The Biden administration on Tuesday circulated draft proposals to overhaul regulations that govern how and when colleges and universities—particularly for-profit institutions—may access federal funding, Politico reported. The draft college accountability proposals include plans to rewrite the 90-10 rule, gainful employment, and other key higher education policies and come ahead of public negotiating sessions that begin next week.
Last month, the U.S. Education Department announced plans to establish a negotiated rulemaking committee on institutions and programmatic eligibility. Negotiators will work to reach consensus on seven regulatory topics in the coming weeks, as they meet for three rulemaking sessions on January 18 to 21, February 14 to 18, and March 14 to 18.
The draft proposals, obtained by Politico, offer details on how the Biden administration intends to approach its sweeping college accountability agenda.
The negotiated rulemaking process will carry out provisions passed by Congress last year that close a loophole in the 90/10 rule affecting military service members and veterans. The American Rescue Plan Act of 2021, signed into law in March, expanded the 90 percent cap on for-profit colleges' funding to include various types of "federal education assistance funds," including veterans' benefits. Previously, military and veterans' education benefits did not count toward that threshold despite being federal aid.
The Biden administration's initial proposal does not explicitly list which types of federal funds would count toward the 90 percent cap under the new calculations, reported Politico. Instead, the proposal calls on the department to publish an annual list of other federal agencies that provide education assistance and set up data-sharing agreements with those other agencies to track such funding. Additionally, the administration proposals include plans to eliminate other "loopholes" in the 90/10 rule calculations. For example, the Education Department wants to narrow the type of revenue that a for-profit college can claim as non-federal revenue on the 10 percent side of the equation.
Meanwhile, the administration did not offer a concrete proposal on how it wants to reinstate the Obama-era gainful employment rule, previously repealed by former Education Secretary Betsy DeVos. Department officials indicated that they will consider reusing debt-to-earnings rates to judge college programs, but are also seeking feedback on other metrics, including loan repayment rates and earnings thresholds.
The draft proposals would also revamp how the Education Department oversees for-profit college conversions, calling for a "clearer, more streamlined process" for handling such transactions. Another plan would give federal regulators greater powers to require collateral from colleges that may be at risk of financial collapse, according to Politico. Under the proposal, colleges that run into trouble with state regulators or in other legal proceedings accusing them of fraud would automatically face greater scrutiny from the Education Department.
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