Washington Update: Neg Reg 2024 March Review:

Changing Higher Ed Podcast 201 with Host Dr. Drumm McNaughton and Guest Tom Netting

Table of Contents

Changing Higher Ed 201 Washington Update- Neg Reg 2024 March Review
Changing Higher Ed Podcast | Drumm McNaughton | The Change Leader

April 2, 2024 · Episode 201

Washington Update: Neg Reg 2024 March Review

38 Min · By Dr. Drumm McNaughton

This Washington Update discuss the latest Neg Reg 2024 sessions on distance education, accreditation, Title IV funds, Cash Management, and more.


Negotiated Rulemaking: Program Integrity and Institutional Quality Committee

In this Washington Update, we welcome back our frequent guest and public policy expert, Tom Netting, president of TEN Government Strategies, who joins us to discuss the latest developments in higher education policy coming out of Washington. As U.S. policymakers continue to maintain a frenetic pace in 2024, higher education leaders must stay well-informed about new regulations, negotiated rulemaking (Neg Reg), leadership changes at the Department of Education, and shifting perspectives on issues that impact higher education. 


Neg Reg 2024 March Consensus: One Out of Six

The first quarter of 2024 has been dominated by three intense sessions of federal negotiated rulemaking (Neg Reg), officially named the Program Integrity and Institutional Quality Committee. This committee tackled a wide range of issues crucial to the future of higher education. Out of the six major topics addressed, consensus was only reached on one: TRIO programs, where grant assistance access was expanded for students, particularly immigrants.

The successful negotiation on TRIO programs demonstrates the potential for positive outcomes when subcommittee work aligns with the priorities of the full committee. Expanding access to these vital programs will open doors for countless students who may have otherwise faced barriers to higher education.

However, the lack of consensus on the remaining five issues underscores the complexity and contentiousness of the regulatory landscape. These unresolved topics will now move forward without the benefit of broad stakeholder agreement, leaving more room for interpretation and potential pushback as the process unfolds.

The Five Issues Where Consensus Was Not Achieved

  1. Cash management
  2. State authorization
  3. Distance education
  4. Return to Title IV funds
  5. Accreditation (a complete rewrite of all regulations)


Each of these issues generated polarizing positions among negotiators, reflecting the high stakes and divergent perspectives at play. The Department of Education, tasked with crafting language that balances competing interests, often struggled to reconcile their stated intent with the proposed regulatory wording. This led to extended, nuanced debates over specific terms and phrases, with negotiators vying to shape the final rules in ways that would benefit their constituencies.

The cash management discussions, for example, examined the granular details around textbook costs, tuition and fees, and third-party agreements. Negotiators grappled with how to structure these financial elements in ways that protect students while maintaining institutional flexibility. Similarly, the accreditation overhaul sparked heated exchanges about the proper role and scope of accrediting bodies, with some arguing for more prescriptive standards and others defending the need for autonomy.

Distance education emerged as a particularly contentious issue, with proposals that could dramatically reshape the online learning landscape. From changes to NC-SARA governance to new mandates for clock-hour programs, the debate reflected the growing complexity and significance of distance education in the post-pandemic era.

Across all five topics, the lack of consensus speaks to the difficult balancing act facing policymakers and higher education leaders alike. With so much at stake for students, institutions, and taxpayers, finding common ground will require ongoing dialogue, compromise, and a shared commitment to educational quality and accessibility.


Clarity Around Consensus, Non-Consensus, and Notice of Proposed Rulemaking

Understanding the negotiated rulemaking process is essential for higher education leaders. When consensus is reached on a given issue, the agreed-upon language becomes the basis for the published regulations. This is a powerful incentive for negotiators to find common ground, as it ensures their priorities are reflected in the final rules.

However, in the absence of consensus, the Department of Education has the authority to publish regulations based on its own judgment after considering public comments and transcripts. While it typically incorporates elements of the negotiations and makes certain compromises, it is not obligated to adhere to any specific position advanced during the rulemaking sessions.

This is why the upcoming Notices of Proposed Rulemaking (NPRM) are so critical. Expected to be released in the summer of 2024, these NPRMs will provide a 30-60-day window for public comment. Higher education leaders, associations, and other stakeholders will have the opportunity to weigh in on the proposed language and advocate for changes before the rules are finalized.

The Department is aiming to publish final regulations by the November 1 master calendar deadline, which would make them effective for the following award year. This compressed timeline means that institutions will need to be proactive in analyzing the proposed rules, assessing their potential impact, and engaging in the comment process to shape the outcome.


Distance Education, Accreditation, NC-SARA, and Cash Management


Distance Education and NC-SARA

Among the many complex issues tackled during the March 2024 neg reg sessions, distance education emerged as a focal point. With the rapid growth of online learning in recent years, policymakers are grappling with how to ensure quality, consistency, and accountability across state lines.

One key proposal centered on the National Council for State Authorization Reciprocity Agreements (NC-SARA), which provides a voluntary, interstate framework for distance education regulation. Negotiators debated changes to NC-SARA’s governance structure, with some arguing for a more state-centric approach and others defending the need for national consistency.

The Department also put forward new mandates for online clock-hour programs, which could significantly impact institutions in fields like allied health and technical education. These proposals aim to ensure that students in competency-based programs receive adequate instruction and support, but some worry they could stifle innovation and flexibility.

