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Article on OCR’s Letter Regarding Rights of Disabled On Rights of Disabled Students to Participate in Extracurricular Activities

Posted in Athletics, Civil Rights & the Constitution, Department of Education, Higher Education News, Higher Education Policy

Dennis Cariello

A few months back, we discussed a dear colleague letter the Department of Education’s Office for Civil Rights published related to the rights of of disabled students to participate in extracurricular activities.  Subsequently, we had the opportunity to publish a longer article in Bloomberg/BNA Law Week.   As always, your comments are most welcome.

According to New NCES Study, Proprietary Higher Education Reduces Costs for Students by Over 10% Since 2007-08

Posted in Department of Education, Higher Education News, Uncategorized

Dennis Cariello

Yesterday, the National Center for Education Statistics released the 2011-2012 National Postsecondary Student Aid Study.  This report focuses on the average price of attendance paid by students to attend institutions of higher education (price of attendance includes tuition, fees, books and materials, housing, food, transportation, and personal expenses), and also specifies the “net price” (price of attendance, less grants) and the out-of pocket expenses (price of attendance, less grants and other aid, such as loans or work study).

There are a few findings of note, as we try to show below, which is derived from Tables 1-3 in the study:

2011-12 – Full Time Undergraduate Students

Institution Type

Public 2-year Public 4-year Private Nonprofit 4-year Private For-profit 2-year Private For-profit 4-year Private For-profit 2-year or more
Annual Price of Attendance $15,000 $23,200 $43,500 $29,700 $29,200 $29,200
Net Price $7,100 $14,300 $23,000 $18,600 $16,600 $17,100
Net “Out of Pocket” $6,000 $9,600 $15,000 $12,400 $9,000 $9,900

2007-08 – Full Time Undergraduate Students

Institution Type

Public 2-year Public 4-year Private Nonprofit 4-year Private For-profit 2-year or more
Annual Price of Attendance $13,600 $20,400 $38,800 $32,900
Net Price $6,400 $13,200 $22,300 $20,300
Net “Out of Pocket” $5,600 $8,800 $14,200 $11,500

From the chart below, what we see is that while higher education overall has increased the cost of attendance over the last four years, for-profit institutions have actually reduced the cost of attendance:

Institution Type

Public 2-year Public 4-year Private Nonprofit 4-year Private For-profit 2-year or more
2011-12 Annual Price of Attendance $  15,000.00 $  23,200.00  $  43,500.00  $  29,200.00
2007-08 Annual Price of Attendance $  13,600.00 $  20,400.00  $  38,800.00 $  32,900.00
Difference  $    1,400.00  $    2,800.00  $    4,700.00  $  (3,700.00)
Percentage Change





2011-12 Net Price of Attendance  $    7,100.00  $  14,300.00  $  23,000.00 $  17,100.00
2007-08 Net Price of Attendance  $    6,400.00  $  13,200.00  $  22,300.00  $  20,300.00
Difference  $        700.00  $    1,100.00  $        700.00  $  (3,200.00)
Percentage Change





Note, I have not considered students as a whole because part time students, which are disproportionally located at for-profit and 2-year public colleges, would have the effect of lowering the average and net price price.  So, by looking at full-time student, we get a fairly apples-to-apples comparison.


The reduction in cost of attendance at for-profit schools, relative to the industry, is fairly dramatic.  Looking at net price – which is fairer to private non-profits which commit substantial sums to institutional scholarship – we see a significant reduction in the cost gap between for-profit schools and public colleges.  In fact, on average, a four-year public college will only cost $2,300 less (net price) than one at a for-profit 4-year college.

There are, no doubt, reasons for all of this.  Declining state expenditures on higher education have forced public institutions to raise tuition.  On the other hand, proprietary schools, and to a lesser extent, private non-profit institutions, have had reasons to reduce price or commit to large institutional scholarships to attract students in the face of declining student demand.  It is, however, a positive story that proprietary institutions have responded to consumer demand and reduced price.  I do wonder how much further price would be lowered if the 90/10 rule were repealed.

Notes from the FSA Conference Day 1

Posted in Department of Education, Financial Aid (Loans & Grants), Higher Education News, Higher Education Policy

Patricia V. Edelson

As usual, the it is a well attended conference Federal Student Aid (FSA) Conference here in Las Vegas is well attended.  It is nice to catch up with so many friends from schools and the Department of Education.  It is also a great opportunity to here about the upcoming initiatives for FSA and what FSA thinks schools should be focusing on.

The first day of the conference opened with a General Session and welcome.  The presenters for this session were FSA COO Jim Runcie, Jeff Baker, and Lynn Mahaffie.   They provided various updates concerning Department of Education’s Title IV activities and initiatives.  They also mentioned that there will be an experimental site announcement in an upcoming federal register.  Also, FSA encouraged schools to adopt the Shopping Sheet that was introduced last year.  While it is still not a requirement except for military students, currently 19,000 schools have signed up to use it.

One hot topic was the impact of the unconstitutionality of the Defense of Marriage Act (DOMA) on student aid. As you may recall, last term, the Supreme Court overturned DOMA and, as a result, the federal government must recognize marriages between same sex couples for federal benefit purposes.  For aid purposes, this means that if a student (or parent of a dependent student) is legally married they would file the FASFA as married, regardless of gender. This is effective in the current year and appropriate language will be included in the 2014/2015 FAFSA. Students (or parents) who are in a same sex marriage, but who already filed their 2013/2014 FAFSA, but could have filed married at the time they filed, may now correct their ISIR and file married. They may correct marital status, but are not required to. New filers must file married and a DCL will be coming out early next week with guidance. “Legally married” applies regardless of State of current residence. Conversely, if parents aren’t married but living together they will be required to report both incomes.

