Colleges Could Lose Title IV Eligibility Under New Interpretation of State Authorization Rule
April 04, 2013
Many colleges throughout the country could lose their eligibility to receive federal student aid under a new interpretation of the U.S. Education Department’s “state authorization” rule, reports the Chronicle of Higher Education.
In October 2010, the agency issued new rules derived from concerns that states were not doing enough to oversee colleges authorized to operate in their states and seeks to rein in fraud and abuse by colleges ” for-profit schools, in particular ” participating in student aid programs.
The regulations do not extend to distance education programs, but still require colleges to be licensed in their own state. The department is currently interpreting the rule in a way that would disqualify state licensure by means of accreditation ” a process that allows colleges to bypass the ordinary licensure process and be granted state approval based on their accreditation status. That interpretation could affect hundreds of colleges in at least 10 states and the thousands of students who receive financial aid at those institutions.
The Education Department sent letters to several Florida colleges in recent weeks, warning them that licensure by means of accreditation is not sufficient to comply with the state authorization rule. The states and the Education Department have until July 1 to resolve the dispute. At that time, all colleges must be in compliance with the department’s program integrity rules, including state authorization.
Related Links:
The Chronicle of Higher Education
https://chronicle.com/article/Many-Colleges-Could-Lose/138263/?cid=pm&utm_source=pm&utm_medium=en
Michelle Cormier Mott
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