Another contentious issue was the proposed requirement for institutions enrolling more than 500 students from a single state to obtain authorization from that state. This could create significant administrative burdens for large online providers and potentially limit student access to certain programs.

Across these distance education issues, negotiators struggled to find the right balance between necessary oversight and undue restrictions. While there was broad agreement on the importance of protecting students and ensuring quality, opinions diverged on the best ways to achieve those goals in an increasingly complex and interconnected higher education landscape.



The Department’s proposed changes to accreditation rules in Part 602 represented a complete rewrite of the regulations, aiming to strengthen the role of accreditors in monitoring institutional quality and financial stability. The proposed language sparked considerable discussion and pushback from accreditors and institutions.

One major point of contention was the Department’s attempt to stipulate accreditation standards, particularly in sections 602.19, 602.20, and 602.21, which cover pre-accreditation and regular accreditation standards. The statute clearly states that the Department lacks the authority to direct what standards an accrediting body puts forward. Accreditors, both programmatic and institutional, challenged the forcefulness of the proposed standards, arguing that they went too far in prescribing specific processes and could undermine their autonomy and expertise.

The role of NACIQI (National Advisory Committee on Institutional Quality and Integrity) in overseeing accreditors also came under scrutiny. There has been greater enforcement and questioning of accreditors’ performance by this oversight body, with a focus on reviews of various accrediting agencies such as SACS, HL, ACICS, and ACCSC. The proposed changes to the regulations would build on this enforcement mentality and increase oversight of the accreditors themselves.

Concerns were raised about the politicization of NACIQI, as its members are appointed by both Democrats and Republicans in Congress (three each from the House and Senate). Some worry that the body has become too political and may start forcing its opinions on institutions and accreditors. There appears to be a difference of opinion between the Department staff, who have given some organizations full five-year recognitions, and NACIQI itself, which has subsequently given shorter lengths of re-recognition to those same organizations.

Accreditors and institutions pushed back against the proposed changes, arguing that they infringed upon their roles and responsibilities. Some student groups, such as the Legal Aid Society, supported the changes as a means to protect educational quality for students.

The negotiations highlighted the ongoing debate over the role of accreditation and the responsibilities of the entities overseeing it as part of the triad (accreditors, state governments, and the federal government). The proposed changes have raised questions about the direction of accreditation oversight and the balance between compliance and academic review.


Cash Management, Tuition and Fees, Books and Supplies

The Department’s cash management proposals aimed to exclude books, supplies, and other educational equipment from tuition and fees. They sought to make this an opt-in process each payment period or enrollment period, requiring institutions to obtain prior approval from students and/or parents for purchasing these materials.

This proposed change sparked discussions around the benefits of current practices, such as bundling by publishers, online availability, and pre-assembled kits for career, vocational, and trade programs. Institutions argued that the proposed opt-in process could create administrative burdens and potentially limit student access to necessary materials.

Another significant proposed change involved the removal of fees for Tier 1 and Tier 2 agreements between institutions and lending or finance communities, impacting third-party collaborations on services like bank cards.

Lastly, the regulations would require institutions to allow students with surplus or remaining balances on their meal plan cards to either roll over the funds or be reimbursed in cash at the end of each payment period or enrollment period. This change could create administrative challenges for many institutions.

While these cash management proposals were framed as consumer protection measures, some negotiators argued that they overlooked the efficiencies and benefits of current practices. Institutions expressed concerns about the administrative burdens and potential unintended consequences of such granular regulations.

The lack of consensus on these cash management issues reflects the ongoing tension between student protection and institutional autonomy in the higher education sector. As the regulatory process moves forward, leaders must stay engaged and advocate for policies that balance accountability, flexibility, and student success while considering the practical implications of these changes.


Why Higher Ed Leaders Need to Stay Involved in Neg Reg

With so much at stake in the current regulatory environment, it is imperative that higher education leaders remain actively involved in the negotiated rulemaking process. The issues on the table have the potential to reshape higher education for years to come, and the voices of presidents, trustees, and senior administrators are essential to ensuring that these changes are informed by on-the-ground realities.

One key avenue for involvement is through public comment periods, which allow stakeholders to provide feedback on proposed regulations before they are finalized. By submitting detailed, data-driven comments, higher education leaders can help policymakers understand the potential impacts of their proposals and suggest alternative approaches where appropriate.

But engagement should not stop there. Leaders should also be communicating regularly with their representatives in Congress, educating them about the real-world implications of proposed policies and advocating for their institutions’ needs. Building strong relationships with policymakers can help ensure that the higher education perspective is considered throughout the legislative and regulatory process.

Even after new regulations are published, advocacy efforts can shape how they are implemented and enforced. By working collaboratively with the Department of Education, accreditors, and other stakeholders, higher education leaders can help develop practical guidance and best practices that support compliance while minimizing unintended consequences.

Ultimately, staying engaged in the neg reg process is about more than just protecting institutional interests. It is about ensuring that the higher education system as a whole remains responsive to the needs of students, communities, and the nation. By bringing their expertise and leadership to bear on these critical policy discussions, higher education leaders can help build a regulatory framework that supports innovation, equity, and excellence for all.


What’s Happening on The Hill

While Negotiated Rulemaking is a key focus for higher education leaders, it is not the only policy arena demanding attention. In Congress, several major bills are moving through the legislative process, each with the potential to significantly impact institutions and students.

