Distance Learning and Educational Innovation Subcommittee – January 18, 2019, Morning session

you you you you okay we’re we’re gonna start and I want
to welcome all of you back no two-hour delay today so depending on
your perspective actually I’m really happy that did that about that because
we I wouldn’t have learned to lose the time so I’m happy that we’re back here
again today we’re gonna pick up where we left off a couple of things I so come in
this point just the anchor you know I came in this morning on the Metro and I
was behind all these tourists who were driving me crazy as you know and would
not being able to operate the ticket machine and then actually at the Rosslyn
metro a wife was yelling down the stairs to her husband who was halfway to maybe
a quarter the way down the stairs in Rosslyn metro is huge you know it said
the escalators he says walking back up the the downs
there as he’s talking to her about which direction are going to go and her rosin
only has one track and I’m you know I’m assuming they’re not going to Vienna for
the day to see the sights there they’re going into Washington DC so that narrows
it down some so um as I was being very smug in and in all the Washington my
hubris over there how superior I was to them for being able to use the measure I
thought back to my own experience this summer when I went to Montreal and I was
the idiot trying to operate the ticket machine and had no idea and like 50
people behind me rolling their eyes at the dumb American he can’t figure out I
get a ticket out of the machine so it was just kind of funny when you when
those things crossed your mind if you sometimes think that well sometimes
you’re gonna be the person who’s but I never walked up the down escalator so
yeah yeah so um as far as today’s proceedings go we’re gonna pick up what
David was discussing state authorization yesterday do you want to just kind of
reiterate something and I think for those of us who have been negotiators on
at the main committee it’s hard to get out of this mindset of of consensus
because that’s always what you’re seeking on the main on the main
committee and I just want to remind everybody and I’m reminding myself that
that’s not what we’re doing here so we’re trying to make recommendations to
the to the main committee and I think that in order to do that and we don’t
need consensus which again is not to say that were in any way going to disparage
an opinion that’s a minority opinion we’re going to make sure that all the
way the entire group thought was is reported out but I don’t think that
should preclude us from if we if we if most of us can come up with something we
think is a recommendation we’ll get the other side of it as well and then we can
move on but I don’t want to get bogged down and all of us trying to convince
everybody that we need to vote a certain way because that’s just not what this
what these subcommittees are about so it’s one a point that in order to
facilitate getting through topics and getting discussion out there the ones
that we think that you guys think you might want to propose alternate language
we remind everybody we have another month for people to think about that and
do that so we don’t necessarily have to sit here and work on language right now
and instead we should probably get through and get everybody’s opinions out
on as many topics as possible right so with that I’m going to turn it over to
David to continue his discussion on state authorization David excuse me I
notice the suit has better placard up maybe she wanted to make a fast comment right before we left on state
authorization and this I think this is our opportunity to get it right
you know it’s caused a lot of unintended consequences we have been concerned
about our student consumer protection the way that it was before I think there
were a number of things that the department did to help facilitate this
and from that we came about with state authorization reciprocity agreements but
I do have some questions you made the statement yesterday we are thinking of I
believe you said completely eliminating state authorization language and let me
yeah I want to address that too because I think I think leadership’s position is
is a bit different after hearing some of the conversations yesterday so let me
talk through what where we stand right now right now leadership is interested
in in hearing from from this table and from ever all of you what you think is
important to keep from those old regulations from the regulations that
were promulgated in 2016 and what needs to be changed we heard
quite a bit of support for maintaining the concept of state authorization for
distance ed as well as the concept of reciprocity while we also heard the need
for some significant changes in some parts of the regulation as it’s
currently written so if if that is the case we’d like to hear from folks at the
table number one what are the most important things to keep from the
regulation regulatory language as it exists even though it’s not implemented
right now as it as it currently exists and what really needs to be changed or
eliminated in the views of the subcommittee members so we’d like to
have that conversation this morning so that we can kind of come up with the
things that we that we might want to hold on to because that we we got the
impression yesterday that there was a sense that this was actually quite
important and that not all of it really needed to be scrapped so we can we can
tap that conversation now just a quick question because right now we’re in the
definition section yeah yeah we so what I’d like to do if we are willing to have
that conversation this morning is to cover all the things all of the sections
that relate to state authorization so that would include this definition in
600 point to the language in 600 point 9c which again is not currently
implemented but it’s in it is redlined and it’s in your materials and then also
the language on disclosures in 34 CFR 668 point 50 which again was added in
2016 but has not been implemented yet it’s been delayed so though but those
are the areas that I think we can look at to determine whether we want to keep
any of it or whether we should remove or change the language that’s there so I
think it it might actually be helpful we were looking we started at this
discussion because we started talking about the reciprocity agreement
definition it may be helpful for us to look at 600 point nine so and have me
explain briefly what what that does and how the reciprocity definition connect
with that so if you guys could turn to 600 point nine and I have to have to
find it my own materials here so give me a sack thirteen or fourteen fourteen so
it’s page 14 of the part 600 Red Lion edits 13th and limit and whenever you
guys are ready I’ll get started yes readily okay all right so as you guys are getting
getting this section and maybe taking a moment to read it essentially what the
language in 34 CFR 600 point 9 C does is it creates requirements for an
institution to be authorized in all states in which it operates including
under a reciprocity agreement between states in which states recognize the
institution’s authorization in the state in which it’s physically located the
regulations also require a complaint process to be in place for students in
all of the states in which the institution is operating Russ mentioned
that there there have been some concerns about the language that’s there about
where each student resides as opposed to where each student is located and we of
course we can take a look at that but that’s the general concept is that
before these regulations were promulgated in what we negotiated it in
2014 and we actually published the regulation in 2016
there there was no federal regulation that looked at what states what state
laws existed regarding authorization for students who were living in a state and
taking coursework through distance education from an institution that’s
located in another state so if you’re if you’re living let’s say in Montana and
an institution also is in Montana there’s not really a problem in most
cases because the state has authority over the physical institution in Montana
but the federal regulations didn’t address cases where the student was
living in Montana and the institution was in Arizona and Montana had some add
some requirements for the student who was living in their own state and
attending through distance ed in another state so this regulation was intended to
address that and give a federal hook to say that if
Montana says that you can’t operate in Montana then you the students in Montana
would not be title for eligible even without this regulation as Russ pointed
out yesterday all of the state rules would still apply
none of this affects the state’s ability to in for to create and enforce their
own laws regarding distance education but this connects the state laws to the
federal to students federal title for eligibility and that’s and that’s also
why we created a definition of state reciprocity because that outlines what
the department considers the necessary requirements to have a reciprocity
agreement that meets the definition of state authorization the other thing and
we’ll get to this in a second but I might think I’m gonna hold for a moment
and talk and answer questions but the last thing that we did in the 2016
regulations was we promulgated a number of disclosure requirements that
institutions were required to make for students who were in a hundred percent
distance education or correspondence programs but I think I’m gonna hold on
that until we have talked through this part first there’s anybody have any
questions anything I can clarify about about the language that’s in there right
now everything it’s all perfectly clear good okay okay so procedurally do you
want to just go through each one of these under 600 point nine and and
discuss them is that what we can do that yeah let’s let’s try and do it that way
let’s talk through 600 point nine first and then once we’re done with that I’d
like to go to 600 point to where we talked about the definition of a
reciprocity agreement and then I think we can go to six six 8.50 and to talk
about that and like I said before what I’d like to do is to figure out what you
guys think are the things that are really problematic in this regulation
what you think is really important and what if anything you think we could do
to change it to to make it work better for schools of students etc
Jessica thank you I just wanted to point out that since so
this negotiated rulemaking for this I wasn’t there but I understand summer
many of you in the room where was in early 2014 and from the lens of fraud
and harm to students we live in a totally different world as I know you
all know there are many large institutional chains that will not be
names but no longer exist and I would say hundreds of thousands of students
who’ve been left stranded I you know many of you know there was I think last
week or the week before a forty nine state attorney general settlement with
the 50th state having previously settled so I think I think the concerns of fraud
were present and a factor in the 2014 rules but I think it’s just so critical
now that we know where we are five years later that we preserve or strengthen
that all right so let’s let’s go through the language and we’ll look at each
section step by step and take comments we’re not going to go into language or
anything like that this at this point because I want you guys to think about
it and we need to think about it too but again generally what are the things that
are problematic in each section as we go so start with c1 romanette one if an
institution that meets the requirements under paragraph a1 which by the way is
the physical location requirements for state authorization offers a post deck
offers post-secondary education through distance education or correspondence
students to students residing in a state in which the student the institution is
not physically located or in which the institution is otherwise subject to that
state state’s jurisdiction as determined by that state except is provided in
paragraph C one romanette ii which we’ll get to of this section the institution
must meet any of that state’s requirements for it to be legally
offering post-secondary education or correspondence courses in that state the
institution must upon request document each state’s document the state’s
approval to the secretary or and I’ll go down to two here roaming at to if an
institution that meets the requirements under a one offers post-secondary
education through distance education or correspondence students in a state that
participates in a state authorization reciprocity agreement and that’s defined
back in six Centerpoint too if you’ll recall and the institution is covered by
such agreement the institution is considered to meet state requirements
for it to be legally offering post-secondary distance education or
correspondence courses in that state subject to any limitations in that
agreement and to any additional requirements of that state the
institution must upon request document its coverage under such agreement
through the secretary so the documentation part is just an audit
requirement we need the institution to be able to show us that it’s eligible if
we have this requirement and I’ll stop there and let you guys think through
that rustle so you admit chide brought up the location versus reside thing and
that was sent out and Allie and I and Carolyn were on the 2014 committee and
and and in that we had clarified that it was student location because that
matches better with almost all state laws and what they do and that and we
had written several letters about clarification because there seemed to be
some things if you take students residence and do that that let me use an
example that if I’m a Colorado person in the military that I am and I’m in Texas
that’s where I’m stationed and but I’m taking courses from an institution in
Maryland let’s say that Texas law is the one that that that that covers it
because that’s where I’m located even though I’m a resident of of Colorado and
people get confused about that and it seemed to imply in this that the
institutions were to tell the student to go back to Colorado because that’s where
I that was my home residence and so we thought that that was you know sort of
putting in some things so we were hoping that we could fix that location versus
residence issue okay yeah we and we we heard that from from the letters that
you guys sent more recently one thing that that leadership is
concerned about regarding the location concept is that locations change and I
think we have an interest in trying to determine at one time where the student
is located so that institutions are not required to continue monitoring where
their students live all of the time so one proposal might be that it’s that the
language changes to local where students are located but we put in some kind of
limiting language that says the institution’s check for it at the time
of the students enrollment or something like that because we just don’t think
it’s manageable to have have students have the school’s checking for students
where they live over the course of their entire education good person when you
see at the time of enrollment do you mean at the time of admission or at the
time of each course enrollment well we’re open we’re open to ideas but we
had envisioned at the time of admission I mean yeah and under the 2010 guidance
I think that sounds reasonable doing something like that in other 2010
guidance I think they did it you know at the time that you determined financial
aid eligibility that was another way that they did it back then if you go
back to the old guidance but something like that makes perfect sense because
you you need to have a census point David
so I agree point point of admission is the right thing you know the other thing
that and maybe this isn’t the right time to talk about it David but the other
thing that concerns me is just issues of access because you know I know from
institutions where I’ve worked if states charge too much money and we only have a
couple of students who want to enroll in our programs we tell those students you
can’t come that’s not doing the student service so so I am concerned about that
I don’t know how we solve it but in your experience was where those states in a
reciprocity agreement or or not when they win then you mean you saw those
fees well because the reciprocity stuff was sort of coming in initially no sorry
I just pulled up the fees just so everybody knows with respect to Sarah I
