U.S. Department of Education Announces New Hearings for Conversations on Higher Education Rulemaking

Press Release

The U.S. Department of Education announced today that it will begin conversations with the higher education community on rules that would be designed to ensure colleges and universities are giving students a high-quality education that prepares them for the workforce and lifelong success -- including discussion of topics like state authorization for online programs, issues surrounding institutions' management of federal student aid funds, and how to define "gainful employment." Today's announcement builds upon previous steps to develop regulations that protect taxpayer funds and ensure that all students are able to access and afford a quality higher education.

"We know college is one of the best investments anyone could make, but we want to ensure that students -- and taxpayers -- are investing in programs that prepare graduates with the skills and knowledge they need to compete for high-paying jobs," said U.S. Secretary of Education Arne Duncan. "The higher education community has raised our awareness about a number of issues, and we are interested in learning more through these conversations."

Last year, the Department held discussions about rules that would be designed to prevent fraud and abuse of title IV federal student aid funds, especially within the context of current technologies. In particular, the Department announced its intent to propose regulations to address the use of debit cards for disbursing federal student aid as well as to improve and streamline the campus-based federal student aid programs.

While the Department's interest in fraud concerns and the use of debit cards continues, we are now considering adding the following topics to the regulatory agenda:

- Cash management: The Department is interested in looking at the regulations governing when and how institutions disburse federal student aid, how institutions invest and manage those funds, and other issues on this topic.
- State authorization for distance education programs: The Department had previously regulated on this issue, but a court vacated the rule on procedural grounds in 2011. With that regulation no longer in place, the Department is interested in ideas for how to address the requirement that states authorize the institutions that provide distance education to its residents when an institution is not physically located in the state.
- State authorization for foreign locations of domestic institutions: Similarly, the Department is interested in ideas for how foreign locations of domestic institutions should be treated under the state authorization regulations since current rules do not specifically address foreign locations.
- Clock to credit hour conversion: Given concerns raised by institutions of higher education, the Department is interested in whether regulations governing the conversion of clock hours in a program to credit hours should be reviewed.
- Gainful employment: Last June, a U.S. District Court vacated regulations defining what it meant for a program to provide "gainful employment in a recognized occupation," but it affirmed the Department's authority to regulate in this area. The Department is now interested in public input on other potential approaches to distinguish between successful and unsuccessful programs that seek to prepare students for gainful employment, thoughts on what the best measures or thresholds should be, and how best to construct an accountability system.
- Campus safety and security reporting: The reauthorization of the Violence Against Women Act made some changes relating to the information institutions are required to collect and disclose as part of the Clery Act. The Department is proposing to develop regulations to implement these new requirements.
- Definition of "adverse credit" for the direct PLUS loan program: The PLUS Loan program requires that applicants not have an adverse credit history to receive a loan. What constitutes "adverse credit" was defined in regulations published in 1994 when credit conditions and consumer markets were different and loans were made through two different programs. Since these conditions have changed, the Department is interested in comments on whether it would be appropriate to modify the definition of adverse credit and, if so, what changes should be made.

Hearings on these subjects will be held in May in San Francisco, Minneapolis and the District of Columbia. Based on the comments gathered at the hearings, the Department will draft a list of topics to be considered by rulemaking committees. Negotiations would likely begin this fall.

Further information on the public hearing sites, including dates and locations, will be available at http://www2.ed.gov/policy/highered/reg/hearulemaking/2012/index.html.

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