One of the most closely watched is the bipartisan year-round Pell proposal, which would expand Pell Grant access for short-term programs. The bill aims to provide more flexible funding options for students pursuing career-oriented education and training, recognizing the growing importance of these pathways in today’s economy.

After passing out of committee with broad support, the proposal hit a snag when some traditional academic groups raised concerns about the inclusion of for-profit institutions and potential unintended consequences. While the bill’s sponsors are working to address these concerns, the delay underscores the challenges of building consensus around major policy changes.

Another significant piece of legislation is the Making America Stronger Act, which would reauthorize the Workforce Innovation and Opportunity Act (WIOA). This bill, which passed out of committee unanimously, aims to modernize and strengthen federal workforce development programs, with a particular focus on aligning education and training with industry needs.

If enacted, the Making America Stronger Act could create new opportunities for higher education institutions to partner with employers, develop innovative curricula, and expand access to work-based learning. However, the bill’s progress may be slowed by broader debates over federal spending and the appropriations process.

On the more controversial side, the College Cost Reduction Act proposes a “mini-HEA reauthorization” focused specifically on student loans. The bill, introduced by Republicans, would significantly reduce the number of loan options, eliminate many loan forgiveness programs, and add new earning requirements for borrowers.

Supporters argue that these changes would simplify the loan system, reduce administrative costs, and protect taxpayers from excessive loan forgiveness. However, critics worry that they could limit access to higher education for low-income and underserved students, who rely disproportionately on federal loans to finance their degrees.

Finally, the 100 Percent Rule and Clock Hour Program Student Protection Act is a narrower but still significant proposal aimed at supporting students in certain career-oriented programs. The bill would restore the 150% timeframe for programs leading to licensure or certification in fields like allied health, beauty/wellness, and the trades.

This change would give students more flexibility to complete their programs and gain necessary skills, rather than being limited to a strict 100% of the state-mandated hours. While the bill has not yet been formally introduced, it reflects ongoing efforts to balance program integrity with student success in the career education space.


Title IX Revisions

No discussion of higher education policy in 2024 would be complete without mentioning the anticipated revisions to Title IX regulations. After several delays, the Department of Education is now expected to release its proposed rules before July 4th.

While the specifics remain unknown, experts anticipate that the new regulations will represent a significant shift from the Trump-era approach, which focused heavily on due process rights for accused students. The Biden administration has signaled that it will place greater emphasis on supporting survivors and addressing systemic barriers to reporting and resolution.

However, striking the right balance between fairness and accountability will be a challenge, given the deeply polarized views on this issue. Higher education leaders will need to carefully review the proposed regulations and consider how they would impact their institutions’ policies, procedures, and campus climate.

Regardless of the specifics, it is clear that the Title IX revisions will be a major focus for the higher education community in the coming months. Institutions will need to be proactive in assessing their current practices, identifying areas for improvement, and engaging in the public comment process to shape the final rules.


Final Thoughts for Higher Ed Leaders on Neg Reg 2024 March Sessions Wrap-Up

The March 2024 Negotiated Rulemaking sessions have concluded, leaving higher education leaders with a range of critical issues to address. The proposed regulations, spanning distance education, accreditation, cash management, and Title IV funds, could significantly impact the future of higher education.

To effectively respond to these changes, leaders must:

  1. Stay informed about proposed rules and their potential impact on institutions and students.

  2. Actively participate in public comment periods to advocate for necessary changes.

  3. Prepare for implementation by educating and supporting key stakeholders, such as financial aid offices and IT departments.

  4. Foster collaboration across institutions, sectors, and regions to shape policies that promote innovation, equity, and excellence.


Organizations like The Change Leader, with their expertise in higher education strategy, can support institutions in navigating regulatory complexities and developing plans that align with their missions and values.


About Our Podcast Guest

Tom Netting

Having spent all of his professional career devoted to higher education policy oversight and implementation, Tom Netting has an extensive knowledge of the laws and regulations governing all aspects of higher education. His considerable background and experience have afforded him the opportunity to view the development and implementation of federal higher education and workforce development policy in their entirety – including issues related to higher education and workforce development, health care, veteran affairs policies, and the procurement of federal appropriations.


About Our Podcast Host

Dr. Drumm McNaughton is a consultant to higher education institutions in governance, accreditation, strategy, change, and mergers.


Transcript: Changing Higher Ed Podcast 201 with Tom Netting

Washington Update: Neg Reg 2024 March Review

Program Integrity and Institutional Quality Committee: Negotiated Rulemaking Q1 2024

DLW: Welcome to Changing Higher Ed, a podcast dedicated to helping higher education leaders improve their institutions with your host, Dr. Drumm McNaughton, CEO of The Change Leader, a consultancy that helps higher ed leaders holistically transform their institutions. Learn more at changinghighered. com. And now here’s your host, Drumm McNaughton.

Drumm: Thank you, David. Today we welcome back Tom Netting, president of 10 Government Strategies, and our frequent guest who does our Washington Update. Tom has worked in the public policy arena for over 28 years, advocating before Congress, federal agencies, and state governments on behalf of private institutions of higher education and post-secondary education companies.

Tom’s an expert when it comes to public policy and higher ed. And he joins us today to give us an update on what’s going on in Washington and at the Department of Education. Tom, welcome back to the program.

It’s been a long time, my friend.

