Session 3 – Day Two Agenda
TRIO Programs, State Authorization, and Cash Management

Overview
Yesterday, the Program Integrity and Institutional Quality Federal Negotiated Rulemaking Committee (Committee) finalized negotiations without achieving consensus on Issue Paper 4: (www2.ed.gov/policy/highered/reg/hearulemaking/2023/session-3-issue-paper-r2t4-v3.pdf) Withdrawals and Return of Title IV Funds, withheld a final vote on consensus on Issue Paper 3: (www2.ed.gov/policy/highered/reg/hearulemaking/2023/session-3-issue-paper-distance-education-v3.pdf) Distance Education in order to work towards an alternative to the existing proposal included within the package of revisions to repeal the eligibility of distance education programs offered by institutions of higher education who measure program length in clock hours to provide asynchronous instruction, and began discussions on Issue Paper 2: (www2.ed.gov/policy/highered/reg/hearulemaking/2023/session-3-issue-paper-state-authorization-v3.pdf) State Authorization, ahead of schedule according to the Session 3
Agenda. A summary of Day One is provided below.

Today’s deliberations were originally set to begin with Issue Paper 6: (www2.ed.gov/policy/highered/reg/hearulemaking/2023/session-3-issue-paper-trio.pdf) Federal TRIO Programs, but with the State Authorization discussions having already begun, it seems as though the Committee will attempt to complete them this morning before turning to the Department’s proposal to broaden participation by adding language that expands eligibility for all students who have enrolled in or who seek to enroll in a high school in the United States, territories, or Freely Associated States, which are the geographic areas served by the TRIO programs.

Given where yesterday’s discussions on State Authorization concluded, CSPEN anticipates a lengthy discussion ahead this morning on the entire package of revisions which may last into the afternoon. As we have shared with you in the past, key topics of concern include:

  • Potentially undermining the benefits of State Reciprocity Agreements for distance education programs by enabling the State to enforce its own consumer protection, mandating new student complaint processes, and requiring that the governing body of State Reciprocity Agreements must consist solely of representatives from State regulatory and licensing bodies, enforcement agencies, and attorneys general offices.
  • Mandating additional conditions of participation for institutions, for example an institution must obtain within one year direct authorization from any participating State where it enrolls more that 500 students.
  • Requiring each state to have a process for communicating information about a student’s compliant and requiring communication of a student complaint with the State entity responsible for administering State Reciprocity Agreements.

The Department and the non-Federal are clearly not in agreement on the package and a myriad of the specific proposals contained within the package. CSPEN will continue to pay particular attention to the forced increases in State oversight responsibilities contained within the proposal, the application of review of and institutional compliance with all state laws, the exemption criteria which do not align with reasonable timelines for implementation and are confusing even to the institutions who may or may not benefit from them, and most notably the effect the proposed regulations will have both on the current State Reciprocity Agreement regime and its future.

In the afternoon, the Agenda is slated to shift to discussion on Issue Paper 1: Cash Management. CSPEN will be paying particular attention to several key areas of discussion including:

  • Prohibiting the inclusion of charges for books, supplies and other educationally related goods and services as part of Title IV funds credited on a student’s ledger account.
  • Requiring the institution to individually discloses the cost of such books, supplies, and other educationally related goods and services to the student prior to any authorization being signed by the student or parent and also requiring written authorization each payment period.
  • Requiring the return or reallocation of the cash value of meal plans that go unused at the end of each payment period withing 14 days.
  • Making significant changes to the relationships between institutions and third-party banks and other lending entities as part of Tier One and Tier Two Arrangements.the repeal of institutions ability to include the cost of books and supplies as part of tuition and fees,

Handicapping Day Two
CSPEN finds it very hard to envision a scenario in which the Committee will support consensus on the State Authorization package. It is anticipated that multiple non-Federal negotiators will be opposed to the proposal and thus consensus will not be achieved.

CSPEN anticipates that the Committee is likely to support the work of the Subcommittee and the proposals contained in the Federal TRIO Program package.

CSPEN is uncertain whether or not the Committee will begin, much less complete consideration of the final Cash Management package. As noted above, this package also contains several contentious regulatory revisions which may well cause one or more non-Federal negotiators to oppose consensus of the package.

CSPEN will provide a summary of the final outcome or latest status report on each of the three Issue Papers in our Wednesday morning email, which will also outline the Issue Papers what remains to be addressed on Wednesday and Thursday. What will be very important to keep an eye on by the conclusion of tomorrow’s deliberations is whether or not the Department and the non-Federal negotiators on the Committee will be willing to reconsider revisions to the Session 3 proposals or not, and whether or not this will result in a log-jam of negotiations on multiple proposals to each Issue Paper/package on Thursday.

