AACRAO Recommendations for Final Rules on Voluntary Education Programs

Last week, the U.S. Department of Defense (DoD) published final rules for its Voluntary Education Programs.

The DoD in August 2013 issued its intent to propose changes to the rules for participation its Tuition Assistance (TA) program. AACRAO, along with a group of other higher education associations, submitted comments regarding the proposed new rules. The comments outlined a number of issues, including the return of TA funds after withdrawal, readmission policies, the removal of fees from approved uses of TA funds, and requirements regarding the distribution of consumer information tools, among other things.

The final rules, issued last week, do take into account some of the issues and concerns raised through public comments. A breakdown of the submitted comments and the DoD responses is listed below.

Overall, AACRAO is pleased with the revised agreement. The final rules addressed many, but not all, of the issues and concerns expressed by AACRAO and other higher education organizations. While there are still a few issues that could pose a problem for certain institutions, we recommend that all institutions wishing to participate in the DoD's TA program sign on to the updated MOU before the July 14, 2014 deadline.

The final rules require that TA-participating schools also be certified to participate in the U.S. Department of Education's Title IV student aid programs. Institutions with a current DoD Voluntary Education Partnership MOU that have initiated their application for Title IV eligibility with the Department of Education will have 18 months to successfully meet the Title IV requirement. New applicants will be required to meet the Title IV requirement before signing a DoD Voluntary Education Partnership MOU.

Return of TA Funds after Withdrawal

Comment: R2T4 regulations were not designed to apply to return of all types of federal funds. Wholesale adoption of R2T4 requirements is impracticable and will not serve the interests of TA recipients. Alignment with R2T4 does not require blanket adoption of R2T4 requirements; adherence to the general principle of the HEA's R2T4 provision offers a way to think about a workable approach to TA refunds.

Response: The DoD amended the final rule requiring the return of unearned TA funds on a proportional basis through at least the 60 percent portion of the course. TA funds are earned proportionally during an enrollment period, with unearned funds returned based upon when a student stops attending. In instances when a Service member stops attending due to a military service obligation, the educational institution will work with the affected Service member to identify solutions that will not result in a student debt for the returned portion.

Title IV Participation

Comment: We understand that it is important to DoD that all institutions that receive TA Program funds also be participants in the Title IV programs. We are concerned that as currently drafted the proposed MOU is unnecessarily redundant and lacks appropriate procedural mechanisms by which to address possible non-compliance.

Response: This final rule is updated to clarify participation in Title IV as "certified to participate" and "Title IV certification" may be provisional so long as the educational institution maintains eligibility to participate in the Federal Direct Loan Program. The requirement for Title IV participation is part of the Defense Department's quality assurance program for higher education that is in direct support of the President's Executive Order 13607 and Principles of Excellence. Quality assurance includes not only the delivery of quality programs by educational institutions, but also the meeting of minimum requirements in the areas of financial/fiscal responsibility and administrative capability that demonstrate program integrity and the continued support for quality. In addition, there is an expectation that educational institutions will be participants in federal student aid loan and grant programs because the final rule requires them to provide a clear and complete explanation of available financial aid and application processes, to include Title IV student aid programs. The DoD is providing 18 months following the publication of this final rule in the Federal Register for educational institutions to successfully meet the Title IV requirement.

Lead Generators and Aggressive Marketing and Misrepresentation

Comment: The proposed MOU seems to forbid institutions from using third-party lead generators. The Proposed Rule and MOU are unclear as to whether an institution that receives TA Program funds must not use a third-party lead generator to identify prospective students who are service members or otherwise TA-eligible, or must not use a third-party lead generator to identify any prospective students. The Proposed Rule and MOU are also unclear as to how DoD defines "third party lead generator." Although we are committed to end "fraudulent and unduly aggressive recruiting techniques on and off military installations," a ban on third-party lead generators is overbroad and is inconsistent with ED requirements.

Response: The DoD amended the final rule reorganizing the information surrounding "unfair, deceptive, and abusive" practices to clarify restrictions and provide examples to enhance understanding. In addition, the rule articulates the entities subject to these requirements extend beyond traditional employees to agents of the educational institution, providing examples such as third party lead generators and marketing firms to address parties of particular concern to the agency. The department also amended the final rule to define educational institution agent and this term is incorporated throughout the final rule as appropriate. Further, the DoD amended the final rule to clarify that certain educational institution materials available through the education center are permissible and will not be considered personal commercial solicitation.


Comment: The Proposed Rule would remove all references to the use of TA Program funds for "fees"; thus, the Proposed Rule and MOU appear to require that TA Program funds be used only to pay tuition. Universities and colleges follow no universal approach to the classification of costs as "fees" versus "tuition." Thus, an institution may include certain costs in its "tuition," while another institution may include those costs as a separate fee. We therefore request that the references to fees be restored to the Proposed Rule and MOU, and any statements that TA Program funds may not be used for fees should be eliminated. TA recipients should be able to use their TA benefit to cover both tuition and fees, up to the cap.

Response: The DoD amended the final to promote increased transparency by requiring educational institutions that bundle tuition, fees, or books into a consolidated cost to detail the charges of fees and books separately for Service members participating in the TA program. In addition, the rules provide examples of charges, not directly related to course instruction, that are considered fees for the purposes of participating in the TA program. The final rules clarify that books not covered by TA funds include traditional book formats such as textbooks and reference or instructional materials but also non-traditional book formats such as ebooks and CDs/DVDs.