Tom Netting: Drumm, it has been a while, but I am happy to be back and it’s a pleasure to talk to you.

Drumm: And you as well, gosh, there’s been so many different things going on. I know you’ve been busy in a one-armed paper hanger with the hives.

Tom Netting: I’ll tell you what, there’s lots going on.

Drumm: So, let’s just jump right into it.

A lot of the folks that I speak with are real interested in what’s going on back in Washington. So, let’s just kick right off with the Neg Reg 2024 that just wrapped up. And they got consensus on one out of, What, 120 issues? No, I’m just kidding. Consensus on one out of seven, I think.

One out of six?

Neg Reg 2024 Q1: Program Integrity and Institutional Quality Committee

Tom Netting: One out of six. Again, you talked about the start of the year. That has certainly been the first quarter of the year has been those three sessions on federal negotiated rulemaking. Program Integrity and Institutional Quality Committee was the official name. We had another little part of student loan debt relief slid in there in February as well to talk about hardships, but with regards to the predominantly institutional quality and program integrity, the 6 major issues included trio, which is the area where consensus was achieved on behalf of students and in particular, immigrants.

The opportunity for access to grant assistance was expanded. So, a good issue there and one that you could readily see the work of the subcommittee come through to the full committee and support.

The Five Issues Where Consensus Was Not Achieved

The five issues that consensus was not achieved included a pretty heady set of issues. Cash management was issue number one.

Issue number two was state authorization. Issue three was distance education. Issue four was returned to title four funds and issue five was accreditation and a complete and full rewrite of all of accreditation. Like I said, a lot of issues to deal with.

Drumm: So, let’s run down before.

Because this is fascinating for me is how these committees work. When Neg Reg starts, they’ve got papers. They bring to the public and the public entities who work in education and say, this is what we’re thinking about doing to enforce the regulations or interpret the regulations. They get a group of folks, for profit, nonprofit, public, private education, state folks, et cetera, et cetera, to come together.

And when they publish these papers, they have to reach consensus on that consensus means no negative votes, at least one positive, and everybody else has to abstain. Does that is that about right?

Tom Netting: It’s about right. They start out Drumm more often than not with a list of questions. They know the general direction the department wants to go in, but they do entertain going into the first session.

A number of questions, which are kind of leading them in or potentially not leading them in the direction of where they want to go to your overarching point. Yes. The process is 1 where consensus can be done. 1 of 2 ways. It can be on the entire package. Or it can be on issue by issue. In the past they’ve broken down under the student debt relief proposals.

They did it on each individual issue. In this round of negotiations, they did it on the entire package. There are obviously pros and cons to doing both. If you do each individual section, you can get consensus on pieces, but not the overarching package, which is what happened on student debt. With regard to these proposals under program integrity and institutional quality since they did issue papers Comprehensively, it was one up or down vote.

That’s one of the reasons why five of the six went down to opposition.

Why is Neg Reg Important to Presidents, Boards, and Executive Levels of Higher Ed?

Drumm: and tell folks as you know, our audience is presidents and boards and People in high levels of education. Why is neg reg important to them?

Tom Netting: Well, Neg Reg is important to them because it’s an opportunity for the community.

You talked about the representatives around the table. The statute requires 14 different groups to be involved in almost all Neg Regs and it ebbs and flows from that in terms of the number of individuals that are around the quote unquote negotiating table or virtual table these days with virtual negotiated rulemaking.

It includes all of the individuals that you would expect from the higher ed community, the different facets of higher education, accreditation. Both accreditation at the institutional and the programmatic level, which was tantamount to importance around these issues in particular. States Attorneys General have often been invited, definitely always include student representatives, also representatives from Legal Aid Society and other student groups that have and are concerned with areas of oppression or areas of fraud and abuse that they have witnessed and been involved in their processes of litigation.

All of which come to the table to try and, again, discuss, very lengthy and very detailed issues. As you can imagine, when you start to put a group like that together, you have some very poignant views, pro and con to each individual issues. The reason it’s because it’s so important is because these are issues that affect the delivery of education by institutions, but also the back end is by the Department of Education and the Triad.

How Words Matter in Neg Reg: Paying Close Attention to Revisions

Drumm: And if an issue reaches consensus, that’s the way it gets published.

Tom Netting: If an issue were to reach consensus, yes, exactly as the language. And that’s why this becomes such an important process. Words matter and going through the regulations and going through revisions to the regulations, a “must” versus, and a “shall” versus a “may” is a major difference.

That’s why you see a lot of attorneys on behalf of all of the different communities at the table and others, because these words then get interpreted and then get enforced by the various different groups. So all of this is it’s leading to administrative responsibilities across the entire spectrum.

Which is why it’s so important, and again, compliance, to make sure that the intent is understood. That the differences between what somebody says their intent is and what you’re seeing in actual verbiage is major grounds and fodder for discussion. On several different points, that’s what it came down to.

The department was saying that their intent was X. But representatives from both sides were saying, but that’s not what the language that we see in front of it says, can we tweak this word or can we change this paragraph or this phrase so that it better meets and emulates what you’re saying your intent is?

Because if not, it could go too far or in some views it could go not far enough. And I’m sorry if that’s getting a little bit into the weeds, but that’s what negotiated rulemaking is at its core. It’s getting into the weeds of what regulatory compliance looks like to be enforced by all three members of the triad.

