“We Just Disagree:” Department of Education Concludes Negotiated Rulemaking Without Consensus on Student Protections

Last week, the U.S. Department of Education (ED) held its third and final negotiated rulemaking (neg reg) session on program integrity and institutional quality issues. During neg reg, ED convenes higher education stakeholders to review, discuss, and hopefully reach consensus on proposed regulatory changes. (Read our summaries of the first and second work periods to catch up.)

In the final work period, negotiators voted on ED’s proposals covering return of Title IV funds (R2T4), distance education, federal TRIO programs, state authorization, cash management, and accreditation. To receive full consensus approval, proposals needed to receive positive votes or abstentions from all negotiators. Under the terms of neg reg, ED must publish proposals that reach unanimous consensus in a notice of proposed rulemaking (NPRM) that includes a public comment period. Where negotiators do not reach consensus, ED may publish proposals as written or make further modifications based on feedback from the negotiations before posting the NPRM.

Return of Title IV Funds (R2T4)

The R2T4 proposals had minimal changes from the second negotiating session. The only significant adjustment was a carveout for doctoral programs in the requirement for institutions to take attendance for distance education courses. ED made this change in response to concerns raised by one of the negotiators representing for-profit schools, who noted that doctoral students do not regularly interact with their instructors once they are in the dissertation phase of their degree programs. Still, the negotiator representing for-profit colleges cast a vote against the proposal, preventing it from reaching consensus.

Distance Education

In response to language proposed by negotiators representing for-profit colleges and legal aid organizations, ED added a new requirement for institutions to report data on distance education enrollment. ED made no changes to its previous proposal to prohibit asynchronous instruction counting toward total clock hours in clock-hour programs, citing the low-quality, video-based instruction ED’s program review team has encountered in some hands-on training programs.

Negotiators representing community colleges and private nonprofit institutions pointed to the flexibility asynchronous instruction provides students; they cautioned ED about the negative impact this change would have on programs that use technology to provide quality asynchronous instruction. The Department’s negotiator maintained that clock-hour programs must include active student engagement and reiterated the difficulty of ensuring that asynchronous instruction provides the hands-on experiences students need to succeed.

During the consensus vote, negotiators representing public, private nonprofit, and public colleges; financial aid administrators; and business officers downvoted ED’s proposal. Although the language did not reach consensus, student and consumer constituency negotiators expressed support for ED’s changes as a step toward weeding out low-quality online training programs.

TRIO Programs

In its presentation to the main committee, the TRIO subcommittee unanimously recommended that main committee negotiators support ED’s proposal to expand eligibility for three TRIO programs (Upward Bound, Talent Search, and Education Opportunity Centers) to undocumented students. Subcommittee members underscored the commitment of TRIO program staff to serving all first-generation, low-income students – regardless of citizenship status. In their previous discussions, subcommittee members raised concerns that undocumented students will be legally ineligible to receive the direct cash stipends included in some TRIO programs. Despite this statutory limitation, subcommittee members ultimately coalesced around ED’s proposal with the hope that ED and Congress will further invest in, provide resources for, and expand equitable access to TRIO programs.

Several negotiators highlighted the initial success of pilot programs in California and Oregon that allow undocumented students to access holistic TRIO services. The main committee reached consensus and approved ED’s proposal as written.

State Authorization

ED proposed several substantial changes to the state authorization proposal, most based on negotiator feedback. One change would require schools with 500 or more online students enrolled in a state to seek direct authorization from that state instead of relying on a reciprocity agreement. At the start of the work period, ED proposed to require that reciprocity agreements permit participating states to enforce their own laws against institutions enrolling students in that state, rather than allowing the terms of the reciprocity agreement to override state law. ED ultimately limited this proposal to apply only to laws related to school closures rather than all applicable state laws.

Several state agency and institutional negotiators argued that because states voluntarily join reciprocity agreements, the states should decide how these agreements function, rather than ED. They also expressed concern that ED’s proposed 500 student enrollment threshold for direct authorization would unfairly penalize larger institutions by portraying them as inherently riskier. Negotiators representing state attorneys general, legal aid groups, and consumer and veteran advocates supported ED’s initial proposal allowing states to enforce their applicable laws against out-of-state schools. However, some negotiators also urged ED to lower the direct authorization threshold to 200 students to protect a greater proportion of students.

By the end of the session, negotiators representing colleges, state higher education agencies, accreditors, state attorneys general, legal aid groups, veterans, and students still had major reservations about ED’s proposal; some felt the proposal would hamper the effectiveness of reciprocity agreements, while others argued the language would leave too many students unprotected. Although some negotiators issued neutral votes, indicating they could accept but not support the proposal as a whole, no negotiators cast a positive vote and consensus was not reached.

Cash Management

The cash management proposals remained largely the same as from sessions one and two. The only significant change for the third work period was to eliminate a provision allowing schools to automatically bill for books and supplies when schools otherwise may have cited compelling health and safety reasons to do so.

Negotiators had suggested that ED add a provision to the Department’s new meal plan rule. The proposed rule would require schools to refund students for any unspent “flex dollars” from their meal plans at the end of the year. Negotiators, and some public commentators in session two, contended that the rule should include refunds for the cost value of any unused meal voucher credits, as well as flex dollars. ED did not take up these suggestions.

Negotiators representing colleges objected to most of ED’s proposals, arguing that publishers would require automatic billing for textbooks with an opt-out, rather than opt-in mechanism to provide favorable rates for books. ED’s negotiator reiterated the Department’s position that this proposal concerns students' money, and students should have control over how they spend it. With votes against the proposal from the negotiators representing for-profits, HBCUs and MSIs, financial aid representatives, and public colleges, the committee fell short of consensus on this issue.

Accreditation

The accreditation revisions for this session focused on requiring accreditors to have stricter conflict of interest standards for their board members. ED also proposed strengthening accreditation standards requirements for student achievement. The proposed changes would require agencies to choose and set minimum thresholds for measures including graduation and retention rates that colleges would need to meet. The thresholds could be set at a sector level for different types of institutions; accreditors could even create individualized student achievement standards for each institution, in consultation with schools.

ED also proposed requiring schools to explain their reasoning if they do not accept credits from another institution approved by the same accreditor. This change would help ensure that accrediting agencies apply the same quality standards to all institutions they oversee.

Negotiators representing students and borrowers, veterans, consumer and civil rights groups, legal aid organizations, state attorneys general, and financial aid administrators all voted in favor of the proposals, with several noting that the changes would help protect students from poorly performing programs. Accrediting agencies, for-profit colleges, community colleges, and private non-profit colleges all opposed the accreditation changes, with several negotiators arguing that accreditors were already working hard to incorporate better measures of student achievement in their processes. The committee did not reach consensus.

Public Comments

Many of the public commenters throughout the week focused on ensuring that regulatory changes prioritized students. Several current students expressed support for the changes in cash management rules that would give them greater control over how they spend their money on books and supplies. Representatives from multiple state associations of private nonprofit colleges and universities critiqued ED’s state authorization proposal – specifically the administrative burden many private colleges would face if required to seek direct state authorization. Negotiators also heard from both distance education providers who praised the flexibility of asynchronous online programs and veteran students who faced burdensome loan debt and meager job prospects after attending low-quality online programs.

Following the end of negotiations, ED is expected to publish a notice of proposed rulemaking for public comment in the coming months that will include the proposal on TRIO programs on which negotiators reached consensus. To view all materials provided to the committee and the public, visit the Department of Education’s negotiated rulemaking website.