New on the verification horizon, the Department has eliminated the verification group V2, which required verification of SNAP benefits and added a new Group V6 that will require verification of income in cases where income and household size are inconsistent.

The upcoming negotiated rulemaking sessions were also discussed, and special note was made of the upcoming sessions related to VAWA and the Clery Act regulations, as well as the use of third parties to disburse Title IV aid.


Primer on Negotiated Rulemaking

Posted in Department of Education

Dennis Cariello

Given all the current and future negotiated rulemaking sessions fro the U.S. Department of Education (Department), it might be helpful to take a look at the Department’s FAQs on the Negotiated Rulemaking Process.  Also, here is the relevant statute concerning negotiated rulemaking.

Department of Education Announces Negotiators for Rulemaking Concerning the Violence Against Women Reauthorization Act of 2013

Posted in Clery Act, Department of Education, Higher Education News, Higher Education Policy

Dennis Cariello

Following up on our prior coverage of this rulemaking session, late last week, the U.S. Department of Education (Department) announced the negotiators for the rulemaking session seeking to “prepare proposed regulations to address the changes to the campus safety and security reporting requirements in the Jeanne Clery Disclosure of Campus Security Policy and Campus Crime Statistics Act, made by the Violence Against Women Reauthorization Act of 2013 (VAWA).”  The negotiations sessions, which start on January 13-14, 2014 (and continue on February 24-25, and then end on March 31-April 1), run from 9:00 a.m. to 5:00 p.m. and will be held at the Department’s office at 1990 K Street, N.W., Eighth Floor Conference Center, Washington, DC 20006.  Gail McLarnon was named the Department’s negotiator.

Additional information, including the original Federal Register Notice, can be found on the Department’s VAWA Negotiated Rulemaking web site.  This will be an interesting session and will attempt top answer a number of difficult questions.  My presentation on the changes required by VAWA tries to highlight a few of the more thorny topics.


Final Gainful Employment Rulemaking Session Scheduled for Friday, December 13

Posted in Department of Education, Education Data & Statistics, Gainful Employment, Higher Education News, Higher Education Policy

Dennis Cariello

Politico’s Libby Nelson, in today’s “Morning Education” email (and in a tweet on Black Friday) reports that the U.S. Department of Education “has scheduled its third session of negotiated rule-making on the ‘gainful employment’ rule for Dec. 13 from 9 a.m. to 5 p.m. at the Education Department’s 1990 K St. offices, according to an email sent to negotiators Friday.”  This is also the last day of the next NACIQI meeting (the Department’s advisory committee on accreditation).  In case you are curious, 1990 K Street is no where near 415 New Jersey Ave. NW. (where the NACIQI sessions will be held).

As you may recall from our past reporting, one of the purposes of this session is to review data on the anticipated effect of the proposed rules.  It will be interesting to see how these various rules shake out and if there are a number of programs that would pass the debt metrics proposed in September, but would fail the new measures proposed by the Department before the last session.

UPDATE (8:23 PM): The Federal Register has the pre-publication notice for the new session.  Nothing else of note in the notice.

Some Thoughts on the Latest Round of Gainful Employment Negotiated Rulemaking Part 2

Posted in Department of Education, Gainful Employment, Higher Education News, Higher Education Policy

Dennis Cariello

Something that seems clear after two rounds of negotiated rulemaking is the lack of trust those aligned with consumer advocates have for proprietary schools.  As I recall, one negotiator suggested they needed to think “deviously” when considering how a proprietary school would game the rules.  I understand these folks hear some very sad and angering stories from students that have been legitimately harmed – and we need to protect those students that are treated unfairly at any institution.  But, as one negotiator said, “the plural of anecdote is not data.”  The vast majority of schools are attempting, in good faith, to help their students improve their lives through education and, in fact, are doing a pretty good job providing students with the skills and education sought.  Even the NY Federal Reserve – in a report I will discuss in another post – noted that proprietary schools offering two-year degrees and certificates have completion rates that are “reasonably good” (57% graduate in 150% of normal time for two-year degrees, 66% graduate in 150% of normal time for degrees under two years).  Indeed, the proprietary school negotiators selected by the Department are sterling examples of my point.

The issue came to a head, I think, as related to Marc Jerome’s proposal to, in essence, be able to supplant student borrowing with institutional aid if that program has failed for one year to meet the debt-to-income or debt-to-discretionary income test.  As I see it, this is a very pro student proposal; in essence, he wants the ability to give away money to students to keep them from borrowing.  It would be done with the knowing consent of the students (they’d have to sign a document, presumably showing how much they could have borrowed and that they are not going to take out a loan for that amount and will instead get funds from the school).  The questioning however, was as intense as it’s been about anything else.  Concerns were expressed about letting a failing program have a “second bite at the apple,” and how schools would use this to game the rules – including finding ways to raise tuition and use this to reset the bar at the upper limit of the metric set by the Department.  It seemed, amidst these attempts to figure out how some school could leverage this proposal to ”game” the rule, that the proposal at issue was one in which an institution could request the ability to provide free money to students to lower student debt.  To the Department’s credit, it embraced this idea (John Kolotos called it the “most proactive” idea negotiators put forth related to student debt). It seems, however, everyone should rally around such a pro-student measure, notwithstanding their opposition to each other on other issues.