And that’s, a lot of what was discussed. Accreditation, as I said, was one whole issue. State authorization and the desire of the department to look to states to do more in general, but definitely in the area of distance education and understate authorization for reciprocity agreements. Looking at institutions that are clock hour providing asynchronous educational instruction And then a number of other issues with oversight were certainly one of the major focuses.

Clarity on Consensus Vs. Non-Consensus for Rulemaking

Drumm: so Just to wrap the piece up about consensus versus non-consensus if they don’t reach consensus Then the department after putting something out for public opinion and public response.

They can go ahead and publish whatever it is they want to do. Is that correct?

Tom Netting: That’s correct. You would hope, and past has shown, that the department does take into consideration all of those negotiations and all of the potential changes that have come about and the compromise or concessions are the words that are sometimes used around the table by the department or by different parties that have proposed portions of the language.

But yes, at the conclusion of the negotiations, if in fact the negotiators fail to achieve consensus, which is one of the reasons to try and drive consensus, because then, the language that is in front of you at the end of the process.

But if that is unable to be obtained, then the department is provided the opportunity to go and take all of the transcripts and all of the time and all of the prior drafts and all of the questions that started the process and develop what they choose to put forward as a notice of proposed rulemaking.

We’ve witnessed this over the last two years, Drumm, on so many other issues and so many other negotiated rulemakings that we talk about. The process from here, which will probably be your next logical question, is the notices of proposed rulemaking will come out from the department, probably sometime in the summer, on both sets of issues, student loan debt relief, as well as these institutional requirements, and be looked to be responded to by the community over a 30 16 day comment period for the desire by this administration Thank you.

To publish them as final rules on or before November 1st of this year, which is the master calendar deadline and other statutory provision that says any regulation that is under title four. That is to be completed for the upcoming award year has to be posted by no later than November 1st of the previous year.

So, we’re going to be looking for all of these issues to come forward as NPRMs, vernacular we all know, probably sometime in June, July, and then have an August response period and look for final regulations by October 31st, November 1st, as we all know. Was last year we had October 10th on GE and then the rest of them on October 31st.

Major Points from Neg Reg Q1 2024:

Distance Education, Accreditation, NC-SARA, and Cash Management


Drumm: Well, thank you for answering the question before I asked it because that was going to be where I was going. So let’s just touch on the major points from the Neg Reg, you talked about a couple of them, the distance education the accreditation Implications to NC-SARA

Tom Netting: one of the biggest issues there were two others I want to make sure we touch on textbooks and the issues with regard to tuition and fees versus book supplies and other information, which was cash management. Sorry, sequentially, that was part of cash management, which was number one. So I think of those first, but let’s go with distance education.

Distance education stemmed literally two to three different portions of the issue papers. The highlights, the major, major issues are, there were initially two proposals by the department to address NC-SARA, the national process by which a baseline set of standards has been provided for online education.

The initial proposals were to modify the administration, the actual individuals responsible for the operations of NC-SARA to only include state officials. So to take outside entities, including the institutions, out of the process. Again, for those of you who are familiar with NC-SARA and the process, this has included governors and literally all of the states, including California, having been ultimately involved in the process, and all of the states, with the exception of California, adopting these set of standards.

While they’re asking for the states to have greater control, And candidly, the department is also kind of pushing the issue of the states doing a better job of enforcement. The states will come back with, they’re doing the best they can. That’s one of the reasons for these standards is because there is an economy of scale.

Not all states have the same bandwidth, the same resources, and the same staffing to do the same level of oversight. Which is why bringing these standards was beneficial in their view.

Long story short, the major changes to distance education include everything from requiring, as I said, the NC-SARA process to go through a significant number of changes, both in terms of its operations and its construction, to also the standards that they use to review all of the institutions department of education would propose that all solely online programs would have to take attendance.

This is a tip to concerns about the integrity even this many years in arrears over who is actually completing the programs and ensuring a greater opportunity to ensure that the students are the in fact the students. Some of the other major changes include requiring state laws can still be enforced which is capable of being done but in the interest of consumer protection that greater emphasis is placed on allowing the states to intervene.

The two other major issues that are of concern that brought forth a great deal of discussion. One is a limitation under issue paper three, which regard to quote distance education, unquote, where the department looked to take away the granting of asynchronous educational delivery for online education providers that are providing programs in clock hours.

This was an addition that was provided in the 2019 negotiated rulemaking, but the department believes that there is a need to withdraw or repeal that opportunity when queried about the rationale. They pointed to one or two and limited anecdotes, but said that their concern was with the trending of this post COVID, but really couldn’t show a lot of defense for their desire there.

And that has significant implications for a number of different disciplines. , thinking once again, about the students and the disciplines that are provided for those educational programs across a number of different schools. And last, but certainly not least, there was a considerable, considerable discussion.

Around if, in fact, an institution had 500 or more enrolled students from a specific state that they would have to also acknowledge and become recognized and registered in that state. There are those that want to push that number well lower, believing that 500 is too high of a bar and think that the numbers should be closer to around 100 to 200.

Again, this gets back to the more you get to these circumstances where the state has to meet the individual requirements of the state in totality, as opposed to the NC-SARA Reciprocity Agreements. It takes more man hours, it takes more administration, it takes more responsibility. Not that that’s necessarily a bad thing.

Some people believe that is exactly the way things should be. Others believe that if you can show a continuum of the ability to delivery across all states that you’re meeting the standards and meeting the bar.

