New Federal Regulations on Distance Education and Innovation
The U.S. Department of Education (“the Department”) recently issued its final regulations on Distance Education and Innovation. 85 Fed. Reg. 54742 et seq. While these regulations are the result of a successful, consensus-driven negotiated-rulemaking process with a diverse group of education experts as negotiators that commenced in 2018, they are even more timely and necessary now in this pandemic year. Many institutions are having to educate remotely for the first time or for the first time at scale. Teaching with technologies like Zoom or Microsoft Teams has served as temporary remote learning model. However, those methods do not meet long-term expectations for quality distance education, which requires regulatory attention and oversight, just as on-ground educational settings do.
For colleges and universities, accrediting agencies, students and faculty, these regulations are important for two reasons. First, they are intended to improve certain regulatory and accreditation standards that protect and encourage quality and accountability. Second, they provide institutions a more flexible regulatory framework to disburse federal aid when offering more innovative methods of teaching and learning. This summary highlights changes to the regulations by focusing on three areas – the updated definitions; the relationship between Title IV aid to students and time; and, the changes to streamline certain approval requirements. At points, it also refers to the Department’s lengthy preamble accompanying the regulations, which serves as important additional guidance.[1]
Clarification of Key Definitions Relating to Distance Education and Innovation
Federal law and regulations defining modalities or education methods have not kept pace with advances made by institutions of higher education (institutions or IHES) and other parties in higher education to innovate and expand their offerings in distance education and other modalities – like direct assessment and competency-based education. Short of statutory reform, these regulations take important steps to catch up with the marketplace. They clarify what constitutes distance education (as opposed to correspondence education), establish more clarity around the definition of direct assessment program eligibility, and expand or create definitions for terms like academic engagement, full-time student, and subscription-based programs to better contemplate modern-day non-traditional learning situations.
Correspondence and Distance Education
The prior definitions of both correspondence and distance education needed updating to better match the realities of current academic offerings. Most importantly, the two modalities needed to be more clearly distinguished. These new regulations distinguish between correspondence and distance education by re-emphasizing that distance education must include “regular and substantive interaction” between the instructor and student, whereas such interaction is limited and primarily initiated by the student in correspondence courses. For the first time in regulation, the definition of distance education is now centered on defining both regular interaction and substantive interaction. Of note is that this interaction is driven by the instructor or instructors. The Department agreed with negotiators that this interaction can be satisfied by more than one instructor with a student and that an instructor need not be defined as faculty. However, the instructor must meet the qualifications for instruction as established by the institution’s accrediting agency.
“Substantive interaction” is defined in the regulations by a menu of permissible instructor-driven activities from which the institution may choose for program design and compliance purposes. These activities must include “engaging students in teaching, learning, and assessment, consistent with the content under discussion,” and two or more of the following: direct instruction, assessing feedback on student coursework, providing information or responding to questions about the content of a course or competency, facilitating group discussion, or other instructional activities approved by the institution or program’s accrediting agency. By including types of permissible instructions, the regulations are meant to provide institutions with the flexibility to build and develop distance education programs according to their students’ needs and/or an institution’s focus.
While the regulatory definition of these terms could be construed as relaxing institutional requirements surrounding interaction, the Department’s detailed preamble guidance provides additional insight into its intentions. 85 Fed. Reg. 54756-62. For example:
While the regulations generally deconstruct time as a required concept, in this definition, the Department has decided that “regular interaction” should be defined in part as “predictable and scheduled”;
The preamble also clarifies that student-initiated activity alone would not meet the definition of distance education since the institution/instructors are the ones who must provide the predictable and scheduled opportunity for regular interaction.
Further, in response to questions posed by written comments, the Department’s preamble also clarifies that instruction by technologies like artificial intelligence, while a permissible form of academic engagement, will not alone satisfy the definition of regular and substantive interaction between students and instructors. In other words, human interaction between a qualified instructor and the student remains a requirement.
It is also important to note that correspondence courses were also previously distinguished as being “typically self-paced”. Today, however, there are new modalities of learning both on-ground and online like competency-based or direct assessment programs that are also self-paced and therefore the regulatory definition of correspondence course had become confusing and problematic. These new regulations delete the qualification that a correspondence course is in part defined by being self-paced.
