New Federal Regulations, Part 1: Addressing Programs Leading to a License or Certification

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This is the first of our two-part blog post series on the recently released U.S. Department of Education (the Department) regulations.

This post covers new regulations regarding programs leading to professional licensure. The second post is about institutions complying with closure requirements in each state in which it serves students.

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We have made the Federal Regulations Groundhog Day joke before, but here we go again!  The U.S. Department of Education formally announced the new federal regulations that impact institutions serving students in programs leading to a license or certification and state authorization.

The Federal Register October 31, 2023 announcement of Financial Responsibility, Administrative Capability, Certification Procedures, Ability to Benefit (ATB) includes the release of the remaining four issues related to the Winter 2022 rulemaking, Institutional and Programmatic Eligibility Committee.

It is the Certification Procedures issue that we followed closely, reported on often during the three months of rulemaking committee meetings, and summarized the outcome of the committee soon thereafter. Of utmost concern was the sub-issues of Professional Licensure and Closure/State Authorization that were not announced, but were inserted by the Department and negotiators within the Certification Procedures issue without the opportunity to nominate knowledgeable committee members to share invaluable and pertinent information for the committee’s discussions.

This entire package of regulations was released as final on October 31, as well as the Final Regulations for Financial Value Transparency & Gainful Employment released on October 10, 2023. These regulations become effective July 1, 2024.

Introduction

The Certification Procedures issue focuses on the agreement between postsecondary institutions and the Department that each institution certifies compliance with specific obligations in order to participate in Title IV HEA Programs. The agreement is called a Program Participation Agreement (PPA). The Department’s goal was to strengthen student protections within the PPA. The sub-issues for which we followed were among the new requirements being added to the PPA, even though there are federal regulations that direct institution requirements in these two areas.

You may recall that, when the proposed regulations were released in May 2023, we provided two separate WCET Frontiers posts to share our analysis. Our first post addressed the regulation subsection that appears to require that institutions comply with state consumer protection laws for closure, recruitment, and misrepresentation where the institution is located and where the student is located at time of initial enrollment. The second post addressed the institution’s responsibility to satisfy applicable educational prerequisites where the institution is located and where the student is located at the time of initial enrollment as well as an edit to the currently effective public notification requirements.

The final regulations released have been modified to some degree from the proposed regulations. We believe that the public comments that we all shared with the Department were heard and persuaded the Department to make some changes to the final language. However, we believe there appears to still be some misunderstanding by the Department about the variation of oversight for licensed professions by state and by the specific profession. Additionally, there are lingering questions about the applicability of state consumer protection laws upon institutions that participate in reciprocity.

Please consider sharing your questions with the Department on these areas, especially regarding the challenges of coordination of processes and information with state licensing boards. The Federal Register announcement includes the contact information for the Department staff member addressing this issue. For certification procedures: Vanessa Gomez. Telephone: (202) 987-0378. Email: Vanessa.Gomez@ed.gov.

As a reminder, this is part 1 of two posts. In this first post, we will review the professional licensure related federal regulations. Look for our second post New Federal Regulations, Part 2: Addressing Compliance with State Closure Laws and the Impact on Interstate Reciprocity Agreements.

In both posts we will ask the following questions:

• What does the final regulation say?
• What questions and comments did WCET and SAN share with the Department during rulemaking, public comment period, and the Office of Management & Budget final review (EO 12866 Meeting)?
• How did the Department respond to WCET and SAN’s questions in the preamble of the final regulations?
• What are the implications to the institution for implementation of the regulations?

*Please note that page numbers in the analysis will refer to the unofficial version of the rules released on October 24 as that document is larger print and easier to direct you to the language of the preamble and regulations.

Final Regulations Addressing Programs Leading to a License or Certification: Certification Procedures – 34 CFR 668.14(b)(32)(ii)

What does the final regulation say?

*Language that is in the final release but was changed from the Department’s proposed regulation is in bold.

