Seeking Your Input on Fraud, State Authorization, and Other Regulatory Issues

In mid-April of this year, the U.S. Department of Education announced an “intention to establish a negotiated rulemaking committee to prepare proposed regulations for the Federal Student Aid programs…”  Through this process, the Department is visiting or revisiting several issues that are near and dear to the hearts of those of us in the distance education community:  financial aid fraud and state authorization.

It is also taking input on other issues, including: cash management of federal financial aid funds, state authorization for foreign locations of institutions located in a state, clock-to-credit hour conversion, gainful employment, and changes from the Violence Against Women Reauthorization Act of 2013.

This is the beginning of the process for the Department creating new regulations on these issues.  It is important that our voices be heard at the outset.  We wish to help inform and guide these discussions to dispel some of the misconceptions upon which some regulations were based in the past.

Seeking your input

On behalf of WCET and the WCET State Authorization Network, we will be submitting comments on the following issues.  I’d love your help, feedback, and suggestions on what should be recommended:

Financial aid fraud

The Department references a previous call for negotiated rulemaking that was issued in May 2012 that had a primary focus on the fraudulent use of financial aid funds.   While fraud comes in many forms, there is distrust of distance education and great worry about the opportunity for the misuse of funds for students who don’t appear on campus. Such concerns led to the proposal in last year’s federal budget from the Administration to lessen Pell eligibility for distance students.  While that proposal did not go forward, it is probably still on their list of possible solutions.

Briefly, here are some points that we would like to make in comments:

• Don’t confuse fraud (someone faking their identity purely to get money) with academic integrity (a known student cheating on a test to get a better grade).
• Don’t punish the innocent.  The Pell grant proposal was an example of a solution that would be equal to solving the problem of bank robberies by closing all the banks.
• Promote education of the types of suspicious activities that are common among fraudsters.  Sometimes faculty or other administrators can raise red flags that others would not see.
• Promote good practices in combating fraud, both in the administrative and academic sectors of the institution.  The more difficult it is for the fraudster to jump through administrative and academic hoops, the less inclined they are to commit fraud.
• Don’t look for a silver bullet.  It’s not there.

What else would you suggest?

State authorization for distance education

The regulation issued in 2010 was vacated by the federal courts ruling that the proper rulemaking process was not followed.  This is the first step in their following the rulemaking process and my guess is that this regulation is on its way back.  I’m NOT going to recommend that the federal government stay out of this issue because it is with us regardless of what they do.  Some comments that I would like to make:

• If you reissue this regulation, be sure that there is adequate time for institutions to comply and for states to respond.  Even though institutions have been repeatedly warned about this issue, a large number are still out-of-compliance.
• Repeat the Department’s strong support for reciprocity.  In the past, the Department has supported the notion of reciprocity several times, but some people still can’t hear it and previous support was based on the vacated regulation.
• Please provide clear guidance on several issues that remained unclear from the previous round with state authorization, such as:
  • how you will count if a student can receive 50% of a program in another state,
  • will consortia agreements suffice for reciprocity,
  • how do internships (and other experiential learning) fit into the authorization requirement,
  • will the current worries about “exemptions” for in-state institutions also apply to providers from other states, and
  • what is the penalty for non-compliance?

Some of these really get into the minutiae and I will expand in the final comments.

• As much as possible, rely on each state’s definition for authorization and don’t create new definitions to layer on top of those regulations.  For example, differences in regulations could lead an institution to being in compliance for federal purposes but not for state purposes.

What would you add?

State authorization for foreign locations of institutions located in a state

This one really surprised me and it is worded oddly.  I’ve confirmed that by “foreign” they are talking about institutions that have locations in other countries.  With the growth of such institutional ventures abroad, I can see that the federal government might be concerned about the quality control.  I’ve also learned that there are some institutions that are located in the U.S., but teach no students here.  They look like a U.S. institution, but no U.S. entity has approved them.  There’s great potential for defrauding foreign students.  I’m not sure how this fits in with federal financial aid, but we’ll learn more about it. My comments:

• Does this apply to distance education, as well as “locations?”  If so, what does that mean?
• Is this only for federal financial aid?

What are your thoughts?

Overall philosophy

I have one overall philosophy that I wish that regulators move toward adopting:

Regulations should not differentiate by mode of instruction unless the regulations are actually about the tools used in the mode of instruction.

Let’s stop differentiating aid based upon whether a student is on-campus or not.  We should focus on student outcomes.  Our future will see more technologies, more modes of instruction, greater mixes of face-to-face and distance, and a greater focus on competency-based instruction.  It is getting harder and harder to differentiate this modes of instruction as they all become intermingled, thus making the differentiation obsolete.

Stop worrying about the inputs.  The current definition of distance education includes many technologies.  Given the rapid change in technologies, any such list is out-of-date as soon as it is published.

Regulations should be in place when they are actually about the tools being used.  Institutions have been lax in assuring accessibility for the disabled.  It makes sense to assure that access is open to all.

Next Steps

Comments are due to the Department by the end of May.   You may submit your own comments.  To be contribute to WCET’s official response, supply comments below or send your thoughts directly to me at rpoulin@wiche.edu by Monday May 20.  There are also three opportunities to testify on these issues.  The dates and process to register to testify is in the announcement.

This feedback process is just the first step.  Later this year the will ask for nominees to be on a Negotiated Rulemaking Committee to consider specific regulatory language.   We will continue to follow these issues, actively participate, seek you input, provide comments, and suggest stronger action, if needed.

Your input makes our collective voice stronger, so thank you for sharing it!

Russ

Russell Poulin
Deputy Director
WCET – WICHE Cooperative for Educational Technologies
rpoulin@wiche.edu

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