Comment: We understand that the proposed MOU would require institutions to readmit service members to an academic program if they are temporarily unable to attend class or must suspend their studies due to a military service requirement; a separate clause obligates institutions to comply with ED's regulation regarding readmission requirements for service members, namely 34 C.F.R § 668.18. 3/ Section 668.18 applies only to an absence of more than 30 days. As a practical matter, some absences of fewer than 30 days may not trigger the need for readmission because the student's absence does not result in a withdrawal under the institution's policies. Accordingly, we request that proposed MOU be clarified to provide that if a service member is temporarily unable to attend classes for fewer than 30 days within a semester or similar enrollment period due to military service obligation, the institution must readmit the student if such absence results in a withdrawal under the school's policies. We also request confirmation that an institution's substantive obligations with respect to readmission of service members is as described in 34 C.F.R. § 668.18, and that the Proposed Rule and MOU would entail no additional institutional obligations with respect to readmission of service members.

The DoD did not respond to this comment. The final rule remains unchanged.

Consumer Information

Comment: We understand that the MOU requires institutions to direct students to information regarding certain tools that can help them decide where to attend college. In particular, we understand that the MOU requires institutions to communicate to prospective students the website addresses that provide information about the College Scorecard, the Shopping Sheet, and the Consumer Financial Protection Bureau ("CFPB") comparison tool. If our understanding is incorrect, we request that DoD provide clarification.

Response: The DoD amended the final rule to clarify, "Before enrolling a Service member, provide each prospective military student with specific information to locate, explain, and properly use the following ED and CFPB tools . . ." The department also added The College Navigator as a supported tool in anticipation of student outcome measures reporting directed in support of the President's Executive Order 13607 and Principles of Excellence.

Military Service Approvals

Comment: We request clarification on what constitutes "automatic program renewals, bundling courses or enrollments" and whether the practice is a prohibited or discouraged.

Response: Educational institutions are asked to refrain from automatic program renewals in the final rule – this typically involves blocks/groupings of courses and automated, block registrations. The DoD amended the final rule to state "each course enrollment" signifying the course-by-course basis of TA approval in support of our position that bundling courses for registrations is not authorized. This is especially important with the high operational tempo of the force.

Delivery Requirements/Approval of New Course or Program Offering

Comment: We request clarification of the evaluated educational plan requirement to include distinguishing between "educational plan" and "evaluated educational plan" definitions and clarifying the time requirement for providing a new evaluated educational plan when a Service member has a Service education advisor approved change of educational goal or major at the educational institution. In addition, we requested the realignment of the paragraph which addresses accreditor approval for new courses or programs to a more appropriate section that discusses TA approval or eligible courses/programs.

Response: The DoD amended the final rule to remove the definition for educational plan and enhance the definition for evaluated educational plan to include reference to traditional educational institution nomenclature for this as a degree audit. In addition, the department amended the final rule to add "within 60 days" clarifying the timeframe for completion of a new evaluated education plan due to a service education advisor approved change of educational goal or major at the educational institution. Lastly, the DoD moved the paragraph addressing accreditor approval for new courses or programs to align with educational institution requirements for TA.

Failure to Resolve Complaints

Comment: Our member institutions are deeply committed to providing quality education to service members and other TA-eligible individuals. We support a complaint system that swiftly and efficiently resolves legitimate concerns that service members or other TA-eligible individuals raise regarding an institution. To protect our institutions from unfounded complaints, however, the MOU should include language to confirm that removal from the Participating Institutions list will only be the result of a substantive complaint. In addition, the MOU should include language to confirm that institutions will have due process before they are removed from the Participating Institutions list.

Response: The DoD amended the final rule to clarify that the department will work with the educational institution to resolve complaints as appropriate. In addition, clarification is given for complaints that may elicit further review, referrals to other government agencies/regulators and potential penalties for recurring, substantive complaints or demonstrating an unwillingness to resolve complaints.

The DoD did not respond to the request to confirm that removal from TA participation would only result from a substantive complaint or that institutions would have due process before they are removed. The language in the final rules remains unchanged.


Comment: The section of the proposed rule that addresses reimbursement of funds when a student fails to attain certain grades in his or her coursework may be too stringent. We suggest that attaining a B or higher in graduate level courses may be setting a higher bar than the DoD intends for students who are engaged in coursework at this level. Indeed, requiring a B or higher grade could discourage students from pursuing advanced coursework. We propose that the MOU revert to the grade used in the current regulation: C. In addition, we suggest that DoD allow a student to resolve an "incomplete" within the timeframe set forth by the institution or within one year of class completion. A six-month timeframe may be too short for some students because a class may be offered only once per year. So, for example, if a student received an incomplete for a course only offered in the fall semester, he or she may need to wait until the following fall semester to complete the course.

Response: The DoD is intentionally raising the bar regarding minimum grade by setting stricter minimum standards for coursework when a Service member is using TA funds as part of an overarching strategy to improve military student success. Military students are not traditional nor are they full-time students given their military duties and responsibilities. Historically, industry standard for graduation from undergraduate institutions is a minimum 2.0 average or "C" and maintaining at least a satisfactory GPA can be used to determine one is ready to advance to the class or next level. Tuition dollars and military student time is both limited and valuable so we want them to maintain focus and understanding expectation is critical. The department amended the final rule to clarify that the GPA requirements for continued TA usage relate only to those courses funded with TA.


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