32) In each State in which: the institution is located; students enrolled by the institution in distance education or correspondence courses are located, as determined at the time of initial enrollment in accordance with 34 CFR 600.9(c)(2); or for the purposes of paragraphs (b)(32)(i) and (ii) of this section, each student who enrolls in a program on or after July 1, 2024, and attests that they intend to seek employment, the institution must determine that each program eligible for title IV, HEA program funds…

(ii) Satisfies the applicable educational requirements for professional licensure or certification requirements in the State so that a student who enrolls in the program, and seeks employment in that State after completing the program, qualifies to take any licensure or certification exam that is needed for the student to practice or find employment in an occupation that the program prepares students to enter;…

What questions and comments did WCET and SAN share with the Department during rulemaking, public comment period, and the Office of Management & Budget final review (EO 12866 Meeting)?

During rulemaking.

From the very start of the rulemaking, WCET and SAN were concerned that the rulemaking committee lacked important input from the professional licensing regulating community. During week one of the rulemaking in January 2022, WCET and SAN provided public testimony asking the Department several questions:

• Had the Department communicated with the licensing community to know the variations of oversight of the many professions and states?
• Had the Department considered any exceptions to this rule to include active military students and military-affiliated students, and others who are temporarily in a location and do not intend to seek licensing in the state where they are located while participating in the program?
• How does the Department reconcile barring a student from participation in a program that may only have minimal state educational prerequisite differences and the profession provides a pathway to a state license to reconcile those differences after completion of the program?

Public Comment.

In the WCET and SAN public comment that was focused specifically on programs leading to a license or certification, we first recommended to the Department that they withdraw the proposed language in favor of continued implementation and enforcement of existing notification regulations that became effective July 1, 2020. In the alternative, we recommended that the Department provide for an exception through the form of a Written Acknowledgment from the student to indicate that the student knowingly is enrolling in the program and providing their reason despite the applicable education prerequisites not being met in the state where they are located at time of initial enrollment.

A detailed review of the Department’s analysis was provided in our public comment to include the lack of data and evidence leading to the proposed regulations. Additionally, we shared that minimal analysis of the issue was provided which was made more minimal by the fact that the Department incorrectly provided analysis in two places in the proposed regulation announcement for a separate subsection of the regulation while citing this subsection.

Five clarifying questions were posed to the Department related to the proposed language of 34 CFR 668.14(b)(32)(ii):

1. If the PPA indicates that for purposes of program eligibility the institution’s responsibility is specified at “time of initial enrollment,” does the program remain eligible for Title IV if the student moves to a state where the program does not meet prerequisites?
2. If the PPA indicates that for purposes of program eligibility the institution’s responsibility is specified at “time of initial enrollment,” if this proposed regulation becomes final and effective, would the requirement only address incoming students or would the institution be obligated to apply the requirement retroactively to students who are already admitted to the program before the regulation became effective?
3. What is the Department’s recommendation if there is the impossibility of the institution obtaining affirmation or some sort of a process to determine that the program meets state educational prerequisites in a state?
4. How does the Department reconcile the limitation on institutions and ultimately students from meeting state educational prerequisites for Teacher Preparation Programs that often include only a course or two in the program addressing state specific history or culture, even though there is a pathway to licensure through NASDTEC state reciprocal agreements and the new Teacher Education Compact for license mobility?
5. If the language in the PPA proposes that program eligibility is contingent upon the institution’s program meeting state educational prerequisites where the student is located, why is there a need for notifications?

Office of Management & Budget (OMB) final review (EO 12866 Meeting).

WCET & SAN provided testimony to the OMB/OIRA meeting which is the final review prior to the Department’s release of final regulations. We shared our concerns related to federalism as we believe that the Department is creating barriers that overstep the state’s rights to create regulations and decisions to how students are served in their states. Additionally, we shared our concerns of economic impact and state burden as we believe that the Department is burdening state licensing boards to create oversight responsibilities as well as disregarding states choices to participate in other pathways of reciprocity and professional compacts to address state license transfers despite state licensing variations. Finally, we shared our concern that the regulations conflict with Biden Administration goals considering the July 2021 Executive Order 14036 to address unnecessary licensing restrictions that impede worker mobility.

Although we had heard that the review panel rarely asks questions, we were pleasantly surprised that the panel asked many questions and remarked upon the specificity of the issues of concern that we raised.

