University regulations and new stimulus package – what it means for higher ed institutions. Federal policymakers are trying to figure out their next steps in relation to higher education in the wake of the pandemic. In addition, these policymakers are continuing in developing and implementing regulations. TEN Government Strategies CEO Tom Netting, a regular guest on this podcast, provides an update on new regulations that are coming online as well as recent and proposed federal legislation, including the CARES Act, which provides short-term financial and policy guidance.
Federal University Regulations
Even as the nation focuses on the coronavirus pandemic, the regulatory environment remains omnipresent. The U.S. Department of Education is focusing on developing a number of new regulations while also overseeing the implementation of regulations.
A number of these rules were deliberated as Neg Reg 2019 and other negotiated rulemaking processes during the past few years and then published in final form on or before Nov. 1, 2019. They officially went into effect on July 1 of the award year due to the master calendar requirement and legislative/statutory requirements.
The Trump Administration has worked on a series of changes and revisions to regulations through the Neg Reg process. These include revisions / overturn rules from the Obama Administration – e.g., Gainful Employment and the Borrower Defense to Repayment rules – as well as the results of recent negotiations about accreditation that blur (remove) the differences between regional and national accreditation, state authorization, teacher/TEACH grants and faith-based education.
University Regulations for Distance Education
There also have been significant changes concerning state authorization and how distance education is being delivered, which is at the forefront of everybody’s mind right now because of the pandemic. In fact, the U.S. Department of Education revised their guidance for distance / online education, including loosening a number of regulations through the end of the fall term.
Some of those revisions deal with long-standing issues related to assuring the quality of online education that were already in discussion prior to the pandemic. One of the key focus areas was regular and substantive interaction between the deliverer (the institution and the academician) and the student. (This came into play in a major way with the Department’s lawsuit against Western Governor’s University that was later withdrawn.)
Policymakers want to ensure that both sides of the learning equation are doing their just part. As part of the negotiations, the department offered more description around what regular and substantive interactions look like, which will provide greater guidance for institutions.
Another major change involved the ways that institutions accounted for their online populations. Online education allows significant blurring about the locations where students are recruited. The regulation changes modify the concept of boundaries while also addressing reciprocity agreements through NC-SARA, which includes all of the United States with the exception of the District of Columbia and California. These changes mean that if an institution is compliant with NC-SARA, it is most likely compliant with another state’s regulations. That becomes important because it ensures that students are protected, no matter the state where they reside, because the underpinnings of the institution’s online education are sound.
This blurring continued with the removal of the distinction between regional and national accreditation. With online education allows students to attend institutions outside of their specific geographic regions the construct of focusing on regional accreditation versus accreditation is becoming moot. It is now focusing on protecting students, many of whom may live in another state or another part of the world. Additionally, this allows accreditors to be more flexible in working with the institutions they recognize to identify and implement better assessments of the quality of their respective missions. There also still needs to be programmatic accreditation to look at certification and licensure levels.
Transparency of the Stimulus Package
The new disclosure requirement also requires all institutions to expressly and publicly state what their transfer and credit policies are. This regulation will allow consumers to have a better understanding while also shedding light on past limitations that have prohibitive to the students
Netting also believes this requirement will also encourage institutions to adopt new and innovative assessment modalities, thus allowing students and their parents to better evaluate the portability of education prior to enrolling in the institution.
The new regulations also require institutions to put critical information on their websites, such as transfer of credit, placement rates, retention rates and student services. This information must be easily assessable and the requirements specify critical details, such as font sizes. This will change areas required in accreditation as well as the consumer’s understanding of the cost-benefit of high education.
The Department is also revamping a number of areas, including NextGen, the next generation of federal financial aid. They have totally revised StudentAid.gov, the student/consumer-facing side that provides students with more information and how to make their decisions prior to making their college choices. Additionally, the Department is offering more opportunities for students to interact with the loan servicers to enable more financial literacy education for students. This will help students understand more about their loan and how it differs from a grant. The department is now starting to work on the backend portion of NextGen, which involves the delivery of financial aid.
The pandemic’s pressing issues and the resulting the CARES Act and have meant that many higher education issues and discussions have been moved to the side. With that said, many policymakers and higher education leaders are dealing with both, thus having to “walk and chew gum at the same time.”