Drumm:  So, bottom line on this distance education state authorization piece was nobody has to positive vote.

There were multiple abstentions.

Tom Netting: There were some that cast a positive, or as you said, Drumm, did basically a sidebar, which is not thumbs up, not thumbs down, but kind of in the middle. The interesting part is the two major factioning sides, if you will, the institutions and the states and others, said no because of what in their view is the over regulation that would come.

The individuals that are looking for this, Also voted no in some respects many of them voted yes, but some voted no because they still didn’t think that it went far enough in terms of student protections and the like So again, one of the areas where the majority of individuals at the negotiating table said no.

Drumm: and I can understand completely why they did if the states have bought off and they still buy off on NC-SARA.

They agree with that. Why should they have to go above and beyond that? From a bandwidth perspective, from a regulatory perspective, to me, it’s, it’s too much.

Tom Netting: And again, you’re absolutely right. But to be fair, to the other side, we’ll contrast that.

We’re still seeing concerns about abuses or circumstances that happen within distance education community, where the students, especially if you’re talking legal aid or others, we’ll talk about students who do not feel that they receive the quality of education, for whatever reasons, through online education.

And this isn’t all sectors of the higher ed community. There are, obviously hot buttons within this, but you know, the reality is across all sectors, there are still concerns.

So, you have both sides with legitimate and very passionate issues that they’re bringing to the table as they should.

Hence what Neg Reg is all about. And that’s what makes trying to come up with a consensus driven proposal so hard. What I can tell you is that in these circumstances, it very much seemed as though the department was leaning towards legal aid society and concerns and attempts to, again, further regulate in this area as opposed to not.

Drumm: It seems like the department has moved more into the area of consumer protection.

Tom Netting: It was a major conversation consumer protection those words that term came up quite a lot. I think it’s also, again from them, they also always still do think about this in terms of the students as we all do and as we should, but again, in the interest of students, they continue to believe that maybe there needs to be, my word, not theirs, but it sure felt like there was an attempt to put the bit in the mouth and the bridle in the hands of individuals that are looking to draw back a little bit on distance education.

Drumm: Makes sense. Let’s move on to accreditation.

Tom Netting: accreditation, literally a complete and utter rewrite of part 602 Which is accreditation everything from the again the makeup of the accrediting body itself And who are public members which got into a considerable discussion? One of the major areas that you could imagine was a great discussion.

The statute is very clear that says that the Department of Education doesn’t have the authority to direct what standards an accrediting body comes forward with. And yet in a lot of the pre-accreditation and accreditation standards section, I won’t bore you with the numbers, but you know, section 602, 19, 20, and 21.

If you want to go look at where a lot of those standards are developed and discussed, both from pre-accreditation to regular standards. And the department is pushing very hard on a lot of prescription there. So much so that both the programmatic accrediting bodies as well as the regional national, although they don’t bear those titles anymore, the accreditors that are institutional, all challenged as well as the institutions, the forcefulness with which the standards were trying to be stipulated by the department and by other people looking to add on to what is being proposed by the department as importantly, if not more so.

And Drumm, we’ve talked a lot about how NACIQI, the National Advisory Committee on Institutional Quality and Integrity, oversees the accreditors, and a great deal of focus on NACIQI’s review and evaluation of SACS, HL, as well as ACICS, ACCSC, the alphabet soup of all the accreditors. Alphabet soup, yep.

And again, without boring anybody on what all of those mean, the reality is that there has been greater enforcement and greater questioning of the role of the accreditors in doing their job by the oversight body. These standards and the changes to these regulations would build on that enforcement mentality and questioning of and oversight of the accreditors themselves.

As you might imagine, there was pushback by all of the accreditors on the degree to which the standards were being changed on what they were to do and how they were to do it, as well as how the oversight entities would then judge them when they were to come in front of the bodies as well. The accreditors and the institutions were on one side of this particular set of issues, and a lot of other people abstained because it was truly an issue for them.

You did have, again, Legal Aid Society and some of the student groups voting for this, viewing it as ways in which to further protect oversight and the integrity of the educational quality for students.

Drumm: Well, you know, NACIQI has become a political body. It’s no surprise because you’ve got Democrats and Republicans from Congress, both sides appointing members.

Is there a concern that it’s going to become too political and start forcing its opinions, political opinions on institutions and accreditors?

Tom Netting: I think that that ship has sailed, to be quite honest. But yes, there is a great deal of questioning of the positioning of individuals that have been placed on the NACIQI.

You’re absolutely right that six of the spots are brought forward. I believe it’s three, six, nine, twelve of the spots are because it’s Three from democrats three from republicans in the house and three from democrats three from republicans in the senate And again, those are all the different members that are part of it So yes, it has become somewhat of a politically laden body.

The reality is that some of this as well is a difference of opinion between the department and the, meaning the staff at the department and its oversight and review, and then the body itself and the direction the body seems to want to be going. You’ll recall that many of the entities, the different organizations, accrediting bodies that have subsequently been given shorter lengths of re recognition, were given good housekeeping seal of approval for a full five years by the staff and by the review process itself.

Was only once it got to the NACIQI body that questions or concerns were raised of a different nature. So again, this all comes back to, “what is the role of accreditation?” What is the direction that the entities that are overseeing it as part of the triad assume as their responsibilities? Versus what may have been the intent or the deliverables of the past.