Some Thoughts on the Latest Round of Gainful Employment Negotiated Rulemaking Part 1

Posted in Department of Education, Gainful Employment, Higher Education News, Higher Education Policy

Dennis Cariello

I will apologize upfront for the length of this post.  Or that there will be multiple posts on this.  There’s just a lot to say after this latest session of gainful employment negotiated rulemaking.

For those of you that have missed the news, the Department of Education requested, and the negotiation committee agreed, to hold one more round of negotiations.  The sessions will last one or two days and happen somewhere between December 9-20.  If the goal is to achieve consensus around the proposal – or at least reach some agreement on some ideas – this is a good move.  I thought the Department made a mistake in not planning on holding three sessions in the first place.  While I understood the rationale – the Department has, after all, already held three sessions on this rule in the past, so everyone knows the issues – I thought not holding the last session failed to respect the normal process: the first session negotiators meet each other and talk philosophy; the second session they discuss actual proposals and coalesce; and the third session they negotiate over actual language.  Although many negotiators had a fairly solid grounding in the issues this time around, the process still remained the same, and wasn’t appreciably advanced by the Department’s release of proposed rule language prior to the first session.  I would, however, be remiss in not acknowledging that the Department’s dramatic revision to that first proposal prior to the second session also likely played a role in the failure to complete in two sessions.  By adding two new metrics, making schools comply with three of four of the proposed metrics, and not having data regarding how the two metrics would affect school programs, it may have been too much to expect negotiators to be in a position to vote on consensus this round.  Nonetheless, the Department deserves kudos for recognizing all of this and proposing to hold another session.

That said, I am curious how this final session will go.  Ostensibly, the purpose was to provide data to the negotiators on the effect of the new metrics.  What is unclear to me is whether the data will make any difference to the Department.  Indeed, the Department seemed to suggest that the main policy proposal (the four metrics) wasn’t going to change.  While we don’t have a transcript of the proceedings (the committee voted not to transcribe the proceedings on the first day of the first session), Ben Miller of the New America Foundation has done a live blogging of the sessions that squares with my recollection of the discussion:

Jones from Strayer says he appreciates the attempt to get data. He asks about the process going forward. He notes that some of the ideas the Department has put forward lies in the impact of the data. He asks if the terms of the rule appear to be set, what is the point of the data if there isn’t openness to using that data to find some critical underlying points. He says if the Department is going to have the data would it be used to revisit core components of the rule. Kolotos says it will give the data and we can discuss the metrics, but it must be done in one day and not have session after session. Jones says he in particular is concerned about the impact of complying with one of three metrics versus having to comply with all three metrics.

. . . .

Kolotos responds to Jones. He says he believes the Department put forward the right policy. The data should inform the policy, but it should not drive it. That seems to suggest that the policy should not be driven by the outcomes estimates but by what makes sense from a policy standpoint. (Italics in original).

I see this as an overreaction – perhaps an understandable one – to the court’s decision dealing with the last gainful employment rule.  As you may recall, the court in that case upheld the debt-to-income measures as the product of reasoned rulemaking but struck down the loan repayment metric.  While the court found that the Department based the debt metrics on “expert studies and industry practice,” which resulted in a “rational connection to the facts found tand the choice made,” the loan repayment metric was said to be based on an outcomes driven analysis:

The debt repayment standard, by contrast, was not based upon any facts at all. No expert study or industry standard suggested that the rate selected by the Department would appropriately measure whether a particular program adequately prepared its students. Instead, the Department simply explained that the chosen rate would identify the worst-performing quarter of programs. Why the bottom quarter? Because failing fewer programs would suggest that the test was not “meaningful” while failing more would make for too large a “subset of programs that could potentially lose eligibility.”  That this explanation could be used to justify any rate at all demonstrates its arbitrariness. If the Department had chosen to disqualify the bottom ten percent of programs, or the bottom half, it would have offered the same rationale: the rate chosen disqualified the percentage of programs that it was intended to disqualify, and to have disqualified fewer would have made the test too lenient while disqualifying more would have made the requirement too stringent. This is not reasoned decisionmaking. “As an expert agency, [the Department’s] job is to make rational and informed decisions on the record before it in order to achieve the principles set by Congress. Merely . . . picking a compromise figure is not rational decisionmaking.” In setting the debt repayment rate, the Department picked a palatable figure. Because the Department has not provided a reasonable explanation of that figure, the court must conclude that it was chosen arbitrarily.  (Decision, at page 31 (citations omitted).

As I read this case, the Department need not ignore what the data shows in coming up with the rule – the court only held that the data can’t be the sole basis for a rule.  Indeed, if a given rule would eliminate all or substantially all of a certain type of program, that should be a good reason to go back to the drawing board.  Now, I may be reading the Department incorrectly here; the folks I know at the Department are reasonable and would want that data so they could see the effect of the rule before they publish the rule.  I just hope the court’s decision hasn’t gotten the Department thinking otherwise.