Academic Engagement
The Department decided to shift the definition of academic engagement to section 600.2 of the regulations, which covers the definition of terms and concepts used throughout the Title IV regulatory construct. Academic engagement is a concept regularly used in the context of return of Title IV (R2T4) revenue but, as the Department notes, it is also an important element of other aspects of regulation, especially in light of newer, innovative modalities for teaching and learning. Indeed, going forward, the relationship between this definition and distance education will be important for institutions to consider.
In its new definition of academic engagement, the Department emphasizes the need for “active participation” by a student in instructional activities that are related to the student’s course of study. This concept of active participation is one that is defined by the institution and meets any requirements of its state or accrediting agency, but the regulations also provide a menu of examples of the types of acceptable activities. Again, the Department’s preamble presents important additional guidance to institutions. The preamble makes clear for example that this definition supports asynchronous learning even though that is not explicit in the regulations. The preamble also emphasizes that the term “other interactive computer-assisted instruction” may be interpreted broadly to include virtual or augmented reality technologies. 85 Fed. Reg. 54749. Finally, the regulations’ exclusions – i.e., what will not be considered “academic engagement” - are critically important to consider. For example, these provisions make clear that neither logging into a class by itself or general academic counseling or advisement will meet the definition.
Full-Time Student
In addition to amending or adding to its general definitions under §600.2 of the regulations, the Department is also adding certain definitions under its student eligibility section in §668.2. The definition of full-time student now provides that a student enrolled in a subscription-based program may be considered full-time and outlines which attributions are required. This addition is a significant positive change for institutions and their students that have tried marrying Title IV disbursement with innovative instruction like direct assessment models using subscription-based tuition structures.
Subscription-based Program
The Department and negotiators’ effort to establish a regulatory definition of subscription-based program is helpful (albeit still complex). The definition provides that subscription-based programs can be a standard or non-standard term in nature and establishes a student’s full-time or part-time status in such program. In coordination with changes to other regulations (like academic year, satisfactory academic progress (SAP), and R2T4), the regulations determine the manner and timing by which students can receive their Title IV funds as they progress. In short, these regulations establish the framework by which students can progress through their program without being tied to more traditional disbursement periods. It is important to note that these final regulations extend the permissible use of subscription-based programs beyond direct assessment programs to include all competency-based programs. This is one of only a few changes made from the negotiated-rulemaking’s consensus-version of the regulations.
Relationship between Title IV Financial Aid Disbursements and Time
In combination with the new and revised definitions noted above, the Department takes additional steps in these regulations to better align Title IV disbursement to student progress with the goal of more flexible non-time-based education models. These steps include important amendments to its current regulations of academic year, direct-assessment programs, R2T4 and SAP.
Academic Year
Short of a congressional change to statute, the Department’s amendments to this section better contemplate how asynchronous learning fits within an academic year and week of instructional time, requiring demonstrations of academic engagement (as newly defined).
Direct Assessment Programs
Changes to the current regulation of direct assessment include:[2]
Clarifying how institutions must determine and demonstrate the equivalency between each module in a direct assessment program with credit or clock hours;
re-emphasizing the role of accreditors in the review and approval of direct assessment programs or institutions; and,
appearing to permit institutions to allow students enrolled in a direct assessment program to progress on a hybrid basis, i.e., with the ability to take both credit hour/clock hour courses or by direct assessment equivalencies.
Return of Title IV Funds (R2T4)
The Department takes important steps in these regulations to amend its R2T4 regulations to better contemplate what attendance, completion, and withdrawal by students looks like when enrolled in a non-traditional program. The new regulations correct unintended consequences where students enrolled in non-term programs (like direct assessment), modules, and/or subscription-based models could be considered under the regulations to have as withdrawn even though they attended a substantial portion of the payment period or progressed through their programs more quickly. The new regulations add specific provisions to guide non-term or subscription-based programs on how to determine whether a student will be determined to have withdrawn, with an obligation by the institution to return Title IV funds.