You know, I come from a time when I thought the triad was all about accreditation being… It’s not just academic oversight and review, but certainly that has over the years to come to a great deal of additional oversight of things that are compliance related.

Drumm: I understand. Let’s take about three minutes and wrap up on the rest of the issues because we’ve got other things we want to talk about.

Cash Management, Tuition and Fees, Books and Supplies

Tom Netting: Very, very briefly, but quickly, and another major issue for all of your listeners, I would think for all of your presidents and all of your different individuals on the podcast, are the issues around tuition and fees and the department’s desire under cash management to exclude from tuition and fees, the cost of book supplies and other educational equipment in looking to move this outside of tuition and fees on the ledger card and elsewhere, what they’re hoping to do is make this an opt-in process, as opposed to an opt-out process going forward and forcing institutions to have a number of points at which they literally each payment period or each period of enrollment.

So each semester or the like, make sure that the institution and/or parents have given a prior approval for the buying or the purchasing of the various books and supplies.

There were many, many discussions around, candidly, a difference of opinion and a difference of understanding of the benefits of what the publishers do with things like bundling, what is done with things like availability of online, what is done to make kit costs, when you’re talking about more career, vocational, trade type programs, where kits are put together in advance for the individual students, as opposed to forcing them to go out on the free market and purchase those.

Thank you. Either individually or collectively, which would be hard in some instances to do. And again, they just couldn’t come to terms on that.

Last, but certainly not least, under cash management, for many of your leadership to also think about, where there were changes to Tier 1 and Tier 2 of the agreements between institutions and lending communities and finance communities, and the removal of fees for Tier 1, Tier 2, third party collaborations on things like bank cards and the like.

And last but certainly not least, meal plans, nuanced, but nevertheless, probably very important. The regulations would now state that all students who have a surplus or a remaining balance on their meal plan card at the end of each payment period or period of enrollment either has the opportunity to roll that over or must be reimbursed in cash that outstanding balance.

For a lot of institutions, that can be a pretty heady process. So, again, nuance, some of these probably smaller than others, but nevertheless, a lot of discussion around a lot of these different issues.

Why Higher Ed Leaders Need to Stay Involved in Neg Reg

Drumm: Wow. Well, that’s a lot of stuff to digest. And , I’ll just reiterate, it’s important for folks to understand what’s going on in Washington, because if something comes up and it’s not going to help your institution to be able to offer better student learning outcomes, et cetera.

You need to get on the horn and talk to your congresspeople, talk to your representatives, talk to your creditors, and let them know because just because the department says something and goes into the NPRM, the Notice for Public Rulemaking, just because it goes into the Neg Reg doesn’t mean that it is a done deal, there is still a public comment after that, and the department takes these things into account.

Tom Netting: And I would lend to you that all of those entities on behalf of the various organizations, you know, they all obviously do their best and they all come to that table with the promise and the commitment to negotiating good faith. And I think all sides did. It’s just that these are issues that have.

Polarizing positions. I mean, it’s just no other way to put it, but I do think you’re going to hear from the institutional community I’m quite certain that as these issues move forward You’re going to be hearing more about them and asked to potentially respond at the appropriate time as you said trump

Drumm: Absolutely.

And I know that if folks have questions, they can reach out to you directly.

Tom Netting: I would be happy to try and respond. And at least if nothing else, point them to the pages where they can do some of the research and certainly some of the write ups that I and others have put together.

What’s Happening on “The Hill”

Drumm: So, let’s, in five minutes or so, let’s make the trip across Washington, D.C. over to The Hill, because there’s a few things going on over there.

Tom Netting: Oh my gosh, you’re going to give me five minutes to cover Congress?

Drumm: Well, maybe, seven.

Tom Netting: Can I push for seven? The major issues, the one that again was at the top of mind last we spoke, and still is quite candidly, is the bipartisan year-round Pell proposal.

It was legislation developed by Dr. Fox and Bobby Scott, the ranking member, Bobby Scott, and Dr. Fox being the chairwoman. It was voted out of committee by a vote of 38 to 7, so again, to have that high of a bipartisan rate, again, there were some Democrats that expressed concern. Not the least of which was over some of the guardrails, some of the outcomes measures that were put in the bill, and also, candidly, the inclusion of the proprietary sector in this particular proposal.

It’s the only proposal in short-term Pell that includes both distance education and proprietary schools, two of the communities that in other legislation at times when it’s been introduced have been left out. We were hoping to bring it to the floor the last week in February under the consensus calendar.

Unanimous consent, which is a process which basically is kind of perfunctory because they believe there is enough support in a bipartisan manner to move it forward as they got closer and closer, the traditional academic community express serious reservation concerns, not with the merits of year-round Pell and the opportunity to provide Pell grants for students in short term programs.

But the offset, the way to pay for it, and the fact that risk sharing by institutions in the private nonprofit sector and the use of some of their potential endowment funds would be used as the offset to pay for this new funding, recognizing that private nonprofits would probably be one of the major benefactors of short term program delivery as well, but also the fact that it would include career and technical education providers and proprietary schools.

They express concerns with the precedent that would set. So did the American Council on Education, the umbrella group over all of higher education, expressing the precedent of utilizing funds from one sector to pay for a benefit for another, even though both were meritorious was problematic.

So, long story short, for that and other technical reasons, the legislation was pulled, and still remains, waiting to be brought to the House floor.