The Department of Education Announces More Negotiated Rulemaking

Posted in Credit Hour, Department of Education, Financial Aid (Loans & Grants), Higher Education News, Higher Education Policy, State Authorization

Dennis Cariello

It will be a very busy year for the U.S. Department of Education (Department).  Already engaged in a controversial negotiated rulemaking on “gainful employment,” and having announced a rulemaking on the implementation of the Violence Against Women Reauthorization Act of 2013, the Department published a notice in the Federal Register of its Intention To Establish a negotiated rulemaking committee to discuss topics for “Program Integrity and Improvement.”  The committee meetings will be held at the Department’s offices at 1990 K Street NW., Eighth Floor Conference Center, Washington, DC 20006.  The committee will meet from 9am -5 pm on the following days:

  • Session 1: February 19-21, 2014
  • Session 2: March 26-28, 2014
  • Session 3: April 23-25, 2014

The “Program Integrity and Improvement” rulemaking will likely focus on six topics:

  • Cash management of funds provided under the title IV Federal Student Aid programs, including the use of debit cards and the handling of title IV credit balances.
  • State authorization for programs offered through distance education or correspondence education.
  • State authorization for foreign locations of institutions located in a State.
  • Clock to credit hour conversion.
  • The definition of “adverse credit” for borrowers in the Federal Direct PLUS Loan Program.
  • The application of the repeat coursework provisions to graduate and undergraduate programs.

The Department is seeking nominations for this committee.  All nominations should be received by December 20, 2013.  The nominees  should fill one of the following constituencies that “are significantly affected by the topics proposed for negotiations”:

  • Students.
  • Legal assistance organizations that represent students.
  • Consumer advocacy organizations.
  • State higher education executive officers.
  • State attorneys general and other appropriate State officials.
  • Business and industry.
  • Institutions of higher education eligible to receive Federal assistance under title III, Parts A, B, and F, and title V of the HEA, which include Historically Black Colleges and Universities, Hispanic-Serving Institutions, American Indian Tribally Controlled Colleges and Universities, Alaska Native and Native Hawaiian-Serving Institutions, Predominantly Black Institutions, and other institutions with a substantial enrollment of needy students as defined in title III of the HEA.
  • Two-year public institutions of higher education.
  • Four-year public institutions of higher education.
  • Private, non-profit institutions of higher education.
  • Private, for-profit institutions of higher education.
  • Regional accrediting agencies.
  • National accrediting agencies.
  • Specialized accrediting agencies.
  • Financial aid administrators at postsecondary institutions.
  • Business officers and bursars at postsecondary institutions.
  • Admissions officers at postsecondary institutions.
  • Institutional third-party servicers who perform functions related to the title IV Federal Student Aid programs (including collection agencies).
  • State approval agencies.
  • Lenders, community banks, and credit unions.


Department of Education Publishes Change to NACIQI Schedule

Posted in Accreditor News, Department of Education, Higher Education News, Higher Education Policy

Dennis Cariello

Earlier today, the Department of Education published a notice in the Federal Register (78 FR 68832) announcing revisions to the agenda for the December 12-13, 2013 meeting of the National Advisory Committee on Institutional Quality and Integrity (NACIQI).  This is a follow up to meeting notices published on August 19, 2013 (78 FR 50401), and October 30, 2013 (78 FR 64929).

This notice removes the petition for initial recognition submitted by the Association of Institutions for Jewish Studies (AIJS) from the agenda.  In addition, the election of a NACIQI Chairperson and a Vice Chairperson will precede the Committee’s review of agencies scheduled for review.

As a reminder, the NACIQI meeting will be held on December 12-13, 2013, from 8 a.m. to 5:30 p.m. at the Liaison Capitol Hill Hotel, 415 New Jersey Ave. NW., Washington, DC 20001.  NACIQI will be considering the following actions:

Petitions for Continued Recognition Accrediting Agencies
1. Council on Accreditation of Nurse Anesthesia Educational Programs (COANAEP)
2. Council on Education for Public Health (CEPH)
3. Northwest Commission on Colleges and Universities (NWCCU) (regional accreditor – covers Alaska,
Idaho, Montana, Nevada, Oregon, Utah, and Washington)
4. Western Association of Schools and Colleges, Accrediting Commission for Community and Junior Colleges (WASC–ACCJC) (regional accredior – covers  associate degree-granting at schools in California,
Hawaii, the United States territories of Guam and American Samoa, the Republic of Palau, the Federated States of Micronesia, the Commonwealth of the Northern Mariana Islands, and the Republic of the Marshall Islands)

State Approval Agency for Nurse Education
1. North Dakota Board of Nursing (NDBN)

Petitions for Recognition Based on a Compliance Report
1. American Podiatric Medical Association (APMA)
2. Association for Clinical Pastoral Education, Inc. (ACPEI)
3. Commission on English Language Program Accreditation (CEA)
4. Council on Chiropractic Education (CCE)
5. Joint Review Committee on Education in Radiologic Technology (JRCERT)
6. Montessori Accreditation Council for Teacher Education (MACTE)

State Approval Agency for Nurse Education
1. New York State Board of Regents, State Education Department, Office of the Professions (Nursing Education) (NYBRN)

State Approval Agencies for Vocational Education
1. New York State Board of Regents, State Education Department, Office of the Professions (Public Postsecondary Vocational Education, Practical Nursing)
2. Oklahoma Board of Career and Technology Education (OBCTE)
3. Pennsylvania State Board of Vocational Education, Bureau of Career and Technical Education (PSVBE/BCTE)

President Obama Announces Intent to Nominate New Assistant Secretary for Postsecodnary Education

Posted in Department of Education, Higher Education News, Uncategorized

Dennis Cariello

As reported by the Chronicle of Higher Education, President Obama plans to nominate Ericka M. Miller as the U.S. Department of Education’s assistant secretary for postsecondary education.  As reported by the Chronicle, “Ms. Miller is now a vice president with the Education Trust. She has previously served as vice president and director of the search firm Isaacson, Miller, and as president and chief operating officer of the McKenzie Group, an education consultancy.”