just pulled up because that I was thinking of that too so it says two
thousand dollars a year for institutions with fewer than 2500 students four
thousand dollars a year for institutions between twenty-five hundred and ten
thousand students and then six thousand dollars a year for institutions over
that threshold so I just want to make sure everybody was aware of it serve
what we were talking about sorry I’m losing my voice I guess after this week
and do we remember if for instance Massachusetts in particular is
University all states are sub California okay yep soon yes and just to build on
what David said we had the same situation with some of our programs we
did have to stop sending medical students to certain states because they
were not part a Lyon of the reciprocity agreement I just point out that that amount of
money is often less than one semesters worth of tuition any other thoughts
about the wording or the concepts in in that part of the definition and part of
the state authorization requirements regarding what’s required for a school
to be authorized if not we can move on to the next section I just wanted to
point out that obviously this reference to the state reciprocity agreements
which are defined in a different section which perhaps when you talk about at a
different time but my my concern about the definition of the state reciprocity
agreement I just wanted to note which is that it is the way it is worded now I
should say the way it was worded and then was I really discuss it at a
different time I should is it like would you prefer that I hold my comment so
it’s about the definition of the reciprocity agreement itself then yeah
we’re good we’re gonna get to it in just a second then I will hold my comment
other than to say that that decencies are obviously connected that my concern
would hinges on the how the how it is defined so let me go on to two two here
and that this is so this is six hundred point nine c2 if an institution that
meets the requirements again offers post-secondary education to students
residing in a state they must document I think we went through that so it’s in
each state in which the institution’s enrolled students reside and we can we
can make changes to to say located with the kind of provisions that we just
talked about or through that reciprocity agreement so if if everyone’s okay with
with that language then let’s go back we can go back to 600 point 2 and take a
look at the definition because all of it hinges a lot of those hinges on the
reciprocity agreements themselves all right so then I’ll go ahead and read
the the definition here a state reauthorization reciprocity
agreement is an agreement between two or more states that authorizes an
institution located and legally authorized in the state covered by the
agreement to provide post-secondary education through distance education or
correspondence courses to students residing in other states covered by the
agreement and does not prohibit any state in the agreement from enforcing
its own statutes and regulations whether general or specifically directed at all
or a subgroup of educational institutions and now I’ll pause Marty this is probably a question for
Carolyn I’m interested in the in the latter part of that comment that says it
does not prove it any state and the agreement from enforcing its own
statutes and regulations I’m trying to figure out what that might mean once
you’re in a reciprocity agreement how that might happen and how well that the
way it is structured right now the language of the reciprocity agreement
permits or says that knowledge is I don’t know what the right word is that
states can apply laws of general application to Sara state members that
are located outside their state but operating in their state so let’s say a
school is operating in my state New York and they’re defrauding students under
New York law they’re violating New York law so I personally know my my office my
state can bring an enforcement action against that school to enforce our law
and get whatever relief is is available under that law so we can get an
injunction preventing them from committing more fraud we can get
restitution may be for consumers that kind of thing and the way it’s written
I’m sorry this does not mean that if we were in a rest agreement with New York
that New York sir could we accepted that but now we’ve decided to set this other
standard outside of that on all Institute um well that’s sort of the
that is part of the issue here so like in New York State for example there are
specific New York State education laws that have existed prior to the existence
of Sara and that require let’s say certain things to appear in an
enrollment agreement or certain disclosures to be made or in certain
states or restitution funds in other states our bond requirements so that
when things go terribly wrong because there’s a bad actor or there’s a closure
there can be ensured that there’s going to be adequate relief for the
consumer for the student so those things apply to all schools who operate in New
York and if there if there isn’t language that permits New York to
enforce those laws against everyone operating New York it creates a weird
two-tiered system where I can protect our office can protect using our laws
students who are enrolled in some programs in New York but not other
programs that are in New York and that raises serious concerns only because
there are bad actors that we’re quite aware of that operate in the space this
piece coming out of and a year ago as part of the Sara discussions in New York
but trying to get figure out how New York would protect itself entering in
with an institution in a Sara agreement at the front end to say okay this you
know we’re and then you have New Jersey you have everybody in that same
agreement that the institutions don’t get surprised then that we think we’re
in a reciprocity agreement and you know 6,000 does seem like a pretty good deal
to get this done but now suddenly we have all these states still coming out
with their own requirements on top of that which pretty much undermine the
Sara agreement so at this point it might be helpful to to go back to a letter
that the department sent to Rus and others on this topic in which we tried
to explain the applicability of this of these regulations in cases where there
were conflicts and yeah and and Scott I sent you this link to this letter
earlier if we might want to just print it out and have folks yeah okay great
but yet so so but so we we sent a letter that essentially said that the states
need to work out any kind of disagreement between the state laws and
the reciprocity agreements and to the extent that there’s not they haven’t
worked that out the state then the department doesn’t necessarily recognize
the rest of prosody in that state so the we we don’t
have any ability to supersede state law in the department so that was the
position that was taken regarding this requirement we can say that state when
state law applies we can connect our requirements to that and in fact we do
in this regulation but if the states say we don’t recognize you reciprocity or
our laws supersede the reciprocity or something else we we will defer to the
state’s on on those types of decisions so that’s the policy that’s been
established that’s not to say that we can’t adjust that policy but that letter
kind of establishes how this would work or would have worked if the 2016
regulations had been implemented what I think that the only point I want to put
out because I do think sometimes we look at Sarah and say oh we have it all
covered because we now have Sarah and I don’t think we have 50 states and the
territories that can’t come to an agreement
trying to get however many ihes there are to come to compliance with that is
so I just wanted out that Sarah is not necessarily the answer to everything
that there’s still opportunity for the institutions to get caught up in
changing rules and non-compliance and things like that Russell did you want
you go ahead so what do you do what do you do in a situation where you do have
the different states have you gotten into disagreements have you gotten into
litigation what what have you done when you have a situation where they’re they
have a different requirement new jersey whatever state it is is a different
requirement well so far we have used our laws of general application which there
is not a controversy about there just isn’t a country like nobody has said
that we can’t apply our unfair and deceptive actress’s so it so we haven’t
we haven’t applied education law violations where we would otherwise have
so in other words we’ve we have not used our full arsenal of tools of enforcement
that we would otherwise be able to use if this if the
the school if a school operating in New York to be honest we haven’t actually
had this situation I’m sort of talking hypothetically I don’t think that we
could the schools that we have investigated and settled with or
otherwise for the most part I think have a presence in our state as opposed to
strictly Sarah school so I don’t think this is totally been tested but I think
that the approach would be that we wouldn’t be that we would take the
position that it would be but there that there’s there’s no issue with us
applying our laws about deceptive practices and fraud but that there is a
concern that we would not be able to apply other laws like education
specifically coming out of our education law that that would for example bolito
reimbursement disclosures the sort of things I know if that helps right so we
have sort of we see it in sort of two buckets there’s sort of the general
broaden and illegalities and whatever that applies to everything and then
there’s education law okay thank you that just a couple other background
things about about Sarah that it is voluntary for States to join and
voluntary for states to be to be part of that so for New York to be part of Sarah
that meant that there was legislative action that was signed by the governor
to go through that legislative action and the governor chose this two-tier
system that they chose to be part of that chose to chose to do this so this
would you know go against what’s being proposed would go against what was
legislated and agreed to by the by the state and so it’s in and if they wanted
to that there are some ways to change it you know that there’s ones that they
could go through Sarah and try to get the rules change because but that’s
something where it’s an agreement among the states and so the state would have
to get that going and I’m not aware that that has happened but maybe maybe it has
but that that is a that is an option to go through the
Sara process to get that done and then the other option is for the state to
leave and decide not to be part of Sara and so that’s another another way that
they go but but I kind of agree with or I fully agree with what marady was was
getting out that if you the idea for reciprocity was that you have all agreed
to use the same standards all agreed to use the same rules all across the
although across the Member States if you make it so that well except each state
can make different rules on top of that we’re back to where we were prior to
that and then we don’t really have reciprocity okay Jodi do you have okay
so Julian I just want to ask do any of us represent institutions that have a
large distance ed population and are not Sara members any of us if we have large
distance ed populations and we’re not Sara like from an institutional
perspective I know well non-degree non degree-granting are
not eligible for Sara so if you’re a non decree granting institution and distance
ed participating in title 4 you go to all 50 states right now yeah reciprocity
is only at degree granting levels you can be a degree granting institution
with non degree programs and be part of Sara but you know this has been brought
to me as a matter for any non degree seeking this distance ed program you
know certificates and diplomas they have to work with all states at whatever the
typically the career technical division of the state regard I just think it’s
may be an important voice sorry it’s maybe it’s an important voice that isn’t
represented around this table because I think those of us with those of us
seated here from institutions that have large online populations I think are all
Sarah members so I don’t know I know in the committee in the larger committee
protocols there’s an opportunity for the subcommittee to bring in I think it’s
called an expert to join the subcommittee and I guess I would just
propose for the next that we think about bringing in an
institutional representative on this topic who can speak from a non sera
perspective because I just feel like I’m not super equipped to be able to
represent entirely accurately that perspective since we’re sera members so
I don’t know if people have thoughts on that but we’ll take that suggestion back sure just speaking from Iowa and Denise
I think this goes to your question our state AG and the New York State AG were
very concerned about what they call dumbing down the requirements from
student consumer protection to general consumer protection and this came to
light when our state portal agency filled out the application which you can
find out in the Sarah website and you have to check off that you agree to
certain requirements so this is where it comes to light in some of the states
because you are saying that you and I’m trying to find I believe it used to be
question number seven and now they’ve redone the form but you say you are
waiving that state right and that you will go with wherever the student is so
that was a major issue and again to answer your question how are we working
around that our state AG and our governor came together and they had
tobacco settlement dollars that they set aside into a fund to protect student
consumer protection because it was the main issue took a couple of sessions to
get it through for us to be able to join Sarah
Thank You Jessica thank you just a couple quick points one
is you know from us oh I’m sorry from a student perspective I think you
know we’re worried about the balance right now between the ease that comes
with Sarah which I totally acknowledges wheel and also way outside my expertise
and the dramatic amount of things that must be waived in order to join and I
think you know that’s the balance is what we’re worried about
and just to I think one may be to bring this like a little concrete
I represent dozens of students who run into refund problems so they enrolled
their low-income students they can’t pay out of pocket they enroll in a school
solely untitled for funds it’s a predatory school they realize you
know in the second week of class that it’s not good they drop out because the
r2t for rules versus the school refund rules they now owe a tuition debt to the
institution that’s often fifty or hundred percent of the semesters tuition
they don’t have the money to pay out of pocket because they never had the money
to pay out of pocket in the first place they get sued they have a judgment there
now low-income workers whose wages are getting garnished and so if you think
about like that chain of events refund is one of the issues that Sarah requires
States to waive and I think we could all imagine that a state would have an
interest in its students having certain refund rights and so I think you know
obviously there are compliance issues but I think that’s that’s an example of
the kind of topic we’re talking about where I think we could find a balance
between the ease of compliance versus the protections for students that states
themselves and posts generally sue is a really good point to that that they’re
that there’s this issue where people can be really left without recourse when
they’re harmed in this situation and I understand what Russell was was saying
that there could be room for a change in Sarah and if and I think that if the if
the federal regulation went forward as initially as proposed originally
requiring more than just general application be preserved and Sarah then
that would cause that change to Sarah and that would be I think a positive
change for consumers to institutions that are degree granting and not in
Sarah California of course any institution offering distance ed in
California we have a number of them deac accredited they go to all 49 states and
they have 49 enrollment agreements they make sure they have explicit disclosures
by state and and they are just working this one state at a time they renew
every year as they need to and and they’ve just built that into their