How did the Department respond to WCET and SAN’s questions in the preamble of the final regulations?

1. Regarding “time of initial enrollment” (pages 366-377). The Department points to existing regulation 34 CFR 600.9(c)(2)(iii) that indicates that an institution is to have a policy to make a determination of where the student is located at time of initial enrollment and upon formal receipt of information that the student has changed location to another state. The Department believes this gives the institution flexibility to determine how to structure such a policy.

The Department shares that they recognize that the institution cannot predict if a student moves, and they do not think it is reasonable to apply this criterion in a way that covers students after they move.

The Department addresses the related issue of changes in requirements for existing students on page 484 to say that they do not expect institutions to immediately discontinue programs for existing students when requirements change but do expect the institution to come into compliance with new requirements in “short order” or cease enrolling new students in that program.

2. Regarding retroactive application to students admitted to programs before the regulation became effective (page 367). The Department indicated that its goal is not to have this regulation apply retroactively. The regulations cover new program entrants on or after the effective date of these regulations (July 1, 2024).

3.Regarding the impossibility of determining that the program meets state educational prerequisites (pages 383-383). The Department is very clear in its concern that students who use Title IV funds for their programs do not end up incurring debt because they were not able to meet requirements in the occupations for which they are being prepared. They are very focused on the economic return that could be diminished if the program does not meet applicable educational requirements.

To that end, the Department indicates if educational requirements exist, an institution must follow them with respect to the students attending from those states. The Department further clarifies that, if the institution cannot determine if the program meets the education requirements for licensure or certification, then it cannot offer the program to future students in the state.

4. Regarding state professional reciprocal agreements and professional compacts (Page 398). The Department indicated that they are persuaded by the commenters that the way to meet the state educational requirements can take different forms. The Department expresses its understanding that a student can obtain a license in a different state but allow them to use the license elsewhere. The Department indicates that it believes these situations address the Department’s policy concerns. However, the Department cautions that this option is to provide the ability for the student who obtains the license through an interstate professional licensure reciprocity agreement (and we add a compact) would allow them to work in the State covered by the requirements of the new regulation, 34 CFR 668.14(b)(32)(ii). The Department continues by indicating that this could mean not only a full license, but also a provisional license. This explanation is not captured in a regulatory change because the Department indicates that these pathways are all forms of licensure.

5. Regarding new final language about the attestation option (page 378 and on page 391-392). The Department indicated that they were persuaded by arguments from commenters that students may be living in one state but have plans to seek employment in another state. Therefore, they added a provision that in the alternative of meeting state educational requirements where the student is located at time of initial enrollment, if the student provides an attestation about the specific state for which they intend to move and the program satisfies educational requirements in that state, the requirement of this regulation is fulfilled.

Additionally, the Department indicated that it will be looking for information about how the information about eligibility was conveyed to the student to demonstrate that the student understood their attestation.

What are the implications to the institution for implementation of the regulations?

The Department has fully expressed its belief that a student who pursues a program leading to a license that is necessary for employment, relies upon the institution to inform and protect the student from barriers to employment due to the inability to meet educational requirements where the student is located while participating in the institution’s program. The final regulations and the guidance provided in the announcement of the regulations indicate that the Department has considered that there could be a few pathways to achieve the goals of informing and protecting the student. However, we see in this announcement that the Department does not believe that they themselves have a responsibility to inform and collaborate with the professional licensing community that does not typically operate and focus within higher education on educational requirements and processes.

Institutions will need to certify a path to licensure in each state it enrolls students.

This new regulation will require the institution to do more than is currently required in providing notifications. In order for the program to be approved for federal financial aid, the institution must certify that the distance education program or correspondence course meets designated certifying events in order to serve that student in the program.

1. Satisfy state educational requirements where the institution is located; and

2a Satisfy state educational requirements where the student is located at the initial time of enrollment; or

2b Satisfy educational requirements in the state where the student has provided an attestation that they intend to seek employment.

As previously explained, the Department is very clear that the currently effective notifications, while important, are not wholly sufficient to protect students in these programs. The additional responsibility to satisfy educational requirements is now placed upon the institution in order to serve students in other states.

