3. Summary of Comments and Changes From the NPRM
Table 3.1--Summary of Key Changes in the Final Regulations
------------------------------------------------------------------------
Regulatory Description of final
Provision section provision
------------------------------------------------------------------------
Distance education
------------------------------------------------------------------------
Definition of distance education 600.2 Removes the phrase
course. ``residency
experiences'' from the
definition.
Definition of additional location 600.2 Does not finalize the
definition related to a
virtual location.
Definition of a week of 668.3 Does not finalize the
instructional time. limitation on
asynchronous clock-hour
programs being offered
through distance
education.
Reporting enrollment in distance 668.41 Updates the effective
education or correspondence date from July 1, 2026,
courses. to July 1, 2027.
------------------------------------------------------------------------
Return to title IV
------------------------------------------------------------------------
Treatment of Title IV Grant and 668.21 Does not finalize the
Loan Funds if the Recipient does provision to allow a
not Begin Attendance at the student who received a
Institution (Sec. 668.21). loan disbursement as
part of a title IV
credit balance, but
never began attendance
in a payment period or
period of enrollment,
to repay loan funds
they received under the
terms of their
promissory note.
Withdrawal Exemption............. 668.22 Updates Sec.
668.22(a)(2)(ii)(A)(6)(
iv) to replace ``any
current year balance''
with ``any payment
period or period of
enrollment balance''
owed by the student to
the institution due to
the institution's
returning of title IV,
HEA funds to the
Department. Also
include references to
funds received by a
parent so they are
covered by this
exemption as well.
Required attendance taking in 668.22 Does not finalize the
distance education courses. proposal require
attendance taking in
distance education
courses.
------------------------------------------------------------------------
Federal TRIO Programs
------------------------------------------------------------------------
Talent Search program............ 643.3 Does not finalize the
proposed changes to
this provision.
Educational Opportunity Centers 644.3 Does not finalize the
program. proposed changes to
this provision.
Upward Bound programs (Regular, 645.3 Does not finalize the
or Math and Science). proposed changes to
this provision.
------------------------------------------------------------------------
General Comments
Comments: One commenter claimed that the Department significantly
underestimated the compliance costs for this regulatory package, which
will necessitate significant changes to institutional policies and
processes, will involve large-scale duplicative reporting, and will
require
[[Page 494]]
redevelopment of information systems to support the new requirements,
all of which will ultimately increase costs for students.
Discussion: While the commenters did not provide any data to
justify their assertions, after careful review of the final
regulations, and based on the Department's administrative experience,
the Department increased burden estimates as described in the Distance
Education cost analysis section of the RIA. In the NPRM, we estimated a
cost burden of $381,560 in the first year across all impacted
institutions under Sec. 668.41 to require institutions to report the
enrollment status of students in distance education or correspondence
courses. In the NPRM, the Department did not estimate a cost for
transitioning to synchronous instruction for affected clock-hour
programs. In these final regulations, the Department has removed
several provisions, which reduce levels of burden from what was
included in the NPRM. This includes not finalizing the provision
related to synchronous clock hour programs.
Additionally, the Department has not finalized the provision under
Sec. 668.22(b)(3)(ii) for required attendance taking in distance
education courses, which reduces burden associated with that previously
proposed requirement.
Changes: In total, the Department now estimates reviewing and
revising these procedures will cost approximately $10,057,889 in the
first year across all impacted institutions.
Comments: One commenter noted that the proposed provisions could
force institutions to hire additional staff to manage an increased
documentation and compliance workload.
Discussion: The Department acknowledges that some institutions may
need to increase or re-allocate staff duties and responsibilities to
comply with these final regulations. The costs described in the RIA
account for potential increased costs for institutions as a result of
these final regulations. In the NPRM, we estimated a cost burden of
$381,560 in the first year across all impacted institutions under Sec.
668.41 to require institutions to report the enrollment status of
students in distance education or correspondence courses. In the NPRM,
the Department did not estimate a cost for transitioning to synchronous
instruction for affected clock-hour programs. In these final
regulations, the Department has removed several provisions, which
reduce levels of burden from what was included in the NPRM. This
includes not finalizing the provision related to synchronous clock hour
programs.
Changes: In total, the Department now estimates reviewing and
revising these procedures will cost approximately $10,057,889 in the
first year across all impacted institutions.
Asynchronous Distance Education in Clock-Hour Programs
Comments: One commenter alleged that the Department has not
sufficiently identified the proportion of asynchronous learning
activities that do not meet the Department's standard. This commenter
argued that a reasoned analysis must include an estimate of the cost to
students and institutions of removing asynchronous distance education
instruction in clock-hour programs and a comparison to any benefits
from those proposed changes. The commenter further opined that failing
to provide such an estimate would render the provision arbitrary and
capricious. Another commenter opined that the proposed regulations
would disproportionately increase administrative burden on institutions
that serve students exclusively through distance education. One
commenter estimated that at least 75 percent of asynchronous activities
would be disallowed under the proposed regulations but are of
sufficient quality to merit equal treatment with synchronous
activities, forecasted that the value of asynchronous learning will
increase over time, and predicted that the costs to institutions and
students for disallowing asynchronous distance education in clock-hour
programs would therefore also rise over time. One commenter noted that
faculty offering asynchronous coursework via distance education in
clock-hour programs may experience increased workload and potential
dissatisfaction because of the need to redesign their courses.
