Distance Education and Student Aid Rules

Summary

The Secretary amends the Student Assistance General Provisions regulations governing participation in the student financial assistance programs authorized under title IV of the Higher Education Act of 1965, as amended (HEA), to promote program integrity and institutional quality. These regulations clarify, update, and consolidate certain provisions that apply to distance education and the return of title IV, HEA funds. They also make technical changes to the TRIO program regulations to reflect the current status of the Republic of Palau as a member of the Freely Associated States. This document provides notice that the Department fully closes out the Program Integrity and Institutional Quality: Distance Education and Return of Title IV, HEA Funds notice of proposed rulemaking. That is, we will not be finalizing the remainder of the Federal TRIO program provisions but may promulgate through future rulemaking efforts.

Compliance Requirements

1. #1

   Institutions must report student enrollment in distance education or correspondence courses using a procedure that would be determined by the Department; Institutions must exempt from performing an R2T4 calculation if: (1) a student is treated as never having begun attendance; (2) the institution returns all title IV, HEA assistance disbursed to the student for that payment period or period of enrollment; (3) the institution refunds all institutional charges to the student for that payment period or period of enrollment; and (4) the institution writes off or cancels any payment period or period of enrollment balance owed by the student to the institution due to the institution's returning of title IV, HEA funds to the Department; An institution that is required to take attendance must document the date of the institution's determination that the student withdrew no later than 14 days after the student's last date of attendance as determined by the institution from its attendance records; Allow a confined or incarcerated individual, in a term-based setting, to return at a different point in their eligible prison education program (PEP) than the point at which the student left off; Streamline and make consistent institutions' calculation of the percentage of the payment period completed for a clock-hour program; Consider a module part of the payment period used in the denominator of the R2T4 calculation only when a student begins attendance in the module; Technical changes to TRIO program regulations to reflect the current status of the Republic of Palau as a member of the Freely Associated States and remove references to the Trust Territory of the Pacific Islands

   Deadline: 2027-07-01(July 1, 2027)

Market Impacts

• Prohibition on counting asynchronous distance education coursework as clock hours in clock-hour programs, removing this delivery option for affected schools and students; New reporting requirement for institutions to report student enrollment in distance education or correspondence courses using NSLDS (National Student Loan Data System); Improved data collection on distance education outcomes will enable better research and program improvement, potentially leading to innovation and quality improvements; Increased regulatory oversight and reporting requirements create additional barriers to entry and operation for distance education providers

Estimated Monetary Impact

Basis: Department estimates $27.3M total net present value costs over 10 years ($3M annualized) plus $9.4M annual paperwork costs. Small institutions likely exempt from new reporting requirements. Medium/large estimates based on proportional allocation of total costs across institution types, with benefits from streamlined R2T4 calculations and improved oversight. No specific penalty amounts mentioned in regulation.Confidence: 50%

Validated Company Impacts