Additional Information on the Government Shut Down from Federal Student Aid

Posted in Department of Education, Higher Education News, News from the Hill

Dennis Cariello

In our report on the budget showdown, I neglected to link to the letter from James Runcie, the COO of the Department of Education’s Office of Federal Student Aid (FSA) about the budget shutdown.  In short, much as we reported yesterday, FSA’s operations will largely continue for student and schools.  As there will be few administrative staff in DC or the regional offices, FSA officials won’t be holding an webinars or attending speaking engagements during the shut down.  Happily, as an attachment to the letter shows, most of FSA’s customer service contact centers will remain open.  The new Reach FSA voice-activated phone number (1-855-FSA-4-FAA or 1-855-372-4322) will also remain operational.

What the Budget Showdown Means for Higher Education

Posted in Department of Education, Financial Aid (Loans & Grants), Higher Education News, Higher Education Policy, News from the Hill

Dennis Cariello

Well, it’s September 30th and that means is the end of the Federal Government’s fiscal year.  Before anyone bites into the cake, however, Congress still needs to pass a new budget (or continuing resolution.  Otherwise, the government will shut down.  Happily, the Department of Education (Department) updated the playbook for when the government shuts down.

As an aside, as we are also heading to a standoff over raising the debt ceiling, I humbly suggest the Department (assuming it has staff to do) offer information on what would happen if Congress does not raise the debt ceiling (in case you are interested, the Congressional Research Service put out a number of helpful reports we highlighted earlier this year).  The lack of information when this happened two years ago caused confusion and worry among students, parents and schools over what would happen to loans and grants, among other things.

As for the shut down, the Department’s memo explains there will not be very many folks working at the Department during a shutdown:

the Department would furlough over 90 percent of its total staff level [the Department has 4,225 full and part-time employees] for the first week of such a lapse.  During this first week, we would maintain only those excepted functions related to the discharge of the duties of Presidentially-appointed, Senate-confirmed individuals; those employees charged with the protection of life and property; and, as appropriate,  the obligation, payment, and support of student financial aid as well as other authorized payments and obligations.

For a longer shutdown, “at most, a total of not more than 6 percent of the total staff would be called back” to perform “excepted activities to prevent significant damage to the underlying activity.”  In short, 212 employees will be working during the first week and, if the lapse lasts more than 1 week, 242 employees will work at some point during the shutdown [approximately 3,983 employees would be furloughed].

In higher education, loans and Pell grants will continue as normal.   Further, staff and contractors associated with these programs will continue to work, although “only skeletal program operations would continue under the ‘significant damage’ standard.”  While it’s not clear what level of loan servicing is provided for with skeletal program operations, the memo notes “student financial aid services should continue  in order to avoid the potential loss of federal assets and to maintain the delivery of student aid.”

Campus-Based aid programs, however, will not be so lucky.  Indeed, “FSA employees working in areas not directly related to Pell Grants or Direct Student Loans, such as the Campus-Based Programs of College Work-Study and Supplemental Educational Opportunity Grants, customer service activities, administrative functions not related to providing student aid to schools and students, and development of new programs or activities, would not be excepted.”  Thus, if you are awaiting funds from the government out of these programs, you will be out of luck.

In addition, as a general matter, grants awarded by the Department previously (not student aid) should continue as normal for the first week.  “For a lapse of more than a week, Department staff would be needed as excepted employees to monitor the contractors and resolve any issues.”  In addition, grants awarded by the National Institutes of Health and the National Science Foundation will also be affected.  Under contingency plans authored by the Department of Health and Human Services and the National Science Foundation, grantees working on existing grants could continue their work to the extent funds are available and grantees do not require assistance from agency staff.  Neither agency will take any actions on new grant applications or awards.

Department of Education’s OCR Releases New Guidance on Fisher v University of Texas at Austin

Posted in Civil Rights & the Constitution, Department of Education, Office for Civil Rights (OCR), Uncategorized

Dennis Cariello

On September 27, 2013, the Department of Education’s Office for Civil Rights (OCR) released new guidance – in the form of a letter and Q&A – on the Supreme Court’s decision in Fisher v. University of Texas at Austin. Last week we posted a link to the report from the Congressional Research Service on Schuette v. Coalition to Defend Affirmative Action, which the Supreme Court will hear on October 15, and also deals with racial preferences in higher education.

The guidance offered is fairly limited.  In addition to the seven Q&As, the Department readopts (and defends the continued validity of) the Department’s 2011 guidance: “Guidance on the Voluntary Use of Race to Achieve Diversity in Postsecondary Education” and the related “Guidance on the Voluntary Use of Race to Achieve Diversity and Avoid Racial Isolation in Elementary and Secondary Schools.”