One commenter noted that it is the responsibility of the
Department, not public commenters, to provide reasoned burden and cost
estimates for the Department's proposed regulatory provisions, and that
it is inappropriate for the Department to avoid such necessary
calculations merely because commenters have not offered their own
calculations.
Discussion: When developing cost and benefit analysis of proposed
rules, the Department relies on its own data sources, publicly
available data sources, and the administrative experience of Department
staff. In instances where there is a lack of certainty, the Department
may rely, in part, on data or evidence provided to the Department
through public comment on the NPRM. That is why, in section 3.A.3 of
the NPRM, the Department invited comments from the public on its
estimates contained in the NPRM. The Department requested comments to
ensure that the NPRM's estimates accurately reflected realistic
assumptions about the average burdens that the regulations would impose
on affected entities. The Department believes that the cost analysis
included in the RIA fully considers the potential costs and benefits of
the final regulations based on the Department's own data sources,
publicly available data sources, and the administrative experience of
Department staff. Additionally, for these final regulations, the
Department revised its cost estimates upward partly in response to
high-quality comments from the public. While these high-quality
comments did not provide specific data, they did provide convincing
qualitative information that led the Department to further consider
potential costs, based on the Department's administrative experience,
under the final regulations.
Changes: The Department removed limitations on asynchronous
distance education in clock hour programs. In total, the Department now
estimates reviewing and revising these procedures will cost
approximately $10,057,889 in the first year across all impacted
institutions.
Comments: One commenter estimated costs between $1.5 and $2.4
million for 113 community colleges ($12,500 to $20,500 per institution)
resulting from the proposed regulations because these institutions
would need to review their clock-hour programs to determine which
should be converted into credit-hour programs, as well as update
relevant course assignments, classroom lectures, and learning
materials. This commenter requested an implementation date no earlier
than 2027, noting that curriculum changes require local faculty review,
employer input, and statewide approval which can take approximately 18
months to complete.
One commenter predicted that cost and burden from the proposed
elimination of asynchronous instruction for clock-hour programs would
divert educational resources and disproportionately impact first-
generation, adult, and marginalized students.
Discussion: When developing cost and benefit analysis of proposed
rules, the Department relies on its own data sources, publicly
available data sources, and the administrative experience of Department
staff. In instances where there is a lack of certainty, the Department
may rely, in part, on data or evidence provided to the Department
[[Page 495]]
through public comment on the NPRM. That is why, in section 3.A.3 of
the NPRM, the Department invited comments from the public on its
estimates contained in the NPRM. The Department requested comments to
ensure that the NPRM's estimates accurately reflected realistic
assumptions about the average burdens that the regulations would impose
on affected entities.
As described in the preamble to these final regulations, the
Department has decided not to finalize the proposal to limit
asynchronous clock hour programs from accessing title IV, HEA funds. By
not finalizing this provision there is no longer any burden associated
with this provision in the final rule. It also means the concerns
brought up by the commenters are no longer relevant. The Department
believes that the cost analysis included in the RIA fully considers the
potential costs and benefits of the final regulations based on the
Department's own data sources, publicly available data sources, and the
administrative experience of Department staff.
Changes: None.
Attendance Taking for Distance Education Courses
Comments: We received many comments that stated the Department
underestimated the administrative and financial burden to postsecondary
institutions, including community colleges, by requiring attendance
taking for distance education courses; including the significant
investment in new technologies. Commenters believed that the analysis
was not properly justified and also lacked reference to the negative
impact this may have on other stakeholders like instructors and
students.
Discussion: As discussed in the preamble, the Department is
statutorily required to ensure the proper return of title IV, HEA funds
when a student withdraws before completing a payment period or period
of enrollment. Attendance taking is specifically provided for in the
statute and is crucial for the Department to carry out its statutory
responsibilities. We remain concerned about ensuring that withdrawals
are properly tracked in a fully online environment, where we have
observed that institutions have greater tools available to them for
tracking student engagement than exist when offering in-person classes.
An accurate withdrawal date is critical to ensure that the right amount
of unearned title IV, HEA aid is returned, and students' accounts are
properly reduced. However, we are persuaded by concerns about the need
for continued development in these tools to make them consistently
effective for this purpose, including the need for system
interoperability. As such, we are not finalizing this provision to
provide more time to evaluate technological changes that can better
track student engagement.
Because the Department is not finalizing the provision under Sec.
668.22(b)(3)(ii), the concerns about burden raised by commenters are no
longer relevant. Institutions will not be required to take attendance
in a distance education course unless there are other existing reasons
for why they must do so. As such, there are no added burden costs from
this withdrawn provision. We have updated the relevant parts of the RIA
to remove any burden estimates from this proposed provision.
Changes: The Department does not finalize the proposal under Sec.
668.22(b)(3)(ii) for required attendance taking in distance education
courses. We also removed the associated burden from the estimated costs
of these final regulations.
Distance Education Reporting
Comments: A few commenters claimed that the Department understated
the costs associated with the proposed reporting requirements for
distance education. One commenter further observed that institutions
would pass these costs along to students. One commenter estimate
[…truncated; see source link]Indexed from Federal Register on January 3, 2025.
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