apparatus many of them tell me they’d like to devote those resources to other
things rather than constantly renewing and cycling through 49 state
authorization processes if they’re a distance ed institution we don’t know
that we don’t think California’s going to come into the Sarah fold anytime soon
but it I know is a great cause for resources being used towards this that
make be available to the institution in other ways Marty I’m a strong believer
that somehow we need to get Sarah to the point that the states are comfortable
with it and the schools know how to be a good actor that I think that’s you know
for a lot of the schools we’re just looking to make sure we have our eyes
dotted our students know what to expect they know what their responsibilities
are and we know what ours are just a little context Lea and we have had and
react in a way it’s not just the challenges on the state and this is I
think undermines why Sarah is so important even to Arden non-degree
offering you can wait years to hear back from a state so I think that’s the other
piece if we want to stifle innovation and I’m not exaggerating that it can
take years to hear back from these states for an institution trying to do
the right thing so I think we need to keep that and you may have examples of
that with your schools Amanda I think the copies broke given to you to pass no Hardy go ahead Jordy
go ahead I just wanted to respond to Gillian I think Leah brought up
California institutions but we also have had issues and this gets into a really
arcane technical area that involve the financial responsibility standards which
we have a whole fun report on this that goes into depth I can circulate if you
were interested but the financial responsibility standards that are how
calculating whether a school is at risk of precipitous closure sarah has adopted
those standards and the problem is that we’ve been asking the department to make
a fix these financial responsibility standards for years currently they are
not compliant with they are calculated based their misclassifying assets number
one so for example if a school’s endowment declines
that’s counted as a loss against the institution so we had a situation where
one of our Ivy League schools was at risk of failing financial responsibility
even though they were not ever at risk of actually closing precipitously we
also they also are not the financial responsibility standards that the
department is currently applying are consistent with federal Accounting
Standards that nonprofits use to keep their books
so what’s ended up and the department at the ansara is using a financial
responsibility calculation with a lower threshold so we have schools that have
been kicked out of Sarah because even though they’re not anywhere near at risk
of closure they’re failing these financial responsibility standards that
aren’t properly calculated so this is something that’s been a really big issue
for us Denise sorry for all the facts why are the
non-degree programs exam do you know I didn’t say they were you mean exempt
from Sarah I mean because Sarah is an agreement of among the degree granting
authorities for the states they just know because most states typically have
a degree granting authority review and then a non degree or career and
technical reviews of the two levels so the reciprocity is among the degree
granting levels of the states and not the non degree good Julian so I have
this concerns actually the Jodi expressed with respect to some of the
financial responsibilities I’m composite score calculations and how
that’s affected some institutions and not others I think it brings to light
this question of how and I don’t know the answer to this I’m just running out
there how much oversight the department should have on a non regulating body
which is what Sarah is now I don’t I don’t know right so I think there would
be benefit from some additional definition but I don’t know to the
extent the department feels comfortable with that or even can do that given that
it’s a sort of membership organization it’s voluntary and sort of operates in
its own atmosphere I don’t know the answer but I think it’s something worth
considering as we sort of move forward with trying to figure out how to better
um write some of these definitions yeah I just wanted to respond to that I think
that that’s also been one of our concerns is just there’s not because it
is operating outside of the regulatory sphere and I don’t know what the answer
is either but it it’s not part of the structure of the Higher Education Act
and therefore it makes it very difficult to flush out the relationship and it’s
just it’s it’s something that’s totally outside of the norm and we kind of
question whether Sarah should have such a pond mean we want that reciprocity
because it’s so critical for institutions but at the same time it
it’s sort of weird to deal with this go ahead yeah go ahead
I know the financial responsibility of 1.5 is fixed and Sarah set that because
they wanted to have a certain bar if you go below 1.5 you’re out in financial aid
eligibility you can post a letter of credit and you’re not in and out of
financial aid the way you can be in and out of Sarah and I get that there there
have been concerns brought to Sarah about this and I know that it’s
something that is being considered and I realized that this process is not going
to affect at all how Sarah sets that standard what I think would be helpful
is if we had some suggestions of other ways to demonstrate financial
responsibility that could be an acceptable alternative to that 1.5 but I
just want to say that that has been set because we want to treat the reciprocity
with the highest level of assurance of financial responsibility across the
spectrum of these distance schools respond yeah I think we would have a lot
less problem with that if if the financial responsibility standards were
actually being calculated on rational metric right I mean if it’s not
consistent with current accounting standards and the department hasn’t
fixed that I mean I’m sorry I don’t want to this is something that has been such
a huge source of frustration for our institutions that we’ve been asking for
years and years to get a fix from so you’re talking about something where
you’re asking the institutions to keep a completely inconsistent set of books and
your and and it’s just nonsensical what would so that’s our issue yeah we
brought John coladas up and he’s our financial responsibility person so he’s
going to address that matter thank you John okay first off some of
the issues that you raised with the financial responsibility
calculation those issues were discussed in the financial responsibility
subcommittee for borrower defense so if you read the
preamble to the bar defense rules you would see that discussion and some of
the changes that we proposed including the endowments so I think we recognize
some of those concerns and and and we had proposed at that point some
Corrections we disagree with some of the arguments and presumptions about that
were otherwise not calculating the score in accordance with accounting standards
that’s a matter of disagreement and but that’s another discussion but in any
event we made a lot of corrections and assuming that we publish or republish
another NPRM for for borrower defense you’ll see those changes so I mean these
haven’t been actually been implemented though despite these recommendations
correct we’re in the process now of redoing the BART defense NPRM but if you
read the NPRM that we have published previously for borrower defense there
was a financial responsibility component and you could see the changes that we
had proposed in that NPRM all right our concern is that those haven’t actually yeah I was just addressing the fact that
we did take steps to correct that yeah go ahead with a couple more comments and
I think we want to maybe summarize for where we’re at at this point so that we
can come back to it okay thanks John sure just to someone over here asked a
sort of broader question about like what is the relationship between ad and the
states here and I think from our perspective that you know as this data
is an important part of the triad it’s always been consumer protection and you
know I think the reasoning that went into the 2016 rule is that you know
states edie needs to make sure states are doing
a minimum amount of work there to like have it be real meaningful state
authorization and to try and name things that are requirements that edy requires
the states to do if they’re going to authorize states and I think sort of
that’s the conversation we’re we’re having is like what is like real
meaningful state authorization and how does that impact sooo do you have your microphone on my
again because what you said was not picked up okay um just the background
answer I want to make sure we know 49 of the 50 states are now members and we
certainly wish California would be but I want to give a pre and post in the state
of Iowa we went to a lot of work with the gentleman who covers Iowa from shio
and we gathered what it was costing for each of the individual universities our
three Regents are independent nonprofits some of our other nonprofits that were
having to go across state lines so they saw great value in this it was close to
1 million dollars in the state of Iowa that we were adding onto the cost of
education so you know the point that Jessica made and it it’s a good one in
some situations that may be only equal to the cost of tuition but when you’re
trying to send three students to a state and it’s costing sixteen thousand
dollars in order to have that is that fair to all of the students so I think
we’ve got a good model which we can ask for tweaks on but let’s not go back to
the way it was where we had you know we’re a small university some of our
other independence you know they’re small universities are community
colleges that sit right on a state border that are drawing students from
across the state line these are cost to education that then our students are
having to pay through tuition Jessica Robert I’m sorry I can’t see your name
can’t call it first I want a second what what sue said I really think that we’ve
we’ve gained a lot through and see Sarah our relationship there and what’s going
on my Chancellor’s have worked very hard to help hammer out these agreements with
their states and and I think we should build on that that doesn’t mean that
there can’t be tweaks and and we need to make sure that students are protected
with some recourse when when there have been violations here but we can we can
figure out some of this specific but also what Jessica hit on earlier and
I mentioned yesterday I think we need to fundamentally rethink the Triad and give
it some some true teeth and some avenues of partnership of what’s expected by
each entity of the Triad whether it be feds state or creditors I think it’s
it’s a nice philosophical conversation on occasion we we talk about higher ed
reauthorization and how this was fundamentally set up but I think a lot
of the paths that could be utilized have been broken or with the development of
of the way things operate now they just aren’t as efficient and effective as
they as they once were and we do need if a state is going to authorize there
doesn’t need to be some teeth there we need to figure out what is going to go
into that process and what is you know what you the feds are going to expect
there and we often talk in terms of a floor and if we’re going to do that
there let’s let’s have the floor start on the tenth floor let’s have it have it
be something that there really means something that really helps set a course
here for us so uh us as the states and she owes we’re very open to this
conversation I run into a lot of frustrated she owes what we’re dealing
with institutions that that there are that where there is going to be a
precipitous closure where they had no idea about this and now they have to
help with the teach out in some way because it’s in code that they do that
but they’ve had no responsibility for that institution that’s not within their
public purview up until that point and so we just have to figure out a way to
get a lot of that in the same same page and I think this is a part of that
conversation but I just want to observe that it’s fundamentally a much larger
conversation to that this needs to be incorporated into and and to that point
right now we’re really we’re keeping the discussion a little bit narrower while I
definitely acknowledged the the broader conversation is happening and it’s a
good conversation to have we would be interested if you think there are
certain things that need to be set in order for 30th floor requirements let us
know we’ll take a look at it and maybe we’ll take a look at the next
subcommittee session all right Jessica just real quick I just want to
be clear that I don’t think anyone is well served by having huge time and
expense in terms of startup cost so when we’re talking about shopping around the
50 states and all of these different expenses and it taking years I think you
know and so in terms of the expense I understand that that’s one piece and
then I think the piece that we might have different views on is sort of the
ongoing compliance I monitoring but I just want to be clear so I want to
summarize a little bit of what I’ve heard and make
sure that I’ve captured at least some of the conversation and like make sure that
I catch everything so I heard general support for the concept of reciprocity
there may be some differences on regarding what’s necessary and and what
kinds of rules need to be enforced but the fact that it reduces cut that seems
to reduce cost and reduce burdens for for institutions who have distance
education I think there’s general support for there I heard from Carolyn
and Jessica that they support the part of the reciprocity definition that says
that state laws whether general or specifically directed at educational
institutions that’s an important part of the definition because it allows States
to have those requirements but there are still concerns from other folks about
states having laws that are that are burdensome that cause institutions to
have to have a you know again a you know 50 state database of information about
the different things they have to comply with so we’ll think about how to how to
square that as we come back next time we also heard from Russ that it’s important
to change the concept of residence to location and I think we heard at least
most folks if people have concerns about this let us know but we heard most folks
think it was a good idea to ensure that it’s a bets address at the time of
admission and we heard concerns about lack of oversight Department oversight
over Sarah and some of the rules that they’ve set that may that may have
caused problems for institutions or that as others others said that that may not
set an adequate or for oversight not clear right now if
the department is gonna is able to to do anything with Sarah wilt it will take it
back we’ll think about it and we’ll come back maybe with some
suggestions about what we can do or we’ll let you know that we we don’t you
know we’re not sure what we can do in this space but we’ll think about it as
anything else that I haven’t captured here okay
yeah so we we we heard you there I know that Jody does have some schools in her
constituency and maybe that you could help with that
yeah we can look into that Thanks Thanks so with that I’d like to go to different
section disclosures it’s 34 CFR 668 points 50 and I’m gonna
have to dig it dig that up as well that’s the that’s the disc other part of
the regulation from 2016 that relates to disclosures for schools that are
offering distance that are correspondence courses in which students
are a hundred percent distance that our correspondence it’s page 41 yep yep and as as people are getting to it I’ll
give a brief summary of what is is in this part of the regulations these
regulations were created again in 2016 they are directed at institutions
offering programs in which students are a hundred percent enrolled in distance
education or correspondence courses it creates and at this time I’m not going
to go through every single one of the regulations but we can talk about them
as we as we go through it creates two different sets of disclosures that
institutions are required to make to students one of them one of the two
types is public disclosures schools must make a number of public disclosures on
its website including that this day whether the institution is authorized in
