Program Integrity Rulemaking Panel Fails to Reach Consensus

Negotiators on the program integrity and improvement rulemaking panel failed to reach consensus on a package of proposed regulations, leaving the U.S. Education Department free to craft final rules on a range of consumer protection issues. The fourth and final rulemaking session concluded this week with panelists still clashing over campus debit cards and state authorization of online programs.

On state authorization, the department and several negotiators representing student and consumer groups remained insistent that distance education programs could be eligible for federal student aid only if they were approved by a state with an "active process" for authorizing them – a process that went beyond passively approving programs merely if they were accredited or had been operating in the state for a long time, The Chronicle of Higher Education reported.

The department said it would not dictate specifically what such an "active process" must entail but would suggest in a preamble that it might include such criteria as a review of the institution's financial viability and its student refund policy.

Negotiators representing colleges and accreditors, who throughout the talks have criticized the proposal as burdensome and bureaucratic, called that "a deal-breaker." They said the proposal would leave many colleges and their distance education students at the mercy of states.

Regarding campus debit cards, consumer advocates and financial institutions disagreed on how widely new fee restrictions on student banking products should be applied, according to Inside Higher Ed. Companies that provide such products to students argued that the Education Department did not have the authority to regulate student ID cards that may not necessarily involve federal student aid dollars.

The department's latest proposal would ban certain fees and restrict the marketing of any student account "sponsored" by an institution. Student debit cards, prepaid cards and ID cards that double as debit cards would be subject to those rules.

Consumer and student advocates, meanwhile, praised the department's efforts to more tightly regulate those products.

The rulemaking panel had previously come to an informal agreement over new standards for PLUS loans to graduate students and parents, a proposals that would require the foreign outposts of American-based colleges to be approved by local authorities in order for their students to be eligible for federal aid, new regulations on how clock hours are converted into credit hours, and the conditions under which students may receive federal aid for courses they need to retake.


Related Links

The Chronicle of Higher Education

Inside Higher Ed