Shoptalk 531, December 1, 2009

Industry Update

Fall 2009 Negotiated Rulemaking on school-related issues is underway, Part II

This fall, the change of season brings beautiful foliage, cooler breezes, and, in an unusual development, Negotiated Rulemaking (Neg Reg). While the Neg Reg process generally occurs during the winter and spring months, this year ED is holding an additional round of negotiations beginning in November and continuing through February. ED has established two committees, or teams, to develop proposed regulations on a variety of issues: Team I is discussing issues relating to school program integrity, while Team II is considering topics specific to foreign schools.

Team I
Team I held its first meeting from November 2-6. The overview below offers a partial summary of the issues discussed; remaining issues were considered in a previous Shoptalk article (see edition 530).

Agreements between institutions of higher education
Should the regulatory provisions on agreements between two Title IV eligible schools be changed to limit the amount of instruction that may be offered away from the "home institution?" If changes to the rules would be appropriate, how should ED approach this to retain sufficient support for beneficial collaborative and cooperative agreements that improve student access and use valuable innovation? Should additional limitations be placed on agreements involving an eligible school and another type of entity? Finally, to what extent should accreditation approval of these arrangements (including curriculum and mode of delivery) be relied upon for ED approval?
Verification of information included on student aid applications
How should the current verification regulations be modified to align with recent statutory changes to the need analysis provisions and with operational improvements in the application processing system, such as the IRS data retrieval process (see Shoptalk edition 530)? Should the 30 percent verification requirement be reconsidered, since it is based on a statutory provision that no longer exists? Using data provided for individual students, should ED attempt to more narrowly focus verification requirements on certain data elements for specific borrowers, as appropriate?

Additionally, how can ED best balance the need to obtain accurate applicant information with the goal of not impeding student access, and how can ED advance FAFSA simplification without creating undue complexity and delays at the school level?
Satisfactory academic progress (SAP)
Should ED modify and strengthen the SAP regulations to ensure that students who are receiving Title IV aid are truly progressing in their academic programs within a reasonable time period? For example, should schools be required to assess SAP more frequently, and should course completion progress or maximum timeframe rules be re-examined? And should a school's policies on probationary periods or appeals be subject to regulation? Finally, should graduate students be subject to appropriate SAP requirements?
Retaking coursework
There are no current regulations that specifically govern retaking coursework, but ED is examining inconsistencies in this area as they relate to the treatment of students who are enrolled in certain clock-hour or nonterm credit-hour programs. Should ED harmonize the treatment for retaking coursework between term-based credit hour programs and other programs?
Return of Title IV funds (R2T4) and term-based programs with modules or compressed courses
ED has previously provided guidance on whether a student is considered to have withdrawn from a standard term-based module program for purposes of R2T4, and has also extended this guidance to certain nonstandard term programs. Should ED modify its policy, which states that a student who completes only one module or compressed course in a term in which he or she is expected to continue attendance in additional coursework is not considered to have withdrawn for purposes of the return calculation?
R2T4 and taking attendance
Are modifications needed to the R2T4 requirements related to taking attendance? For example, should a school be required to use any information it has about the student's actual attendance dates when completing the R2T4 calculation, even if the school is not required to take attendance by an outside entity?
Disbursements of Title IV funds
Should ED establish disbursement rules limiting how long a school may delay disbursing Pell grant funds, to ensure that students have access to those funds within a reasonable timeframe?

Team II
The foreign school issues team held its first session from November 16-20. This team is focused on the following agenda items:

United States Generally Accepted Accounting Principles (U.S. GAAP) financial statements
Should ED modify the financial audit requirements for foreign schools whose enrolled students received $500,000 or more in FFELP funds, and if so, how?
Compliance audits
Should ED modify or waive the compliance audit requirements for foreign schools, and if so, in what manner?
Definition of a foreign school
ED has not explicitly regulated what makes a foreign school "foreign", except that the school may not be located in a state.
Nonprofit status for foreign schools
ED plans to develop a definition of nonprofit status specific to foreign schools that is comparable to the definition applicable to non-foreign schools.
Public foreign schools and financial responsibility
Should ED develop a financial responsibility provision specifically for public foreign schools?
Consolidation of select Title IV requirements on a countrywide basis
To ease administrative burden, are there any Title IV requirements that a country or other government entity should be permitted to satisfy on behalf of multiple foreign schools?
Deferments for eligible non-citizens
This topic was removed from the agenda.
Non-degree programs
Many foreign schools use educational measurements that differ from clock-hour units or semester, trimester, or quarter credit-hour units used in the U.S. How should non-degree programs at foreign schools be treated for purposes of Title IV eligibility?
New eligibility criteria for foreign medical schools
How should ED implement changes introduced by the Higher Education Opportunity Act of 2008 (HEOA) that impose new eligibility criteria for foreign graduate medical schools?
Clinical sites of foreign medical schools in other countries
The negotiators will clarify whether locations of clinical sites of foreign graduate medical schools and foreign veterinary schools (other than those located in the U.S., which is permitted by statute) must be located in the same country as the home school.
Basic science locations of foreign medical schools in other countries
Should locations of basic science classroom medical instruction of foreign graduate medical schools, foreign nursing schools, and foreign veterinary schools be required to be located in the same country as the home school? Should it be permissible for all or part of a foreign medical, nursing, or veterinary school program be contracted out? If so, under what conditions should a school be permitted to contract out such a program?
Eligibility requirements for foreign veterinary schools
Should the regulations provide guidance on determining what constitutes "adequately equipped and staffed" facilities or indicators of the equivalency of faculty members' credentials in teaching veterinary courses, or include different standards to ensure academic quality?
Eligibility requirements for foreign nursing schools
How should ED develop regulations to implement changes introduced by the HEOA regarding the eligibility of foreign nursing schools to participate in the FFELP?
Foreign medical and veterinary schools certified separately from larger school
Should regulations require that all foreign medical, nursing, and veterinary schools be certified separately from any larger school? And should the certification period for foreign medical schools be shortened to three years?

More information
Team I will hold its second session from December 7-11. ED has developed a Team I Web page, available at www.ed.gov/policy/highered/reg/hearulemaking/2009/integrity.html, that includes the Team I list of negotiators, the committee's organizational protocols, and the issue summaries developed by ED (excerpts of which were provided above).

A similar page exists for the Team II committee at www.ed.gov/policy/highered/reg/hearulemaking/2009/foreign-schools.html. Team II will hold its second meeting from January 11-15.

To provide comments on the issues under consideration, please consult the list of negotiators provided on ED's Neg Reg Web page for the appropriate team.

Once the Neg Reg sessions have concluded, ED will publish proposed rules and provide an opportunity for community review and comment. Final rules will be published no later than November 1, 2010, and will be effective July 1, 2011.

Legislative Report

In mid-September, the House of Representatives approved student loan reform legislation — the Student Aid and Fiscal Responsibility Act (H.R. 3221). The legislation now rests with the Senate Health, Education, Labor, and Pensions (HELP) Committee; however, the HELP Committee is one of several developing a health care reform bill. Because the committee's time has been divided between education and health care reform, student loan legislation has been stalled. However, senate committee staff members are working diligently with their House counterparts to draft legislation that will probably differ little from the House-passed bill. Once the Senate has passed its version of student loan reform legislation, a House/Senate conference committee will adjust differences between the two versions. Congress will then most likely approve the compromise bill and send it to the president before the end of the calendar year. If this doesn't happen, the bill will be passed and sent to the president early in 2010. Learn more about the latest legislative developments online.

Closed school corner

The following table provides a list of newly reported school closures and corrections from the Postsecondary Educational Participants System (PEPS) and from the November 2009 Closed School Monthly Report supplied by ED. Schools listed are those with which TG has done business or to which TG has otherwise provided services.

Newly reported closures
OPE School ID	School Name/Address	Unofficial Closure Date	ED's Official Closure Date
00992407	Ivy Tech Community College of Indiana, Anderson - Flagship 7307 Quality Circle Dr. Anderson, IN 46013-1502	N/A	10/07/2009