by each state in which the students are in residing a lot of information about
the consequences if students move between places description of consumer
of complaint requirements adverse actions that against States or creditors
have have initiated against the institution the sorts of things that you
would that the school would have to disclose to anyone who was looking at
their website then there was a second category of disclosures that were
individualized that needed to go to students who were first we needed to go
to perspective students and in some cases to enrolled students to
prospective students it would have required that that any time the
institution determined that it did not meet licensure or certification
prerequisites in a state in which one of those students lived
they’d have to tell the students specifically and then to each enrolled
in prospective student they would have to disclose adverse actions that the
state had an issue at state had initiated or an accrediting agency had
initiated and also had to tell schools that any time that they cease to me
licensure or certification prerequisites so there’s a lot there but I wanted to
start out by saying that our the department’s initial position
is that all of these disclosures would be removed and that’s that we wouldn’t
have this this section would essentially be eliminated like I said before we’re
interested in the things that folks around the table think are the most
important about these and we’re especially interested in conversation
about the topic of licensure and especially in cases where the
institution is aware that it its program doesn’t meet licensure requirements in
the States we think that’s a particularly problematic issue and we
want to think about how to address it so I’ll stop there
I think before we go into discussion we’ll take a break now is that a right
Greg or do you want to go into discussion just want to just take a
break and think about this and we’ll come back okay let’s just say 17 after I want that to be 18 after Tony I’m sorry
I’m sorry I’m gonna Grinch time you you you you you you you we you you you you you you you to point out the correct marks the only
person that could stop the clocks here he’s like the Queen I just want to make
a grand entrance for the camera let’s pick up our discussion on the
disclosures so I went through a brief very brief overview of what our
disclosures are required related to distance education and correspondence
courses so I’d like to open it up to the group to discuss again things that that
you think are important in those things and those regulations things that you
think need to be changed or things that you think should be removed okay so I
have a forest here and I think okay so we’ll start with
Caroline protecting consumers understand that there are issues that may not even
be aware of related specifically to licensure in different states some of
the students that we see it would not even necessarily occur to them that
there could be an issue because they just assume that if they’re taking a
course in their state then that course would lead to licensure in their state
so I think that especially the disclosures related to licensure are
particularly important but I think that all of the ones here have have been sort
of well crafted to address specific issues that face consumers in this space Julian thanks to have a few comments so
in general I would say and I’m sure the Department doesn’t disagree with us it’d
be great in general if we could have sort of a coordinated effort with
respect to disclosures to students and I’m talking about broader than just this
rulemaking right so we know that there are disclosure
since several that sort of touched on several things keep employment other
things in general it would be great if we have sort of a consolidated approach
towards disclosure so I think we all philosophically probably agree with that
and related to that you know would really encourage the department to
consumer test disclosures before I’m sort of my landing finally and what they
believe is most important because I think consumers can best tell us the
students can best tell us what is important to them and what is an
important and in an effort to make sure we’re getting the most important
information in front of students I think it’s really important that we don’t I’m
sort of overwhelm them with information that is not as pertinent to their
decision-making process with respect to the language as it’s written here so you
know a couple of Nitty things there’s reside is it still in here so to the
extent that we’re cleaning up sort of reside in other places it would
encourage the same perspective and this work that it’s prior to enrollment and
then the term adverse action is also in here without to my understanding a
definition I think there’s one with respect to accreditation perhaps but
talks about adverse action a state has initiated I don’t exactly know what that
means and I think there’s a risk that every institution will choose to
interpret that differently right so again to the extent that were interested
in seeing if these are the things that resonate with students let’s just make
sure that we’re taking a consistent approach towards how we’re talking about
them in defining these terms so that institutions can become so that students
can see sort of apples to apples information and then with respect to
licensure so I think I mentioned this yesterday
Capel University has many programs that lead to licensure and were strongly in
favor of leaving in a disclosure requirement with respect to these
programs do you think it’s crazy that a student would be able to be enrolled in
one of these programs in a state and not even know if they’re gonna be able to
for a licensing test to get a job the one thing I would say is we would just
recommend some a little bit of clarity around the term licensure program which
I don’t want to complicate things but I think some institutions are confused
about if you can be a real estate agent for example in a state by having a
bachelor’s degree does that make every bachelor’s degree program at your
institution a license program I think we know that’s not the
intention but I think and there are some institutions that are confused about the
definition of that so my proposal would be something like programs advertised as
meeting educational requirements for a specific professional license or
certification that is required for employment in that field and I can send
that to you but just to be super clear about what sorts of programs that we’re
talking about so that schools don’t feel like they either can get out of the
requirement if they’re legitimately offering licensure track programs or
schools that aren’t actually offering licensure track programs aren’t sort of
conflating the issue I think those are all my comments for now okay yeah so I
kind of like to address the same three topics Gillian did just with my
perspective on disclosures in the area of complaints adverse action and
licensure I think we should have one kind of consolidated idea about the
complaint disclosure process is can we make this a little bit more streamlined
but that it’s clear to students and 100 percent distance ed programs what their
avenues are in terms of filing a complaint with respect to disclosure of
adverse actions going back five years I I’m just not sure what that does to move
the needle for students existing adverse actions like subject 2 right now I think
are important to be made clear to students and I think that perhaps there
is for distance ed students and distance ed participating institutions making
that clear could be of benefit and then lastly with regard to licensure and
occupations that lead to an examination you know again if we are enrolling
students in program you know for a profession of a lifetime I mean the time
is now at the time of enrollment and going through the course of study to
understand how you’re going to navigate that licensure process and I think the
institution should by all means be sharing with students by state what that
process is and maybe not just distance ed I mean maybe for any type of
licensing situation whether you’re it’s based campus enrolling students
from all over the US that are gonna go back to their home state and take an
exam and practice in their field I mean maybe this is something that we should
look at as a disclosure across the spectrum of higher ed and not just
focused on 100 percent online institutions thank you
Russell thank you I’m gonna repeat letters that I write to David and your
friends about falling in line with the others in terms of the really around the
complaints and the professional licensure that those are those are
issues that really have to be in here I’ve heard some just you know really bad
stories about institutions of all types it actually actually took me like three
years before I had a complaint about a for-profit institution what’s the most
of them are about nonprofits or state institutions that were not doing well on
the professional licensure and I think that’s something that we need to to step
up on for the others that I think there are several areas in terms of if you
keep them just whether it’s here or in subsequent guidance that there were
clarifications that we saw you know there’s the paragraph about consequences
I sort of get what you want to do but we were very puzzled about how what does
that look like in in practice refund policies was another one where we had
several people read different things and so the the particular was like for a
Sarah institution operating in a state under Sarah does every report the refund
policy it uses was part of Sarah or the state’s refund policy and I thought I
understood it but I had some really smart people who said you were to report
both which wouldn’t help the student if you’re giving them the wrong refund
policy right that doesn’t apply adverse actions that that’s been brought up and
we talked to some of the creditors in some states and they used different
terms for that and in different levels and so was okay how do we apply that
across so there’s all sorts there’s there’s things like that
and then the last thing that I have here is that is about the the solely through
distance education thing that that needs to be defined and where do hybrid
programs fit into that because it seems like it from a consumer protection
standpoint it could end up being a you know a real hole that you could drive a
truck through that you know be really easy for programs just to do a little
bit face-to-face in order to get get around some of these things and and what
do you do about the the programs that were mentioned yesterday where it really
is most of it is done at a distance but there is some sort of practical part of
it and in you know where is the dividing line for those and so need some more
clarification on that so this Thank You Russell David so I just want to support
especially Leah’s point that this shouldn’t be just a distance ed issue I
mean institutions I think have a responsibility to help their students
understand how licensure works in those disciplines where licenses are important
all right so that’s got to be part of the education process I do think though
that there is a point of the disclosure piece where the institution’s
responsibility needs to end and it needs to shift onto the student and that is if
the student starts to move around so just like when we were talking about the
same should hold here we’re at the point of admission the student clearly needs
to understand what the implications are for licensure but then if the student
decides to move to two other states over the course of her studies that shouldn’t
be on the institution to chase the student JD yeah I just wanted to sort of I said last night which is that we’ve
generally been supportive of repealing these disclosures and I’m coming from
private nonprofit perspective which is that these have been an extremely
burdensome you know again a lot of this has I heard tiny institutions to hire
multiple staff to try I mean it’s these these things are incredibly difficult to
track constantly changing state licensure requirements to constantly
monitor you know adversity just it’s it’s too much and so I’ll leave it at
that but I mean we’re definitely open to hearing arguments about why certain
pieces of this should be retained Jessica thank you again just to go back
to what this might look like on the ground um one of the huge problems in
fradulent schools obviously is aural misrepresentations and I think some of
the written disclosure requirements are directed at trying to contradict the
aural misrepresentation so we have a student who went into an office and like
a school to enroll in like a technical medical field that requires
licensure she said is the program accredited they pointed at the wall with
a certificate and said yeah it’s accredited without obviously going into
what that accreditation was and whether that accreditation was sufficient for
licensure it wasn’t um she has you know something like forty five thousand
dollars in student loan debt and has had her borrower defense application sitting
with the Department for three years and ten months I believe so you know I think
we like this only works if students actually can understand what it is so I
think from like a legal aid perspective like we want simplified disclosures we
want disclosures that are relevant to students we don’t want you know the
kitchen sink of a hundred and fifty things that no one’s gonna read and it’s
not real like the you know fewer clearer like at a reading level students
understand the gist says you know something like uh you know this program
can lead to licensure in this state and not other states or something you know I
don’t want to put words in your mouth but something like that like I think we
just want a way to be very clear to students before they get into the
process about what they can get out of it
Denise sure absolutely the licensure issue when I hear you that it’s a bigger
than distance ed but I think it is disproportionately an issue in distance
ed because of just people cross state lines way more um we would put a
complaint like a clear complaint process of who you can go to for help and I
think the adverse action thing is hard and I hear the definition but I think
students we hear over and over which is if everyone knew the school was bad why
did it anybody tell me and I think that we need to you know when it shuts down
or whatever they lose their ability for title for so think about a way to
communicate what knowledge is in your head and in my head to students who are
making it to make an informed choice Julian so a couple thoughts one and I’m
just sort of brainstorming a little bit here but I think David to your comment
you know perhaps there’s language that’s added in that initial disclosure that
those two students that says this represents where you live today it’s
sort of on you to reach out to us and please do that if you move and we’ll be
happy to tell you what your state specific licensure status looks like I
think you know the licensure disclosure can’t turn into like a game of gotcha at
institutions which I think it runs that risk if we say you should be able to
track students and figure out where they’re living and and notify them
within 14 days is a little bit unreasonable and it really sets schools
up for probably unnecessary litigation that even if the school’s trying to do
the best it ends up being sort of a terrible
thing Jody to your comment again just sort of brainstorming I don’t know if it
makes sense to think about like if there’s a number threshold in terms of
like if you enroll X number of over X number of students from particular state
in this licensure program then you have an obligation I don’t know I’m just
trying to think creatively about sort of how we balance sort of the cost of doing
all of this that I’m sure would end up getting passed along to students anyway
which none of us want with sort of this need to really be transparent or I don’t
know so open to other creative solutions there Judy go ahead no I was Amanda I’m
sorry so I really appreciate that this is a requirement
I’m just disclosure agreements in general as a concept I think that
students in the higher ed world before even enrolling while you’re enrolled and
then after you’re enrolled there’s all these ace and information asymmetry
problems so I think this is a way to solve that policy problem just in the
higher ed sector across the board but specifically when we narrow down back to
online programs knowing the students who are in these programs are low-income I’m