The guidance promotes a view that Fisher did little to the landscape concerning the use of race-conscious admissions programs.  While I can’t quibble with the individual answers to the questions posed – it is true that the Court did not validate the plan involved in Fisher, or that the Court continued to apply the “strict scrutiny” test to race-conscious admissions programs – it feels like there is something missing from the analysis.  For example, OCR only once notes that the Court will not defer to the deliberations of institutions over choosing an admissions plan:

The Court reiterated that, among other things, prior to taking into account an individual student’s race in the admissions process, colleges and universities must determine that available, race-neutral alternatives do not suffice to achieve the benefits of diversity. And, a court reviewing an admissions program under legal challenge must – without deference to the college or university – be satisfied that the means chosen by the college or university are narrowly tailored to meet its diversity goal. (Answer to Question 3)

In minimizing one of the big takeaways from the case (this is the only time the point about deference is mentioned), OCR leaves institutions with the idea that the case was a non-event.  To the contrary, trying to justify the use of race-conscious admissions criteria as narrowly-tailored to meet its end is a big issue.  More guidance on this point would have been very helpful.  Should institutions look at/commission studies for this purpose to examine the impact of the plans?  Should institutions look to the experience of other schools?  Should institutions test out the other plans to have the benefit of that experience? Is this nothing more than a check the box documentation requirement?  What does it mean for the Court to take account of the University’s experience and expertise in making its decision?

What concerns me is that institutions will get the idea that documenting the consideration of other, race-neutral admissions plans, will be sufficient to meet strict scrutiny.  While documenting consideration of such plans is important — and we advice institutions to document the deliberations related to such plans if an institution wants to utilize a race-conscious plan – I think the Court is looking for more to pass the bar of narrow tailoring.

Compliance Focus: New FSA Handbook Prohibits Discounts to Students Who Pay in Cash or Who Pay Before the Start of Class

Posted in Department of Education, Financial Aid (Loans & Grants), Higher Education News, Higher Education Policy

Dennis Cariello

As many of you know, the new Federal Student Aid Handbook were released this summer.  There are a number of new items in the handbook and I encourage you all to review it.  We will be discussing these new items in future posts (so make sure you do the reading, or else you won’t be able to participate!)

One new note that comes a bit out of the blue this year relates to tuition discounts: many of them are prohibited:

Charging variable tuition
Schools may not charge students who receive federal student aid a different tuition from those who don’t receive federal student aid for the same program. Moreover, giving a discount to students who pay in cash or who pay their tuition in full before the start of class is not allowed. This, of course, does not prevent schools from having different costs for other categories of students, such as having a different tuition for in-state and out-of-state students.

Volume Three of the Handbook, at 3-36.  Now, this comes from section 472(1) of the Higher Education Act which talks about “tuition and fees normally assessed a student carrying the same academic workload…”  Internally, the Department of Education has interpreted this to mean that all students–aided as well as unaided student–in the same program are charged the same tuition.  This is to prohibit schools from charging different tuition based on whether a student receives Title IV funding (and presumably charge those students more).  However, given the explicit language, schools should strongly consider ending discount programs covered by this note even if all students are eligible for the discount. Continue Reading

Negotiated Rulemaking Conference Call Today

Posted in Department of Education, Gainful Employment, Higher Education News, Higher Education Policy

Dennis Cariello

The Department of Education (Department) announced that the gainful employment negotiated rulemaking committee is holding a conference call today, Wednesday, September 25, 2013, from 1:00 p.m. to 3:00 p.m. Eastern Time to continue discussion on the topic of new gainful employment programs. This call will be open to the public for listening, and subject to a maximum of 200 callers. The Department asks that groups “dial in from one line to accommodate participation by as many members of the public as possible.”  Below is the conference line information:

Conference line: 877-610-1533
Participant code: 8001017

Based on the materials provided in the notice of the call, the call will be on the Department’s consideration and approval of new programs.  To that end, the Department asks:

  • Which new programs should be subject to the approval process?
  • What information should an institution seeking to establish a new program be required to submit to the Department?
  • What criteria should the Department use to ensure that its review of new program applications is meaningful and at the same time can be performed consistently?


Department of Education Publishes Court-Mandated Changes to Misrepresentation Rule

Posted in Department of Education, Higher Education News, Higher Education Policy, Misrepresentation

Dennis Cariello

Earlier today, the Department of Education (Department) published a Federal Register notice (the official publication will likely be tomorrow) amending the misrepresentation rule that was published on October 29, 2010 as part of the “program integrity” rules.  As we reported previously, in Ass’n of Priv. Sector Colls. and Univs. v. Duncan, No. 11-5174 (D.C. Cir. June 5, 2012), the DC Federal Court of Appeals upheld in part and vacated in part the misrepresentation rule.  the ruling required the Department  to:

  • Revise 34 C.F.R. §§ 668.71(b) (covering “misrepresentations regarding the eligible institution”) and 668.75 (covering misrepresentations related to an institution’s  relationship with the Department) because those sections include subjects not covered by the HEA;
  • Revise 34 C.F.R. § 668.71(a) to add additional procedural protections for fully certified schools; and
  • Revise 34 C.F.R. § 668.71(c), to exclude true statements that have the tendency or likelihood to confuse from the definition of misrepresentation

The Department’s revisions to 34 C.F.R. §§ 668.71 and 75 are in redline after the jump.  There were no changes required of 34 C.F.R. §§ 668.72-74.