Day One Summary
Issue Paper 4 (www2.ed.gov/policy/highered/reg/hearulemaking/2023/session-3-issue-paper-r2t4-v3.pdf) : Withdrawals and Return of Title IV Funds (R2T4)
As CSPEN projected, the reason that consensus was not achieved on the full R2T4 package was based upon the new proposal added prior to the final session which require attendance taking for each course offered entirely through distance education and more specifically the Department of Education’s refusal to add “direct assessment courses” to an exemption from the requirements the Department accepted prior to the final meeting at the request of non-Federal negotiators for “dissertation research courses.”

It must be noted that the Committee and all of the non-Federal negotiators had previously provided no opposition to the rest of the changes that were previously offered and discussed, including a new definition of determining when “a student is not considered to have withdrawn” and revisions to the determination of the percentage of the payment period or period of enrollment completed in the determination of R2T4 using a new assessment point of when a student has begun attendance in the payment period for clock hour programs or begun attendance in the module for modular programs. CSPEN noted this support yesterday and predicted that there would be support for the vast majority of the R2T4 package.

In light of the Committee’s support for all but one key issue, CSPEN believes that the Notice of Proposed Rulemaking is likely to look very similar to, if not identical too, the final R2T4 package (Issue Paper) when published sometime later this year.

Issue Paper 3: (www2.ed.gov/policy/highered/reg/hearulemaking/2023/session-3-issue-paper-distance-education-v3.pdf) Distance Education
As CSPEN forecasted, the major discussion regarding this package of regulations focused upon efforts to understand the need for and assessment over the TRIAD of a new regulatory definition under “additional location” of a “virtual location”, the proposals to repeal the ability for clock hour institutions providing distance education to do so in an asynchronous environment, the addition of a new definition of “distance education course,” and new mandatory reporting by institutions to the Secretary of all Title IV recipients enrollment in distance education or correspondence courses.

Throughout the dialogue the Department and the non-Federal negotiators were successful in drawing out of the Department additional information on their intent in proposing the regulations. Armed with a greater understanding of and appreciation for what are largely data collection efforts, the non-Federal negotiators seemed to be OK with the “virtual location” addition and, with changes were added, supportive of the distance education reporting requirements.

Opposition still remains with the repeal of ability for institutions providing distance education programs in clock hours to provide asynchronous instruction. Many different non-Federal negotiators continued to query the Department on both the rationale and justification for the repeal, noting that this revisions would have a significant impact on a number of different educational disciplines where the delivery of education is in high demand and harm students seeking access to these programs currently provided. The Department once again attempted to share information regarding their concerns, shared specific examples based upon audits and program reviews, and asserted that non-compliance in this area is growing quickly and that they intend to stop it from spreading further.

Non-Federal negotiators urged the Department to consider an alternative to straight repeal, recommending the development of specific criteria (“safeguards” or “guardrails”) which could be used to determine proper distance education asynchronous instruction for clock hour programs. The Department acquiesced to the request and said that it would be willing to consider a proposal in lieu of repeal. This acceptance by the Department to work with impacted parties was immediately met with opposition by other non-Federal negotiators who feel that abuses cannot be prevented with any proposal short of repeal.

Nevertheless, the Committee agreed to try work with the non-Federal negotiators on a new approach that threads the needle between the desire to reign in abuse and continue to provide access to students participating in successful clock hour distance education programs.

Issue Paper 2: (www2.ed.gov/policy/highered/reg/hearulemaking/2023/session-3-issue-paper-state-authorization-v3.pdf) State Authorization
With an agreement to set aside a final vote on consensus on the Distance Education package, the Department and facilitators moved forward in the Agenda and began final discussions on State Authorization. Following the Department’s review of the considerable revisions and additions to the final proposal; multiple non-Federal negotiators each sought the ability to ask the Department questions and offer their serious concerns with both the most recent revisions and additions, as well as the underlying proposals previously discussed in the prior sessions.

It is quite evident that a significant number of non-Federal negotiators oppose the current package at both the macro and micro-level. Specific discussions during the hour of negotiations yesterday focused upon the exemption criteria and the institutional criteria under the new State Authorization regime.

Live Stream Registration
For those of you interested in viewing the negotiations live, register here (web.cvent.com/event/ecad855b-f15d-403b-86d0-7515d116ed39/regProcessStep1) .

What’s Next
According to the Department’s Agenda, Wednesday the Program Integrity and Institutional Quality Committee will attempt to conclude negotiations on Issue Paper One: Cash Management in the morning before turning to Issue Six: Accreditation in the afternoon. Thursday’s Agenda is now modified to include not only the completion of the discussions regarding Accreditation, but also a return to Distance Education and efforts summarized earlier in this email to develop an alternative approach to repealing the delivery of asynchronous delivery for distance education programs measured in clock hours. As noted above, it will be important to see if this is the only, or just one of many revised proposals that will be considered before votes on consensus of the Issue Paper/package of proposed revisions are taken.