a first-generation college student just I mean I did a traditional four-year
college but just even before there’s a ton of information that was not
presented to me I had to look for it couldn’t find it didn’t know where to go
I think if the institution or just we had a world where information was more
available to students in a way that Jessica described so just knowing that
from my personal experience and others as well even then going back again to
online programs where it is more accessible I think that’s great
and I think the probably the most winnable piece or the piece that I think
is really important because it’s tied to we go to these programs to be employed
to have financial stability for the rest of our lives
and so I think that anything anything that touches labor employment
or the security of that should be informed to student so I know that’s
kind of broad but if you just kind of think about that in the back of your
head like this is really important this is the point so I think licensure
information or things that are not coherent or if the program is not doing
it before five years before it gives a student an understanding of like the
probability that they will or will not come out with of employment so I would
say that’s probably a very important part if that’s the majority of what
these programs are providing to students but anything that’s really heated to
hindering their employment I think is still relevant and important and I
understand that it could be a lot of work on institutions but I think that’s
something the institutions should do as a requirement as a minimum I just
briefly in response to Jody um at some point I think you know to students the
thing that’s most important is to say but they they know that they’re going in
that it might not get what they want and so I think it’s from the legal aid
perspective at some point in the prayer rulemaking there was some proposal like
I mean no one likes hand writing and distance ed but a proposal that
basically and the student’s own handwriting says I live in California I
understand and the school has told me that even if I take this program I might
not be able to become whatever you know cosmetologist or whatever in California
um which you know I think it gets a little bit of weight you return you yeah
I just wanted to uh also say that to echo people’s comments about sort of the
overwhelming nature of disclosures in some cases this is something that we’ve
actually it’s a longer story but we at one point convened a focus group for
example to ask students what were the most important disclosure requirements
and created a system except that sort of is like scorecard
but with lots more points on it that the students can look and and so we’re
interested in knowing what exactly students would find the most helpful
without overwhelming them with in for me so much information that it all just
goes in one ear David go ahead I’d like to thank everybody for their comments
about this you’ve given us plenty to think about so I think what we’re gonna
do on this topic is take it back we’re gonna need to have some conversations
among all of our of our leadership and all of our policy folks we’re going to
come back next session with some proposals and then maybe we can work
with you guys to narrow them change them get them as close to to what you guys
think is the right path as we can with that I think I’d like to turn it over to
Greg so that we can move on to other issues and sit in part 600 thanks David
and I thank all of you for that that discussion was very useful what I would
like to do now is just use them clean up some some things I think a little more
minor finish out definitions we’re trying to get to the discussion of
written agreements later this afternoon which I think will be something that
will probably prompt a great deal of discussion so trying to get through
these as quickly as possible so the first one I want to look at is in cars
the definition of an incarcerated students and you’ll find that in six
hundred point two there’s a pretty minor change here you’ll see that all we did
was an adding in looking at who was considered to be an incarcerated student
we have added youth Correctional Facility after president GL reformatory
work for him youth Correctional Facility or other
similar correctional institution that’s just a clarification that a youth
Correctional Facility is in fact a prison so I’m sorry for page four so
just give you a chance to read over that I don’t have anything else to say about
it other than it is a clarification if anybody has any comments I’d be willing
to entertain is this gonna newly exclude a whole
class of people from title 4 pardon I’m sorry sure is the import of this change
to a newly exclude a whole group of people from know the important changes
not to exclude people it’s the law is really clear on what types of facilities
you have to be incarcerated in to not be eligible for a Pell Grant this would not
change that definition so it’s just like a codification of what you’re already
doing it has to do with the percentage at the percentage of incarcerated
students a school could have right there’s no absolutely no change in
there’s no change in our policy the important point is the students who are
prohibited from receiving Pell Grant funds are those who are incarcerated in
federal and state penal institutions this would never qualify that this
change has no effect on that part of the provision this is again as dreg said
just about the percentage of students who are incarcerated which is a
different requirement do we have any comments on that any more comments on
that okay okay the next the next we’re taking that
bottle away from Denis permanently yeah something to be desired okay so the next one is a non profit of
a nonprofit institution so you’ll find that on page five it’s also under six
hundred point two and looking at the change there you’ll see that we have
stricken is determined by the US Internal Revenue Service to be an
organization which contributes oh and by the way I should that yes is the term by
the US Internal Revenue Service mineralisation which contributes a tax
deduction which to which contributions are tax deductible in accordance with
501 C 3 Caroline it’s simply that we’re not where for the definition of what we
consider to be a nonprofit organization on profit entity we’re not going to look
we’re not going to look at the that the tax code definition of that as being for
charitable contributions departments making its own in making a determination
based on a number of factors that’s because before I think a lot of the
understanding was that was the only thing that we looked at so there we have
actually a group that looks at the the conversions from profits and non profit
and they just want to make clear that we’re making a call it’s not just if
you’re not considered nonprofit for our purposes just because the IRS considers
your nonprofit I think that’s a positive change because we certainly are aware of
an issue where some for-profit colleges who are not necessarily the good actors
have tried to sort of shield themselves from scrutiny and from regulation by
converting to nonprofit in some ways but not always and so I think that is that
that would be a helpful change yeah I just so I people who may be confused I
don’t wanted to confirm this but it looks like in the in definition in one
romanette three you have three factors one of which includes the charitable
same exact charitable language that is in paragraph three so yes okay when it
was listed as a three I think there was the look like it was the sole factor if
you were that then you automatically are going to be from that first is it being
one of the factors that the department comprised okay yeah we support that as
well so we’re gonna look at it as I’m sorry to be out of the comment Julian so
back to your comment about I’m sort of striking this in order to show that the
department will be doing its own analysis I think that’s what I
understood you saying in terms of it’s listed as one of the factors that would
consider but I think there was a confusion that that was
so yeah I guess I just wanna which I don’t think it’s what you’re saying I
just wanna confirm that it will be clear to institutions that are interested in
converting to nonprofit status exactly what that means and what what criterion
you the Department is using so I just I think maybe I heard right and I wait to
me there is a a group working on that area it’s not my area of expertise but I
do believe there they may be getting things out but they’re working through
that process right now in terms of what factors are considering so I will take
that back yeah I would just say for everybody’s best interests and it’s
clear institutions and we have students everybody so that right I’ll take that
back and make sure they Jordi did you ever come ok the next definition we’re
going to move on to is Teachout it’s on page 7 give you a moment to get there just real quick in case you guys are
wondering there is a definition of religious mission that is in that is
here and we’re not going to address that that’s gonna be addressed by the
faith-based subcommittee so you’ll see first off the the addition
of a definition of Teachout and you know we’ve always had the concept of Teachout
and we had a definition of a teach out plan but I think what we have here is
expanding on that and clarifying what’s what’s occurring in a teach out
situation the first thing being the the definition of a teach out what you can
see there which is new and a period of time during which the program
institution or institutional location that provides 100% of at least one
program offered engages in an orderly closure or when following a closure of
an institution or campus another institution provides an opportunity for
the students of the close school to complete their programs just describing
what what a teach out is we then break out as well as you see there we
previously had or have it we now have the definition of a teach out plan we
are adding a teach out agreement as to differentiate between the plan and the
agreements so you as you can see there in a definition of an agreement the
agreement is between institutions that provide for the equitable treatment of
students and a reasonable opportunity for students to complete their program
of study if an institution or institutional location that provides 100
percent of at least one program ceases the operator plans to cease operations
before all enrolled students have completed their program of study and the
creditor is permitted to waive requirements regarding the percentage of
credits which must be earned by a student at the institution awarding a
degree or a certification when a student is completing his or her program through
a tee or written Teachout agreement so the agreement is something that would be
in place already between entities and so we’re making a distinction there between
that and what you see below the current definition of a seat of a teach out plan
the plan is a is so there’s the agreement between two two institutions
and then there’s the plan which is the plan that the institution that an
institution has in place as to what will happen in the event of of a closure so
the plan is developed by an institution that provides for the equitable
treatment of students if an institution or institutional location that provides
100 percent of at least one program ceases to operate and we’ve added here
or plans to cease operation before all enrolled students have completed their
program so they that that the two really are different the school has a plan in
place for a teach out and then has the could have an agreement between itself
and another entity any comments questions we still with Jessica do we
want to go in I mean this is a huge deal to the extent that it impacts title 4
availability for a for the during the Teachout closure process I do you want
to hold off on those comments I mean obviously that the definition and then
the later actual rec are related here oh yeah we’ll talk through it if you want
to go if you want to refer the other section we can do that as well sure
could you I just know the big picture in my head could you point me to the site
give us a moment right I think there are references there
are references in the program participation agreement in 668 14
there’s also in the in accreditation I would probably want to bring back bath
if we’re going to have a discussion about that as well as references the the
accreditation accreditation rules were your comments related to that
accreditation piece I could just go over them generally if you want to go and get
them on the REC thank you thank you on my understanding is this is a
significant change in that essentially it allows a closing school to operate
continuing to use title for funds and this like quasi closed role as a teacher
because it adds the school’s own instruction to the teach out and then
allows the use of title for funds for 120 days is that right I think about two minutes here yeah Jessica if you could just let us
know exactly what your chair I believe into our discussion is because in terms
of um I guess the way the department is always processed that there we have
allowed teach outs at an institution that’s closing and they can continue to
get as long as they continue to provide education they’re entitled to funds to
the end of the payment period under another regulation six sixty eight
twenty six so it if you think it’s a change in that there isn’t because
that’s occurred before so I’m just trying to figure out what you sure I’m
sorry it took me a while I’m fine it’s 641 termination and emergency
action proceedings adds a new subsection D to four bit after termination of the
elegy I’m summarizing sure so after termination of the eligibility
of an institution essentially the NCA I read this to say that the institution
can still receive title for funds for up to 120 days of their own teach out plan
as approved by the accreditor and I guess my just by big picture concerns
and maybe I’m miss reading these terms is that um how this interaction with
close school discharge so you know like I said yesterday I think close school
discharges incredibly important for people whose schools closed and often
staying in the schools doesn’t serve them well in a hundred and twenty extra
days at the same school isn’t really getting them anywhere and so I just my
concerns are in this language if I’m understanding a right which is totally
possible I’m not that we would um that students would lose the right to
classical discharge because closed school discharge also has 120 day period
as it currently stands okay I’m gonna have to be honest with you I’m gonna
have to look at this provision because I don’t recall looking at it before didn’t
not gonna say I didn’t but there’s you know there’s a stack of things we’re
looking at but the discharge provisions apply when a student can’t complete
their program even if they finish that payment period
that doesn’t necessarily mean they’re gonna complete their program great so
you’re concerned here then I want to make sure we’re looking at it correctly
as you want to make sure that that provision does not prohibit students
from getting a closable discharge got your concern
exactly I know that there was in the proposed borrowed offense rule there’s a
proposal that if a teach out is even offered close school discharge would
come off the table which is like a separate thing but I’m imagining in the
world in which the student has the option to take a teach out or take the
close will discharge that this because of the hundred and twenty day period
students would stay automatically enrolled for the same hundred and twenty
days as in closed school discharge and will essentially lose their close quote
discharge rights without having any idea that they had them in the first place so
this one I probably can look at with my colleagues at lunchtime and get back to
you what exactly that provision thank you I didn’t mean to derail the
conversation Thank You Leah under the Teachout agreement definition
I wanted to suggest that this include approval by the state the accreditor and
the Department of Ed in executing the teach out agreement so a teach out
agreement is effective when the accreditor has approved the arrangement
the state has approved the arrangement and the Department event has said yes
the title for access can continue in this arrangement and I think it could be
helpful if this definition includes that provision I mean you can have a teach