Continue Reading

Senate HELP Committee to Hold Hearing on the Higher Education Triad

Posted in Accreditor News, Department of Education, Higher Education News, Higher Education Policy, News from the Hill, State Authorization

Dennis Cariello

On Thursday, September 19, 2013, 10:00 AM in room 430 Dirksen Senate Office Building, the Senate Committee on Health, Education, Labor, and Pensions will hold a hearing — the first in a series of hearings leading up to Higher Education Act Reauthorization — entitled “The Triad: Promoting a System of Shared Responsibility.” The witnesses include:

  • Dr. Paul E. Lingenfelter, Former President, State Higher Education Executive Officers Association, Boulder, CO (Testimony)
  • Dr. Terry W. Hartle, Senior Vice President, American Council on Education, Washington, DC (Testimony)
  • Dr. Susan D. Phillips, Provost and Vice President for Academic Affairs, University at Albany, SUNY, Albany, NY (Testimony)
  • Dr. Marshall A. Hill, Executive Director, National Council for State Authorization Reciprocity Agreements, Boulder, CO (Testimony)

Update: Chairman Tom Harkin and Ranking Member Lamar Alexander issues statements today as well (Harkin, Alexander 1, Alexander 2)

New College Scorecard to Have Salary Information for Institutions

Posted in Department of Education, Gainful Employment, Higher Education News, Higher Education Policy

Dennis Cariello

According to Libby Nelson at Politico, on Tuesday September 17,  deputy director of the White House Domestic Policy Council James Kvaal announced at a National Press Club that the administration is revising the College Scorecard to include median incomes of graduates.   In Ms. Nelson’s wonderful morning education email (which is sadly not available online), she reports ”[t]he methodology will likely be similar to that used for determining debt-to-earnings ratios in the ‘gainful employment’ rule for for-profit colleges, Kvaal told POLITICO – meaning the Education Department will get median income for groups of borrowers without sharing personally identifiable information.”

As I understand it – and there’s lots more to learn about this move – the salary data will come from students in the cohort for a school’s cohort default rate.  It is also our understanding (at this time) that the Department of Education will link this data to programs.  It’s not entirely clear, among other issues, which year’s salary data will be used (i.e., the third and fourth after leaving the institution, as proposed in the gainful employment rule) or how the data will present students that attended multiple institutions.

More to come  . . .


Department of Education Announces New Negotiated Rulemaking – With More to Follow

Posted in Clery Act, Department of Education, Higher Education News, Higher Education Policy

Dennis Cariello

Earlier today, the Department of Education (Department) announced the intention to establish a negotiated rulemaking (neg reg) committee to “prepare proposed regulations to address the changes to the campus safety and security reporting requirements in the Jeanne Clery Disclosure of Campus Security Policy and Campus Crime Statistics Act (Clery Act), made by the Violence Against Women Reauthorization Act of 2013 (VAWA).”  The notice calls for nominations to the committee be made by October 19, 2013 [note - the notice is currently unofficial and calls for nominations "30 days after publication" - I expect the notice to be officially published tomorrow].

The three neg reg sessions will be held on:

  • January 13-14, 2014;
  • February 24-25, 2014; and
  • March 31-April 1, 2014.

Also of note, the Department stated that it ”anticipates” holding additional negotiated rulemakings to discuss additional topics (that were addressed in public comment during Department-held hearings):

While this committee will focus on changes made by the VAWA to the campus safety and security reporting requirements in the Clery Act, the Department continues to review the valuable testimony offered at the public hearings and the comments submitted through the public comment process regarding other proposed rulemaking topics. These include cash management of funds provided under title IV Federal Student Aid programs, regulations designed to prevent fraud, State authorization for programs offered through distance education or correspondence education, State authorization for foreign locations of institutions located in a State, clock to credit hour conversion, the definition of “adverse credit” for borrowers in the Federal Direct PLUS Loan Program; and  campus-based Federal Student Aid program reforms. We anticipate announcing our intention to establish a negotiated rulemaking committee to consider some or all of these other proposed rulemaking topics in the coming months.

Some Thoughts on the Gainful Employment Negotiated Rulemaking Session – Part 1

Posted in Department of Education, Gainful Employment, Higher Education News, Higher Education Policy

Dennis Cariello

I attended the negotiated rulemaking sessions hosted by the U.S. Department of Education to discuss the Department’s proposed “gainful employment” rule.  As we reported previously, these sessions are a second attempt at enacting a regulation to regulate all programs at proprietary institutions of higher education and vocational programs (certificate programs) at other institutions based on a  debt to income measure.  The draft version of the Department’s gainful employment rule (which has many deviations from the 2011 published gainful employment rule that was invalidated by a court order; this was our take on the 2011 version) would impose a 8% debt to income ratio and a 20% debt to discretionary income ratio on these programs.

The negotiated rulemaking sessions (or “neg reg”) began on Monday, September 9 and lasted until 12 noon today (Wednesday, September 11).  There will be a final session from October 21 to 23.  The New America Foundation did a live blogging of the neg reg session (no recordings or transcripts of the sessions were permitted) that is worth looking at to get a sense of the discussion (Monday’s session, Tuesday morning, Tuesday afternoon, and Wednesday morning  Also, here is Inside Higher Ed’s take on the Monday and Tuesday sessions).

One of the impressions I am left with is that the Department may have made a mistake by only having two sessions.  If the goal of this process is to merely hear additional views that the Department can use in coming up with a draft rule, then the Department was probably fairly happy with the results so far.  The discussion over two days (the first day included a number of procedural issues not germane to the rule) was often wide ranging and presented a number of issues for the Department’s consideration – including issues with the draft rule and proposals for new rules altogether.  So, if the goal was educating the Department, this neg reg is going well.