Satisfactory Academic Progress (SAP)
The Department’s amendments to SAP align its regulations to the new inclusion of subscription-based programs, providing options for how to measure progress. The regulations maintain that institutions’ established SAP policies must specify the pace at which a student must complete their educational program within the maximum timeframe (i.e., 150% of normal time to completion for undergraduate programs). These SAP amendments also attempt to align academic progress to different types of programs and measures of time now created by the other new changes to the regulations. Specifically, institutions with subscription-based programs will no longer be required to measure a student’s progress based on a time calculation of pace and institutions offering credit-hour programs using standard or nonstandard terms will also have the option to calculate pace and maximum time with hours that can be completed at time-based intervals.
Changes to Streamline Regulatory Processes and Encourage Innovation
Finally, these regulations intend to streamline Department processes or reduce burdens for institutions. As examples, these include the following:
Regulatory Approval of Direct Assessment Programs
The revised regulations of direct assessment in §668.10 establish that once an institution receives initial approval of a direct assessment program from the Department, the institution may introduce additional direct assessment programs at the same or a lower academic level without receiving individual approval so long as the programs are consistent with their accreditation and state approval.[3] This change should improve the speed to market for direct assessment programs once an institution receives initial regulatory approvals.
Written Arrangements
While the Department intended to provide more flexibility for institutions to enter into written agreements with other institutions or other non-Title IV entities, the non-federal negotiators could not reach consensus with the Department’s intention. However, there was consensus to create some additional flexibilities. The regulations loosen the limitation of offerings between institutions that are owned or controlled by the same individual, partnership, or corporation. This should allow for more flexible shared arrangements (and enrollments) between affiliated institutions, meaning that students at one institution could take a greater percentage of courses in a program at another if the institutions are co-owned or controlled.
The regulations continue to limit the amount of an eligible program that can be offered by a non-eligible entity to no more than 25% without approvals or up to 50% with accreditation approval.[4] In an effort to spur innovation and workforce coordination, however, these regulations now also include a provision permitting institutions to work with employer-related industry advisory boards on curriculum or academic design as an alternative to faculty-driven/approved curriculum development.
Recertification and New Program Approvals
These regulations also address concerns and uncertainties caused by delays of certain Department approvals. An institution’s eligibility will now be automatically renewed on a month-to-month basis when an institution has applied for recertification of its Title IV eligibility no later than 90 days before the expiration of its Program Participation Agreement but has not heard from the Department within 12 months. While there was some opposition to this regulation, the Department indicated that the Department’s authority to take enforcement action against an institution is not impacted by this new language. 85 Fed. Reg. 54776.
These regulations also now allow institutions that notify the Department of new programs 90 days before the first class to begin marketing and enrollment processes. This change acknowledges that it is helpful for institutions to advertise and seek students for new programs as early as possible to ensure the program’s early success. The regulations also require the Department to conduct timely reviews of new program approvals where such approvals are required and also require the Department to take “prompt action” on applications relating to institutional or programmatic eligibility.
These regulations take effect on July 1, 2021, but the Secretary has used her authority to allow institutions to voluntarily implement any or all the provisions in 34 C.F.R. §§ 600, 602, or 668 early. For more information, please contact Jennifer at Jennifer.Blum@blumhea.com.
[1] Please note that these regulations are highly technical, and this paper presents them at a high level and is not inclusive of all changes made. For example, in addition to the areas covered, there are additional important changes affecting clock hour and credit hour definitions, the education of incarcerated students, foreign institutions and their arrangements with eligible U.S. institutions. The Department also decided not to pursue certain proposed changes to the Department’s financial responsibility standards. This paper is not intended to serve as legal advice or guidance. For specific inquiries or for compliance purposes, please seek counsel.
[2] As noted further below, the regulations also make changes to the approval processes for direct assessment programs.
[3] It is important to note that institutions otherwise on provisional certification status with the Department do not benefit from these relaxations.
[4] These regulations should be read in concert with the Department’s prior changes to accreditation approval processes and disclosure requirements. Under those regulations, accrediting agency processes were streamlined to allow staff approval of certain written arrangements and to require more expedited timelines for review. The Department’s previous amendments to disclosure regulations also now require institutions to disclose certain written arrangements.