out agreement between two entities but if it hasn’t received formal approval I
think by the accreditor and sometimes two accreditors if it’s crossing you
know two accreditors you know one a creditor has a school that’s closing
when a creditor has a school that’ll handle the teach out of the students
getting approvals through those circles as well as with the state involved and
the Department of Ed I think makes for a more secure situation for the student
proposing that we add the department as an approving body on teacher agreements
which we’ve always said that we um in past experience working with
closing schools I have had interactions with the financial aid case team you
know that has engaged them on hey you know we have a group of students a
couple hundred the school is closing this school is coming in to do the teach
out or they’re gonna move over you know do we have assurances that the financial
aid is going to keep going under this arrangement and so I don’t want to step
outside the boundaries I’m just thinking about something that’s more secure for
the student okay it’s good because we do typically the department does that and
over the last number of years where we’ve had so many more precipitous
closures case teams in the region get actively involved in trying to assist
I think the department’s position always has been the we the agreements between
the entities and we don’t approve so they just okay want to know it I mean
I’m not saying we can’t take it back to see but if you think it would be
something that we would like to see in here I can see if that I don’t know that
negotiating Teachout agreements is widely understood how to get that done
by a creditors maybe even by the states I don’t want to speak for states but
maybe Robert you can weigh in I just think that this has been a matter that
we’ve seen so many suit students affected by precipitous closure can we
find a way to formalize that these parties get together in some form when
we see something happening under potential closure that we can work this
out that that’s all David I’m sorry thanks I was just actually looking for
clarification on what the second sentence in the teach out agreement
means I’m not sure how do I read that so sometimes students have less than 25%
left like they may have one course or two courses left typically accreditors
don’t allow more than 75% transfer of credit and so what I’ve seen happen is
the accreditors say okay you can go ahead and I know two courses unawarded
agree for the closing school or for your institution so it’s a transfer thing
that a waving of requirement it’s transfer of the credit so you’re
allowing students to bring all but their three courses to the school offering the
teach out and you’re allowing that degree to be conferred and again helpful
to have the state involved with that as well thank you just like a couple questions
one about the 100% and then why why is it that 100% and then the the the second
one is is that would discover any new provisions that if an institution were
to completely outsource of program as is being proposed elsewhere is that is that
covered in this as well in terms of the teach out so I’m institution I outsource
it and that that would be a teacher as well you talk about written or written
or written arrangements right um commonly we so you will take that
back at lunch and discuss that how that you have talked about how that would
relate to a program where the where a substantial portion of that program was
being provided by another entity under a written or a under a written agreement
that’s yeah that’s my second question no but I I want to confirm so your are you
also asking let’s say that a school offers 85% of a program at a location
and why number one why does this not apply to that okay
what would happen right yeah because you’ve now thankfully defined additional
location somewhere and so and that’s at a fifty percent level right whereas this
says a hundred percent who this says a hundred percent I can see where Jessica
thank you I just wanted to follow up and support what Leah said um we have a
institution that precipitously closed and we have a teach out which middle
state says is in a teach out which is add posted in the close full monthly
report is having teach out schools and the institution is just gone and so you
know easily even as advocates I can’t figure out is it a teach out was it not
a teach out so I think there’s a real need for that and I’m just to clarify
these definitions for a teacher plan and teach our agreement exist in the current
regs but just in the accreditation section it looks like they’ve been moved
and so some of this language was already there on page five if I’m reading this
correctly it looks like there’s there’s pretty similar definitions already in
there right so yeah they’re not coming up from scratch yeah most of these
definitions are not being created from scratch most of them were moved from the
602 regulations in an attempt to move things that applied to more than one
section two part 600 there have been some changes however and that’s part of
what we’re discussing Julian we can take comments on if you like we don’t have
our accreditation expert Beth with us today if if we need to bring someone
else down from accreditation we can so we definitely can on the top of page 25
of the accreditation section where it talks about well an online option may be
made available to students enrolled in a closing ground-based program such an
option is not sufficient unless ground-based options are also provided I
guess I would just you know I think we’re all have the same interests in
mind which is making sure students have every option to
complete their programs I guess I would question
this provision given sort of the current state of higher education and how so
much is online allowing potentially for an option for an institution to offer an
online option and not precluding that here so I can bring it up in the larger
group to I think there are some other folks on the full committee who also
have concerns about it but I’m just wanted to mention that that has a teach
out tie-in well hold on to that but it probably would be best to bring up in
the end the main community discussion around accreditation David just might go
back to what I think where else was asking and that is if an institution
outsources a program and the outsourced provider goes belly-up how does what
happens I think first of all you – I’m gonna clarify some terms here I I don’t
look at what’s being done under under six 68.5 is outsourcing I I think we
need to keep it in context that it’s a written a written arrangement with what
what traditional schools call consortium Arrangements where you are students
taking coursework at another institution and you are you are agreeing to accept
that coursework back for credits your own institution as if it were as if it
were taken at your own school so I don’t see I don’t know that I think our
outsource is necessarily a good word for that if so use your question if if the
if the other entity be it eligible or ineligible where the student is taking
is taking another course work goes goes out of existence what does that do what
I guess what I’m asking is so there is also a proposal if I understand this
right to allow institutions to partner with unaccredited providers right so
that’s what I’m calling outsourcing yeah yeah so I can speak a little bit to this
though I do think it is something that we’ll have to look at in the language
but my understanding is that the language is proposed here would
anticipates a case where a sent that the probe
the program was provided through a written arrangement what this says here
is that if a program or a location closes regardless of who’s offering it
then at each out that this of this definition applies so it’s we’re not
that this language is not sort of exempting cases where part of the
program is offered through a written arrangement and it’s not least that’s
not the intention but I’m in looking at the language I can see where that that a
concern may arise there and so we may need to go back and look at the language
that I would point out that even even in the case of a you know where we’re part
of a program is being offered through a written arrangement that it’s still the
it’s still the entity it’s still that school’s program and that is Davis I
think is what Dave was trying to say it remains that institutions program and
that institutions responsibility here respective of whether there is a written
arrangement in place with an eligible or ineligible entity it’s but but just
again back to that point in the written or ain’t in the proposed route we
haven’t gotten there yet but in the proposed written arrangement regulations
we specifically have language that says provided by which appears to be mimicked
here and if it were treated in the same way I can see where the concern comes up
so we’ll take this back and we may have to make some adjustments to this but
again it’s my understanding that that was not the intent we don’t intend to
exempt those cases that each out when a program shuts down when a location shuts
down and students are in a position where they can’t finish those things
this applies this is what a teach out is and that doesn’t matter whether you’re
in a written arrangement or not and we’ll find a way to address it yeah so
thank you for for looking at that I am my concern is that let’s imagine it’s a
small institution outsource is a good part of the program or all of a program
whoever’s providing that outsourced instruction goes belly-up it may be fine
to say yeah but the institution where the student is enrolled is still
responsible but that institution is now not in a position to respond and and if
if in the situation you described the student was a nun unable to continue in
the program either at that institution or in some other capacity then that’s
again a case where I teach out maybe the appropriate
mechanism so again the definition is supposed to apply to those cases and
we’ll find a way to make sure that it does yeah I think so we’re gonna take back a
few things that we can maybe talk about after after lunch on this topic but I
think we’d like to move on to some other things to get through before that point okay we’re going to move on to 630 before we move on to ownership we’ll
this isn’t necessarily on your agenda but we’re going to we have to look at
definition of an institution of different types of institutions and in
part 600 so the first thing we’ll look at it’s 600 point for the institution
the an institution of higher education it’s not in the definitions it’s it’s got some section there 600 point 4 on
page 8 you’ll note the you’ll note the only change if you turn over to page 9
and looking at what is the what is considered to be an institution of
higher education on page 9 you’ll see in C the secretary does not recognize the
accreditation or pre accreditation of an institution unless the institution
agrees to submit any dispute involving an adverse action such as the final
denial withdrawal or termination of accreditation to initial arbitration
before initiating any other legal action so what this is doing here is the the
this is an existing regulation the pre accreditation is already there it’s it’s
required by by statute and reflected here in the regulation we’ve added
adding an adverse action and the adverse the definition of adverse action is
actually found in 600 point2 so we could go there and
datian and look up I’m sorry that’s 600 point two six part 602 my mistake under definitions adverse actions found
at the top of page two so you’ll note that basically what’s happening here
with the addition of adverse action is that it kind of expands what was
currently in 600 point for the denial withdrawal suspension revocation or
termination of accreditation and pre accreditation or any comparable
accreditation crediting action an agency may take against an institution so it’s
adding just sort of sort of adding to that or making sure that that’s included
too for instance the file denial withdrawal termination so right now the
the regulation pretty much mirrors exactly what’s in statute and then we’re
adding adverse action to it we’re doing the same thing in 600 point 5 under the
definition of a proprietary institution of higher education we do the same thing
in 600 point 6 under the definition of a post-secondary vocational institution so
all those types of controls we have added an adverse action to I should also
point out that the the that the requirement for arbitrate for for pre
dispute arbitration is also in in 668 point 14 as well any questions or
comments any comments on on that okay I also then
another change we have under 600 point 5 at the bottom of page 10 in e so the
current rule is for purposes of this section a program leading to a
baccalaureate degree in liberal arts is a program that the institutions
recognized regional accreditation agency or organization determines is a general
instruction program in the liberal arts humanities disciplines or the general
curriculum falling within one or more the following generally accepted
instructional categories comprising such programs but including only instruction
and regular programs and excluding independently designed individualized
programs and unstructured studies and I won’t read the entire definition it goes
on the page 11 but what we’ve done here is stricken the portion of this that
references is a program that the institutions recognized regional
accreditation agency or organization determines is a general instructional
program Judy yeah I was just wondering what the purpose of this change was so
well let me start out with some context as to what this change affects so if you
scroll up just a little scroll if you look a little bit above I’m the only one
with a computer over here if you look a little bit above you’ll see that the
concept of a baccalaureate in liberal arts applies very narrowly to
proprietary institutions and it’s a specific statutory carve out for a very
specific set of programs that that are at that are eligible programs even even
though lead to gainful employment in a
recognized occupation as all other programs that proprietary institutions
are required to do so it is a statutory requirements and the statutory language
is broader than what’s in the definition currently so what the what the
department is doing here is simply making some simplifying changes to the
definition that’s in the regulation keeping in mind that the statutory
requirement and the statutory carve out is in place regardless of what we do
here Amanda sorry I just wanted to go back to just a
general comment that I was after reading the section D or D and 605 600 point 5
for a deed the secretary does not recognize the accreditation of an
institution unless the institution agrees to submit any disclosure or
dispute involving an adverse action such as the final denial withdrawal
withdrawal or termination of accreditation to national arbitration
just as a point for arbitration I my brain started working I’m not sure if
the arbitration has made public to students I guess I was just thinking
back to disclosure and making sure it’s public to students or just the general
public what like what the results are the Department of Ed like requires this
as a floor well first of all I want to point out this is a statutory not not
that the adverse action being added is not statutory but the requirement you
see there if you took out what we’re adding it comes from statute so the the
requirement for for instance this has to was an institution not this has nothing
to do with pre arbitration or pre dispute arbitration agreements with
students between students and institutions it’s got nothing to do with
that it has everything to do with the fact that with with an institution’s
relationship with a with an accreditor so that before the before the
institution which has an one of these act an adverse action or
the creditor takes an action such as denial withdrawal or termination before
the institution whose subject to that action can take any additional legal has
any additional legal recourse they have to they have to agree to
initial arbitration so that’s part so when when the institution signs its
enrollment agreement to participate with us there’s there’s a contract they’re
signing that they will they will consent to this as far as help help how public
that would be if that occurred I’ll turn that over always that of my
accreditation people to see how public that would be well the recognition
criteria require a creditors to make public any adverse action or sanction