The CARES Act spread $14 billion across the higher education community with significant stipulations. These included that the funds must be used in relation to the national emergency created by the pandemic and were to be delivered to individual students as well as the institution so it could move to distance education. As part of this, institutions had to develop a plan of delivery of funding to the students who were most disrupted and most in need, such as those on federal Pell Grants. Conversations are on-going in relation to DACA students, who did not receive any of these initial funds.
Congress also allowed institutions to use any remaining money to the institution to support students. However, a number of institutions didn’t receive as much of an allotment as they needed; these institutions—primarily state colleges and universities, community colleges and others–would have preferred to have funding based on total enrollment and total population, as opposed to the priority being the need-based populations.
Additionally, loan-payment relief was given to students through the end of the year. This eliminates all negative consequences in relation to eligibility and repayment.
Discussions about a New Stimulus Package and
Congress began discussions in June about the next round of stimulus package funding, although the political parties have differences on where to target the funding.
While the Republicans want these funds to go toward healthcare, education, and job retraining/advancement, they believe a significant portion of the funding should be used to help people safely transition to education or jobs/employment. This would involve testing individuals for COVID prior to returning to work as well as fair distributions of vaccinations once they are available.
The Democrats are looking at providing money for state colleges, state universities, community colleges, and other institutions, as well as using an equation that focuses on the total population served (as opposed to need-based funding). The House Democrats voted in a major stimulus package called the HERO Act that would provide significant directed funds to higher education and elementary and secondary education. Sen. Patti Murray (D) also introduced the Coronavirus Childcare Corrections and Educational Relief Act (CCCERA), which would provide significant funding for all sectors of higher education. One of the key differences between the House Democrat version and the Senate Democrat version is the House bill does not include private or proprietary institutions while the Senate bill includes for-profit institutions. Additionally, the Senate version counts individuals who were taking only online education, regardless of institution.
The major sticking point to the passage of another stimulus package is a liability. Republicans believe there should be liability protection included in the bill, and that those protections should extend to employers and institutions.
The future challenge, however, is that these various stimulus packages will eventually create a societal financial burden that will weigh down the individuals who are current students who will benefit from these packages.
Three Areas for Higher Education Leaders to Watch in University Regulations
Netting encouraged higher education leaders to watch for these three upcoming issues:
- Another set of university regulations took effect in mid-August. These are very contentious regulations that are tied to Title IX. Those who support these new university regulations believe there is a more equitable approach in relation to both the victims and the accused. However, victim rights advocates see these guidelines in the opposite light. Look for additional guidance from the Department of Education on how these guidelines will come forward.
- The Department also will be providing additional guidance on the CARES Act, even though the funds have been delivered and expended. There are continued questions as to how far institutions can go in using these funds. There’s also a question about lost revenue, especially for Title 3, Title 5 and Title 7 institutions.
- The next round of CARES Act may be coming soon. Congress may try to finish this legislation before the August recess. This legislation probably will include liability issues as well as funding for students and institutions. Netting said he is working with federal legislators and their staff to try to clean up issues that emerged in relation to the previous CARES Act, such as financial responsibility and student leaves of absence that resulted from their inability to do internships, etc., that are consequences of the pandemic.
- A number of new university regulations started July 1. These include revisions to rules set during the Obama Administration–the gainful employment rule and the borrower defense to repayment rule—as well as recent negotiations about accreditation, state authorization, teacher/teach grants and faith-based education
- State authorization and distance education also are changing. These changes focus on ensuring the quality of online education (which has been increasingly important in the wake of the pandemic) and flexibility of boundaries that allow students to attend online programs from institutions in other regions or states.
- The new disclosure requirement requires all institutions to expressly and publicly state what their transfer and credit policies are. The new regulations require institutions to put critical information on their websites, such as transfer of credit, placement rates, retention rates and student services.
- The Department is revamping a number of areas, including NextGen, which is the next generation of federal financial aid. This revision will encourage more transparency in relation to student loans and also focus on providing more financial literacy education.
- The CARES Act spread $14 billion across the entire higher education community to be used in relation to the national emergency created by the pandemic. These funds were earmarked to support individual students as well as the institution so it could move to distance education. However, a number of institutions didn’t receive as much of an allotment as they needed; these institutions would have preferred the use of a different funding equation that was based on total enrollment and total population.
- Loan payment relief through the CARES Act eliminates all negative consequences in relation to eligibility and repayment.
- Congress began on-going discussions in June about the next round of stimulus funding, although the political parties have differences on where to focus the funding. However, the major sticking point is liability protection, which the Republicans support.
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