If, however, the goal was to achieve consensus on a rule, the Department can’t be too happy.  Typically, there are three neg reg session to a process – the first is a “get to know everyone” session (a list of the negotiators is after the jump) that includes a broad discussion on the topics.  This is usually helpful and necessary, as many negotiators don’t know each other.  This conversation serves a useful purpose leading up to the substantive negotiations.  That is very much how the discussion felt this week.  While the negotiating committee was able to review all the topics the Department wanted discussed, there wasn’t a lot of time spent on specifics.  While issues with the rule were raised (Marc Jerome of Monroe College raised some particularly interesting points on how the rule would work in practice), few solutions to these issues were offered and there was no agreement from the committee on even whether these issues were problems.  If the Department believes consensus could be reached – and many have opined that it cannot given the committee’s makeup – the next (and final) session is going to have to be awfully substantive and efficient to achieve consensus.

I will have more thoughts (including on some policy ideas) in future posts.  But the thing I’m thinking now is we may need more time to do this right. Continue Reading

Department of Education Publishes Gainful Employment Proposal for Negotiated Rulemaking

Posted in Department of Education, Gainful Employment, Higher Education News, Higher Education Policy

Dennis Cariello

Earlier today, the U.S. Department of Education published a new web page containing ”information about our rulemaking efforts to establish standards for programs that prepare students for gainful employment in a recognized occupation.”  This site includes a draft version of the Department’s gainful employment rule, a comparison between the 2013 draft gainful employment rule and the previously published gainful employment rule, and a number of other documents. In sum, (and this is a preliminary view) the proposed rule:

  • gets rid of the repayment rate metric
  • applies a 10-year amortization schedule for debt from all programs (previously, bachelors programs had 15 year schedule and graduate programs had a 20 year schedule)
  • eliminates the cap on debt (schools could cap median debt to tuition and fees)
  • reduces the debt to earnings threshold from 12% to 8% and debt to discretionary earnings threshold from 30% to 20%
  • revives an earlier concept of being “in the zone” if an institution has a debt to earnings ratio between 8%-12% and a debt to discretionary earnings threshold between 20%-30% in which sanctions are imposed
  • reduces the minimum size of a program to be reviewed from 30 students to 10 students
  • programs lose Title IV eligibility if they fail two out of three years (as opposed to three out of four years) or if a program fails to pass for one year out of four (essentially a cap on the time a program may remain “in the zone”

There are a number of issues we intend to explore about the proposal in the days leading up to the September 9, 2013 negotiated rulemaking session.  One in particular concerns how the Department will collect information on private loan data without violating the prohibition on creating a unit record system.  As you may recall, the subject that was covered explicitly in the March 19 2013 ruling on the Department’s motion to amend the judgment in the court action on the gainful employment rule.

One issue worth looking at now, however, is the effect of the rule.  Here is what the Department has published on what the effect of the new rule will be as opposed to the old. In short – more programs will be subject to the rule (the byproduct of reducing the size of the program (click on the chart to get a better view)  Essentially, while 90% of programs passed under the old debt to earnings ratios, only 79% will pass the rule this time around:

Obama’s Higher Education Proposals

Posted in Department of Education, Higher Education News, Higher Education Policy, Uncategorized

David P. Lewis

With some fanfare, last week President Obama unveiled his proposal for higher education reform.  The principal focus of the Obama proposal is: (i) the development of a ranking system for colleges based on such measures as access (such as percentage of students receiving Pell grants), affordability (such as average tuition, scholarships, and loan debt), and outcomes (such as graduation and transfer rates, graduate earnings, and advanced degrees of college graduates), and (ii) the passage of new legislation that would allow the use of these resulting rankings as the basis upon which to award federal aid, with students attending high-performing colleges receiving larger Pell Grants and more affordable student loans.

In general, I find more information to be better than less information.  To the extent that the Department of Education can develop a ranking system that captures information not already available a few Google clicks away, then this could be a useful.  Even if the information is available elsewhere, if the new system merely serves to capture and house it in a single location, then it may still be useful (although the use may be quite limited).   For now, until the effort gets underway and a prototype (and the substance) of the ranking system becomes available, I am skeptical that anything developed by the Department will add meaningfully to the information already available from other sources with minimal effort.  For example, US News & World Report already publishes a list that ranks schools by the percentage of their respective students that receive Pell grants (a ranking of so-called “economic diversity”).

The second piece of the proposal – directing federal aid to students attending the high-ranking schools – seems at first blush a bit more problematic as it carries with it the ability of the federal government to favor certain schools (or types of schools) while disfavoring others, based on how the ranking system works.  As one simple example, for-profit schools would presumably score well on the “access” measure, since their target students tend to be lower income working adults, but may be expected to score less well on the ”outcomes” measures, again since their target students tend to be lower income working adults.   If the federal government chooses to weight “outcomes” more than “access,” or within the “outcomes” metric chooses to weight advanced degrees over employment, does this provide a means to tilt the federal aid playing field away from the proprietary sector?  Conversely, if “access” is weighted more than “outcomes,” could this in effect encourage lower income students to attend schools that perform poorly on outcomes metrics?   How would the system account for the impact of the 90/10 rule (applicable only to proprietary schools) on affordability?  Since not all of the measures will point in the same direction, how the government decides to weight the measures and allocate the funds will dictate the winners and losers in such a system.

In the end, this type of change to the funding system would require legislation.  Accordingly, its prospects of coming to fruition, at least currently, would seem slim indeed.