such along the lines of probation so it would be available to the public and the
Department of Ed has a section in its website as well that indicates if an
institution is on a probationary status whether the institution is appealing
that action what this is saying is before you can go you know full-blown
lawsuit with the accreditor for taking that action arbitration has to be an
immediate step is your question a minute I think I just wouldn’t want the results
and I guess not the process to be like just the results the end result to be
made public because pretty severe the consequences are so the outcome of the
outcome the outcome of the initial arbitration between the between the
institution and the and the creditor throughout arbitration I mean it’s all
public I mean they’re they’re still under sanction I mean this is the
sanction that is the public facing decision remains in place throughout
arbitration throughout the lawsuit until it is finalized
one way or another so there it’s always publicly disclosed so the sanction I
think the sanctions occurred and so irrespective of whether it’s in
arbitration whether it’s going through a lawsuit after that sanction remains the
same it’s the sanction that the that the accrediting entity has taken and that
and that sanction is is publicly disclosed Judy yeah um I haven’t fully absorbed
this change in subsection II but I’m I want to flag that I have reservations
about it because if i if I’m understanding correctly and again I’m
skimming here but it looks like you’re effectively allowing any national or
specialized accreditor to provide full access to title for dollars so if you go
back up and again you’re not scrolling you’re just looking up but if you go
back up to the section that describes where this applies hold on a sec it I
believe is that’s it yeah that’s it so it’s under 600 point 5 and it’s a 5 B
and then B 5 romanette 1 B 1 so it says this is a proprietary institution has
provided a program leading to a baccalaureate in liberal arts is to find
in program paragraph II which is the part that we’re adjusting continuously
since 2009 is accredited by a recognized regional accrediting agency or
Association and has continuing lessee held such as accreditation since October
1st 20 2007 and that’s part of the statutory requirement and there’s no we
can’t make a change to that so those are the two things that have to be in place
what all we’re changing here is what the regulatory definition of the program is
and we’re just simplifying it it’s it’s not something that changes the
eligibility of these programs and and my understanding though I don’t have a list
of the programs is that this is affects a very very very small number of
programs that proprietary institutions that’s that’s that’s a very good point
and I want to point out as well that so going back to be one again as David was
reading from before just to flesh that out this is accredited I’m sorry has
I provided a program willing to a baccalaureate degree in liberal arts as
defined in paragraph a of this section continuously since since January 1 2009
there’s also that calendar limitation on it I also want to point out that when
you look at yes we’re taking out we’re taking out the language that refers to
the regional accreditation agency or determining whether this is a liberal
arts program but if you look further on in e going on to page 11 we still have
stipulations there as to what that liberal arts program must be so I think
it’s important to point out that we’re not just saying to the school like you
can make it anything can be a liberal arts program without any limitations
whatsoever still has to meet what’s in 1 2 & 3 do we have any more comments on on
those sections okay if not we’re going to move on to 600 points 31 and what
we’re doing here is modifying the definitions of a closely held
corporation parent person and the standards for identifying changes in
ownership and control to more accurately reflect how those entities are
considered under Sec rules so page 25 631 page 25 okay so as we look down here on unpaid
25 under 600 point 31 change of ownership resulting in a change of
control for private nonprofit private for-profit and public institutions that
you’ll see we have stricken the word corporation basically what we’ve done to
here is taking out references to corporation and moving to referring to
the EDD to an entity so that it doesn’t restrict our scope you can see here as
we go down to closely-held corporation means a corporation qualifies under
state law of its incorporation of it’s a corporation or organization so just
broadening what that is and again if the state has no if the state of
incorporation or organization broadening that to be where it’s incorporated or
organized and you’ll see similar changes throughout throughout this regulation
and moving on the person for instance first includes a legal used to be just a
legal person but now entity or natural person what all this is reflecting where
we’re talking about entities as as the department being is an evolution in the
way a lot of institutions are held so just from just from being a corporation
to now being being entities and allowing us to to look at these in a more broad
sense and I Denise do you want to make some clarifications on them no I mean
that’s pretty much it’s kind of a trying to we’re trying to on the Reg evolve as
to what we’ve been seen in terms of the last 10 or 15 years structures are
outside just the traditional what people think as a corporation so that it
captures for various there’s various components in here in terms of change of
ownership past performance provisions things like that that dealt with the
term before was corporation and we want to make sure that it’s understood that
if it’s in the structure and it’s an ownership in for title for purposes that
it’s also considered under these rules and it’s not just strictly held say as
corporation or something like that so they wanted to broaden to say
organization or entity to capture what we’re seeing come up now instead of what
was 20 years ago that’s basically the need for the change there Leigha certainly for-profit structures have
gotten very very complex with multiple levels of subsidiaries structure in
between the institution and the pent altima parent I’m just wondering if this
needs to be clear that we’re talking about the ultimate parent I don’t know
but I have seen arguments made that well you know it’s three steps below that the
change is taking place or something’s happening at the ultimate parent that’s
really not affecting the school at all I’m just wondering if we want to be very
very clear that we’re talking all the way to the top of this change enforcement the whole thing so so it
should go to the very top of the organization and I mean I would order to
argue to the top shareholder level I mean be individual people in control at
the very top nerdy I think mine was going to be similar that in addition to
wordsmithing the part on parent I think it’s it’s not it’s not clearing okay léa léa – Jesus wanted to make another
kind of no problem I just kind of lost track there okay we’re going to move
next to 600 point 32 the eligibility of additional locations just broadly going
over what we’re doing here well where we’re moving the two-year requirement
found in 600 point five a seven and 600 point six a six and stage 28
Oh page 32 28 page we’re at 600 point 32 page 28 of your materials so we’re
removing the two-year requirement and circumstances were the applicant
institution and the original closed institution are not related parties have
no commonality of ownership or management and the applicant institution
agrees to accept liability for the closed schools for the closed
institutions prior actions and it’s unpaid refunds during the current term
and for one prior academic year and to abide by the closed schools refund
policies we’re also permitting an institution to apply to have a location
that does not meet the two-year requirement added to its program
participation agreement if the institution is conducting a teach out
pursuant to a teach out plan approved by both accreditation agencies so the first
one is just as a recap you’re familiar with the two-year rule which requires an
institution to have been in existence for two years and offering continue and
see if I get this right with my eligibility people here continuously
offering an eligible program in order for it that entity to become eligible so
there is that that that consideration there this change I believe would assist
institutions that are that are purchasing their purchasing institutions
which have closed that would make it so that they do not have to
so that the two-year requirement would not be applicable to them if they as we
said here if they have no commonality of ownership so we wouldn’t be allowing for
one and the one one school within it within a corporate entity to purchase
another one and and have this waived and also that they agree to accept the
liability for the closed school and make all the unpaid refunds so this is
essentially facilitating the operation of a school without having without
imposing that that two-year limitation where where some other end is coming in
and purchasing at school just one clarification the first change
adds an additional requirement for an institution to receive that that sort of
carve out – to not have to undergo the two-year requirement the additional
requirement is that there’s no commonality of ownership yeah we don’t
want cases where you’re just trading off schools and you’re avoiding having to
operate for two years so questions about that will stop first Jessica thanks um I
have some serious concerns about how this provision would play out we’ve seen
Domino’s school closures where students school is closed there’s like a career
fair other struggling schools come take their students call their cell phones
over and over take those students seven months later that school closes and I
have some concerns about the way that this is setting it up specifically the
only taking on liabilities for one year seems deeply concerning I think we all
know like I’d have questions about how you’d imagine that interacting with
borrower defenses those are not I think it’s unlikely that anything you know the
year span is really short but even things like clothes school discharger
and the case of the school that closed near me there was on an audit where ed
has a big claim from like improperly paid title for funds like from back from
oh wait and now add is a creditor and the bankruptcy it seems like that
wouldn’t fall under here like there’s a lot of things in my gold past year so I
think generally just you know trying to make sure that any
institution that’s coming in a closed institution is like really doing the
best they can first chance and is it just sweeping up students avoiding some
liability and then hurting them again might take five minutes we’re gonna
answer you the the purpose behind this because I deal with a lot as I told you
guys this kind of scenario with the regional offices to what the department
is trying to do is like take away an impediment from other institutions
coming in and setting up shop at that location we’re not trying to let anybody
escape liabilities the liabilities would still remain with the prior institution
but we don’t want to stop them from coming in so that the student could
possibly get a teach out and then they’ll come in because in reality a lot
of schools don’t want to come in and just do a teach out unless they this is
my experience unless they can also maybe set that up as an additional location
for their entity so we’re trying to facilitate possibly entities coming in
doing the teach out so that the students can complete their programs I understand
your concern about another potentially faltering institution or what you were
considering a bad after institution coming in the scenario it’s been a
scenario but the department does still have to look at this and approve it it’s
not an automatic whoever applies gets to become an additional location we do
still do our due diligence and looking at all the factors and I can assure you
that the department does check for other things that have happened at the
institution that wants to come and so that’s basically where we set up I could
let my colleagues if it yeah a couple a couple of things though to clarify why
we’re doing this so first your point is well-taken about not wanting to see
Domino effects of once to one institution taking on a failing program
and then failing right after that and that’s part of the reason for the
language at the beginning here where we say that you can’t have this doesn’t
apply when comment there’s common ownership of the institution that closed
and the institution that’s coming in that’s one protection that we’ve
included obviously if you think there are other things that we could do we
will certainly be interest your ideas but the other part about the
liability keep in mind that this is talking about the incoming institution
the institution that one of the term that sometimes used is white the white
knight institution coming in and trying to find to teach these students out they
want to purchase this location and start offering the program but let’s say this
was a catastrophic situation in which the prior institution owed five hundred
million dollars in liabilities to the department the department already is
unlikely to be able to collect those liabilities because of bankruptcy
proceedings or other kinds of issues and institutions that are coming in to help
these students are gonna say well I don’t want this I don’t want this
location I’m not going to offer this if I have to take on five hundred dollars
in liability so this limiting language is designed to make it possible number
one for the department to potentially collect some of those liabilities from
the incoming institution and number two make it palatable for that institution
to to decide they want to do this and start offering these these programs to
the students at these locations and the last thing that that we did here was our
case teams pointed out that another limitation is that we had this language
where a school couldn’t come in and do this unless we had actually taken a
suspension termination something some other action and that limited our
ability to approve these cases so this language is now replacing that saying
that the secretary has to evaluate and approve the plan but we don’t have to
terminate someone necessarily in order to do that so this is all designed to
kind of make it possible for us to deal with these situations when they come up
and let other schools come in and help so anyway to the extent that we can do
that better and we’re interested in your in your suggestions on that but that’s
the that’s the point of this Lea I’m sorry we’re getting blocked by that
thing bottle that’s why Jody yeah I I actually initially have the same
response as Jessica to this provision and then the more I looked at it and I’m
not claiming to have the answer here but I’m just wondering if this is something
that would protect students in certain ways I can see the trade-offs right if
you’re worried about students who lose out under the closed institution but but
there is a cadre of students who potentially could be helped if you’re
incentivizing institutions to more stable institutions to come in and take
over so justified parody or Lia did you learn
it you pluck it up or no I’m sorry so you’ll recognized I wanted to point
out that under the revisions for accreditation there is language that
says the addition of a permanent location at a site where the institution
is conducting at each out for students of another institution that ceased
operating so it appears that you’ve connected the dots to not only allowing
this provision here under eligibility but you’ve connected it to making it
specific that a creditors are paying attention to any additional locations
being added at sites for Teachout students students in this situation are
incredibly distressed and when you’re taking that on as an institution coming
in I mean it’s a huge commitment of resources typically they don’t get any
money out of it I mean they are expending resources to handle the
Teachout often in good faith often is just a contribution very rarely is any
is there any financial benefit to an institution coming in taking over
location and teaching our students it’s it’s a very stressed situation Mary
I’d like to propose that we come back to this one at the next meeting
I find myself torn I have pieces that make me nervous about it and pieces and