The Making America Stronger Act

We have several other key bills that are waiting to be brought to the House floor as well. One is the Making America Stronger Act, which is the WIOA reauthorization.

That was voted out of the House Committee 44 to nothing, which shows again that WIOA is something that potentially could move forward. I believe that one will probably come forward after we see whether or not Congress can get through the current deadline and focus on the overall appropriations bills.

The College Cost Reduction Act

The more contentious bills, we’ve had the College Cost Reduction Act, which is the Republicans and Dr. Fox’s proposal. I On reauthorization of the student loan programs, kind of a mini-HEA reauthorization. We’ve spoken in the past, Drumm, about the fact that they’re looking to do reauthorization in basically five to six chunks.

They’ve done the chunk on international already and the deterrent act. This one is the student loan proposals and is a very comprehensive bill. It makes major changes, everything from removal of a lot of the loan programs, meaning down to two different variations. Just simply one income based and one on the amortization schedule, removing of a lot of the loan forgiveness programs, including professional service loan forgiveness, public service loan forgiveness.

And a lot of the other individual aspects of debt to earnings type proposals, among others.

The 100 Percent Rule: Certifications and Licensures

The last thing that I’ll share with you, which is totally new information, that hopefully is important to some aspects of your group. In the last round of the final rules that were published before November 1st of last year, one of the provisions that was put in was a regulation that says that if you have a program, that leads directly to state licensure and certification, and the state deems a specific number of clock hours for that program.

Think allied health, think beauty and wellness, think some of as well the actual true trades, where there is a defined length of program to acquire the certification or licensure. What the department put forward was a rule that said that federal aid will only be provided up to that maximum number of stated hours by the state.

We’re calling it The 100 Percent Rule. Why that is important is because here to four institutions have been able to go up to 150 percent of that program to provide additional time to elevate the student and make sure that they were fully equipped and prepared. Nobody really meets 100 percent attendance, so you have some issues with attendance as well as other things.

Representative Lloyd Smucker will be introducing this Friday the Clock Hour Program Student Protection Act. Which will attempt to go back to the status quo of providing 150 percent timelines for institutions to provide adequate and comprehensive training to ensure the benefits of, hopefully, those individuals successfully going on to sit for and complete their state licensure or certifying exam.

It’s another very niche issue, but for those institutions across your spectrum, and so many others, career technical vocational institutions community colleges private nonprofits proprietary as well, that service these programs and these students. It’s a big issue.

Yeah, it’s one of those things that it’s like this is logical.

It makes good sense. Why not?

We hope We hope the integrity on the back side was again to speak for the department not but not speaking for them, but to share some of their view, there is concerns that again they want to be accurate and good stewards of the federal dollar and they need to make sure these programs are being successful.

The interesting thing is others want to tie it to outcomes assessments. So that could be part of the negotiations as this continues to go forward.

Drumm: Okay, one last question before we go Title IX.

Are we ever going to see revisions?

Tom Netting: Yes, and you will probably see them before the 4th of July.

Drumm: Ah, okay It’s been delayed a lot, but it’s a huge, huge issue. Are we going to see anything that’s going to really surprise us?

Tom Netting: I don’t have a crystal ball, but again, Jim Moore was kind enough to participate in one of my organizations, C-SPEN, Career Schools Private Education Network.

He was at our higher ed policy meeting in DC at the middle of February. And this comes directly from him, which is why I said likely before July 4th, His words and yes, there will be some things that are probably Going to surprise some people. I mean the pendulum is going to swing again How far and to what degree he didn’t intimate, and I would never venture a guess with a package that broad and that significant

Drumm: Very good.

Well, Tom, it’s always a pleasure having you on the show. Any parting words for our guests.

Key Takeaways for Higher Ed Leaders

Tom Netting: Be prepared. Again, I say this in the hopes that I know that all of the individuals that attend your podcasts are attentive. But advocacy is the key folks and both up on Capitol Hill, as well as in response to these notices of proposed rulemaking.

I hope I’ve shown that there is more than enough to support your FSA, you know, your financial aid departments, your IT departments. As well as other aspects of your institutions as we prepare for and respond to all these very heady issues.

Drumm: Very good. Well Tom, thanks so much again for being on the show It’s always a pleasure having you back and I look forward to the next time we get a chance to chat.

Tom Netting: So do I Drumm.

I always enjoy these conversations.

Drumm: Thank you, my friend. Take care. Thanks for listening this week. A special thank you to this week’s special guest, Tom Netting, and for his Washington Update. Tom, it’s always a pleasure having you on the show. I look forward to the next time we get to catch up and talk more about the goings on.

Tune in next week for my conversation with Kevin Grubb, a Vice Provost for Career and Professional Development at Villanova University. Many of you may recall that Kevin was a guest on the podcast about a year ago, and he joins us again to give us an update on how Villanova’s high-tech, high-touch approach to career services has been working to create career and job-ready graduates.

Thanks for listening. See you next week.

DLW: Changing Higher Ed is a production of The Change Leader, a consultancy committed to transforming higher ed institutions. Find more information about this topic, along with show notes on this episode, at changinghighered.com. If you’ve enjoyed this podcast, please subscribe to the show and we would also value your honest rating and review.

Email any questions, comments, or recommendations for topics or guests to changinghighered.com. podcast@changinghighered.com.



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