having it been at an institution that’s worked with a number of teach outs just
making sure we define whiteknight closely enough that we don’t have
students going through this I just think it’s something we all probably need to
go back and talk to our constituencies about because this is key language and I
think we do want to enable the opportunity for people to come in and
and take it over and put these students back on the right track but I share a
lot of the concerns that have been mentioned that we just think on this
more we can certainly do that remember we we come back and we have two days
prior to when we report back to the main committee so there’s nothing nothing
which it was just saying that we have to arrive at some type of a conclusion here
today or any kind of recommendations so that there’s no problem with doing that
Amanda are there any scenarios where you saw this being done well it was just
more of a hypothetical scenario where it was coming from a framework or the
discussions were around you know we want to create help students ease this chaos
maybe if we we create this provision and leaning on the side that it is a good
actor this would ease students like life cycle
I’ll start them turn it over to my colleagues and who have more contact
with with eligibility but I think that this this is rooted and again going back
to what Denise said we have we have Institute we have cases a lot of
instances where we have schools closing and the need to to accommodate students
by allowing them to continue their programs this allows this allows
entities to come in sort of the white knight that you suggested before and and
and operate those locations and and and allow students to continue their
education as as you can well aware was as you can well imagine when students
are faced with the closure of the school can be a pretty traumatic event for them
so this makes it easier for us to to facilitate that without whole
them accountable to the to the two-year requirement that would otherwise be
existence no I understand I think I was just looking for an example like is
there an examples well I mean I can’t really give you a specific specific
school cuz we said we wouldn’t talk about specific schools but we have had
plenty of situations over the last three to five years where we are trying to
work situations and we have an impediments one of them being that there
had have been a subpart G case taken which is our termination suspensions and
a lot of our schools that are in trouble are not in that realm where you would
have to take that action because we have other forms recertification denials and
things like that so we have had schools tell us that oh we would have taken it
but there’s a huge liability or we’re gonna have to wait out two years and
then the students of course aren’t going to get helped in those situations so
this is a real-life concern and we have seen it over and over and over again and
as Lea said and I wasn’t trying to downplay the schools coming in cuz we do
have schools come in and I’ll just do a teach out but it is a significant
significant expense for them and especially in light of the fact that in
a lot of cases where we have a bad after school that precipitously closes they’ve
already taken the students title four down so that the school that’s coming in
there’s no more title for left for them to get so they are doing it on their own
dime so we are trying to help take down any impediment so this isn’t something
that was just hypothetical we have had numerous situations over the years where
the school can’t come in and do anything because of our tenements but we wanted
to make sure there was no commonality to avoid as Dave said and as Jessica’s
concern was where we have the domino effect where they’re just kind of kind
of moving their liability from one place to another and and just one more piece
of context and I think this ends up being most important where the
institution that is attempting to teach out the students doesn’t have a
convenient location near where the students were already were because in
many cases that’s how they’ll do it they’ll say well you can come and learn
at this location but if that’s a hundred miles away and students have been have
been going to the same place for for their entire college career that’s not
an option for some students and those students are a end up discontinuing
their education so this that’s another reason that they were pursuing this just
briefly I think to the extent that ad has examples and minds
that are used to justify rule changes that would be real I I know you maybe
don’t want that to be part of the discussion but it would be really
helpful if you could share that so we’re on the same page I mean substantively I
just want to raise again especially to Mary’s point that were in a world in
which ad his proposed to take away a closed school discharge for anyone who
has the availability of a teach out and that is a lifeline for people and so I
think you know if we’re living in that world unless that is going to tell me
that we’re not living in that world anymore I think that we really need to
like have a really high bar for what does it teach out because it’s really
important because people are potentially gonna lose like a huge right go ahead a
memory so I was part of those negotiations when we did that round of
rulemaking last time and we had written an NPRM we are in the process of
rewriting an NPRM and the idea of that with the closed school discharge where
you would not be eligible if you had the teach out available to you is no longer
what we are considering that is no longer the policy direction we are going
that will not be in the next NPRM that you see thank you Gregory did you want
yes this is a summary I think that so i i i I think that I don’t see a lot of
wholesale opposition to this I think that what what I’m sensing is that
there’s general support for it but some of you have some reservations about the
language and may want to put some more parameters around or think about what
those might be so I would encourage all of you to to do that in the intervening
month before we come back we can certainly revisit this and we’ll make a
note of where we are where we are now and there’s no reason why we can’t
entertain those that discussion again will we return yeah so I think we’re
about getting close to lunchtime but I because I is I’m giving a maiya culpa
here I missed something in my earlier discussion of distance education and
correspondence and so I’d like to go back to it and just talk it through
really quickly before lunch if that’s okay with
our meeting organizer since Davis fallen on sword will let him well let him go
back and discuss what he missed yes sure no problem
Oh quickly before lunch yes okay yeah the department well I can give you a
definition of quickly before noon so I’d like to go back then to 600 point 7
which is where we define limitations on institutional eligibility all right and
then I think if someone can find the correct page it’s on 22 of mine but it
might be on someone else sorry 12 that’s it page 12 yep
so just as again as context this section describes the limitations on an
institution sly eligibility and there are various different ways there various
different statutory limitations on on eligibility one of them is on
incarceration another one is on correspondence students so the
limitation is that an institution can’t have 50 percent of its students be
correspondence students and it can’t have 50 percent of its courses be
correspondence courses so those are two separate and distinct I limitations on
eligibility so in that the this regulation currently has a description
of what constitutes a correspondence course but they’re up until today has
not been a specific description of what constitutes a correspondence student so
what we did in under under be special provisions regarding correspondence
courses and students as we added a 2 that explains how an institution is to
calculate the number of correspondence students we feel this is important
because it provides a critical definition for a critical institutional
eligibility requirement and I’ll read the department’s proposal for this
calculating the number of correspondence students for purposes of paragraph a12
of this section and that is the part where it says that a school with 50%
correspond students is ineligible a correspondent
student is a student whose enrollment during an award year was entirely in
correspondence courses Killian yeah my initial response to this provision was
to be concerned about whether this makes it kind of easy to gain the system right
if if if it’s easy to beat these restrictions by simply putting a student
into distance ed program to kind of evade being caught under this
requirement Julian I was wondering that’s right there was no definition on
how this actually would play out there are a very limited number of cases where
this calculation comes up because of the small number of institutions that are
actually offering correspondence courses but when it’s come up the Department has
taken the position that that even one correspondence course it could could
constitute a correspondence student if they were taking one correspondence
course during the year and all the other their other courses were residential
that isn’t expressed anywhere in regulation and so this the leadership
wanted to make it clear and and change that policy somewhat so that it’s it’s
clear to schools where the line is now we’re interested in your in in your
opinions about where that line should be about when someone is considered a
correspondence student but we felt that it needed to be expressed in regulations
yeah I mean this seems like it would create a pathway where if I wanted to
make sure my students thought access to title for I could have them take you
know I don’t know 15 credits of correspondence courses and then a one
credit distance of course that doesn’t really have much content in it and all
of a sudden that school all those students are eligible for Table four
when perhaps they should not in Lea well probably not before lunch but this
also goes to that regular and substantive definition issue you know
what happens when an institution goes through a program review and they’re
told oh you know this distance ed students are actually falling into your
correspondence course category and you know are there any kind of conversations
we need to have as a group about about that because I think this definition has
meaning when we’ve kind of decided once and for all
the the distance education definition right
yes that’s correct and there is a direct connection with with distance ed in the
sense that if an institution is not offering a distance ed course it’s
offering a correspondence course then a student enrolled in that correspondence
course may or may not become a correspondence student under this
definition so we know if you guys think that that this this language creates a
loophole we’re interested in what we could use instead we don’t necessarily
have to do it before lunch but we’re interested in your suggestions David I’m
not sure if I have a great solution but independent study is a lot like
correspondence and institutions do independent study all the time so so I
would think that you’d want to have the option for students to do independent
study slash correspondence periodically it’s part of the curriculum but I mean
so the 100% rule is probably too much so what what if folks think about a
majority or yeah a significant percentage of it was or a majority or
some other wide well you have fifty percent for everything can be
interpreted in different ways by point point well taken from council did anyone
have any thoughts about a majority since that’s the that maybe is a better phrase
predominantly you need to come up with a number
you need a number because any of those terms you also have to make certain as
someone who’s been whether it’s 50% up to 50% and 50% a greater that’s got to
be clarified right parity I’m just going to say Anchorage is not to do the 50%
just because it’s in everything else I in my mind is 75% it’s a better balance
because it does keep if you’re trying to load them up on correspondence courses
at the same time the non correspondence numbers are going up as well but it hits
some some of our part-time students may take six nine hours a year so 50
percents a pretty low threshold I think 75% it comes closer so I just
say that out for people to think about yeah I don’t think David your example I
mean if your independent study courses are look like correspondence they
probably our correspondence right so there’s still an expectation with
independent study and only having such a hard time remembering that term
independent study courses that there is all of those things that fall into the
definition of distance education so I’m not sure we’re solving for that right
now though I understand your point Jessica sure I’m just a little confused
maybe I’m behind the curve but it looks like there are like four different 50
percents in this correspondence school thing right so like more than 50% of the
courses are correspondence courses 50% or more of the students were enrolled in
correspondence courses and then we have different correspondence students so
maybe this isn’t like a six minute discussion but I’m just confused about
how those interact and I think more to the point you know we don’t want a
scenario that can be gamed that’s all you know that we want and so we don’t
want half the students in 49 correspondence and 51% the students at
100% correspondence or whatever just you know rules that make sense what’s you in
that at lunch with your food David so my point about the independent
study is again to to not single out online modalities as the only way to get
correspondence because independent learning and study at an institution
where a student is doing work with a faculty member meeting with that faculty
member maybe once a semester handing stuff and emailing that looks a heck of
a lot like correspondence and yet we don’t call it that right so that was my
only point in bringing that up you know percentage-wise sorry was just
I think there’s definitions in probably six six eight or somewhere else about
calculation of aid for students and correspondence courses and if they’re in
some correspondence courses and others I’m just curious because I haven’t given
this any thought right now but like how does this intersect with that or does
that that is good context so aid is calculated differently for
correspondence courses correspondence courses cannot make a student go above
halftime status for purposes of calculating their Pell Grant and also if
you’re in a correspondence course the cost of attendance for that course is
limited to tuition and fees I think books and supplies and so those are
things that are true for correspondence courses but this really isn’t talking
about the correspondence course this is talking about solely this change
students that are enrolled in correspondence courses so being a
correspondence student really has no other application except the
institutional eligibility application this is applicable to the institution it
is not applicable to this to correct this particular particular provision
does not affect student eligibility per se yep and so I’ve I’ve heard a lot of
good things around the table but this is one I know I knew that we weren’t gonna
get through this before lunch but I figured you guys would want to take a
little bit of time to take take this back think about it and and come back to
us with some suggestions and we’re open to that
we don’t you know we don’t want to create a loophole but we also don’t want
to make make it you know possible for a school to potentially get close to or
lose eligibility inadvertently because they’ve because they’ve missed something
in in in these requirements so we want to be careful about where we set the
threshold and that’s what we’re that’s what we’re about with this regulation so
with that I think I think Gregory what time would you late to five ten after
that I mean all right all right I’m gonna be very own because I’m so
magnanimous here and I want that noted for the record 15 after one and I think
thank you sir that’s huge huge oh yeah
Scott has pointed out please take your badges with you for ease of Rhian tree yes if you’re bringing back a lot vision
for lunch an anticipation of leaving we have places you can store it I do know
your luggage will have to go through the scanner you you you
you you you you Oh you

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