Students can supply an attestation that they are in a state where they will not seek employment.
The Department has recognized that temporary circumstances could cause a student to be located in a state for which they do not intend to seek employment. This alternative to satisfying educational requirements where the student is located is provided within the final regulation. Implementation of this alternative will require additional documentation and interaction with the prospective student. The institution must develop a process to explain the circumstances and seek an attestation from the student designating the state they intend to seek employment if different from where the student is located. It is important to note that this alternative is placed within the language of the regulation which should be contrasted with the guidance about professional licensure reciprocity and compacts addressing portability of a license.

Interstate professional licensure reciprocity agreements or compacts are recognized.

Within the announcement, the Department recognized that some professions participate in licensing reciprocity and licensing compacts by referencing a public comment pointing to Teacher Preparation that maintains an interstate agreement/reciprocity-like structure through the National Association of State Directors of Teacher Education and Certification (NASDTEC) as well as the new Interstate Teacher Mobility Compact. Through guidance, which is not legally binding, the Department indicated these options would provide a means to obtain a license in other member states and therefore would be sufficient to satisfy applicable educational requirements. The Department indicated that this pathway to employment is not captured in the regulatory change because the Department indicates that these pathways are all forms of licensure.

In practice, this pathway would allow the student to first obtain the license from the state where the institution is located and then, if applicable, pursue the state license in the other state through state agreements or state compact if the states are members of these agreements. This option to consider post-licensure portability opens opportunities for students in more states.

However, it is important to recognize that not all professions/occupations have a licensing compact. For example, an interstate compact exists for Cosmetology, but a compact has not been developed for Athletic Training. Additionally, not all states are members of the compacts that do exist. For example, only 10 states are currently members of the Interstate Teacher Mobility compact. Institutions should be very cautious, research thoroughly, and document these opportunities to rely upon state agreements and compacts as the pathway to indicate satisfying education requirements in order to serve students in other states.

In summary…

The bottom line is that this new regulation underscores the current responsibility for the institutions found in the state authorization of distance education regulation and indicates that those institutions must:

• ensure that the institution has a clear process to identify the student at the initial time of enrollment,
• create a clear process to inform and document the use of the alternative attestation by students,
• complete necessary research to know which professions and which states an institution may utilize alternate pathways, such as state license agreements and licensing compacts. State-specific research and documentation remains very important when serving students in programs leading to a license.

Institutional Information (Public Notifications) – 34 CFR 668.43(a)(5)(v)

What do the final regulations say?

(v) If an educational program is designed to meet educational requirements for a specific professional license or certification that is required for employment in an occupation, or is advertised as meeting such requirements, a list of all States where the institution has determined, including as part of the institution’s obligation under § 668.14(b)(32), that the program does and does not meet such requirements; and

This subsection was not included in the proposed regulations, but some changes were made to the currently effective regulations in order to harmonize with the previous subsection.

(c)(1) If the institution has made a determination under paragraph (a)(5)(v) of this section that the program’s curriculum does not meet the State educational requirements for licensure or certification in the State in which a prospective student is located, or if the institution has not made a determination regarding whether the program’s curriculum meets the State educational requirements for licensure or certification, the institution must provide notice to that effect to the student prior to the student’s enrollment in the institution in accordance with § 668.14(b)(32).

(2) If the institution makes a determination under paragraph (a)(5)(v) of this section that a program’s curriculum does not meet the State educational requirements for licensure or certification in a State in which a student who is currently enrolled in such program is located, the institution must provide notice to that effect to the student within 14 calendar days of making such determination.

What questions and comments did WCET and SAN share with the Department during rulemaking, public comment period, and the Office of Management & Budget final review (EO 12866 Meeting)?

During Rulemaking.

As previously indicated in the public testimony, we shared concerns that the licensing community had not been included in these discussions. We pointed to the currently effective federal regulations that became effective July 1, 2020. We shared that at the time of the testimony the regulations had only been effective for a little more than 18 months and were made effective during the pandemic. We also pointed out that little time had been given to ascertain if the effective regulations were sufficient for student consumer protection.

Public Comment.

We shared with the Department that absolutely no analysis was provided in the proposed regulation announcement addressing the language amending the public notifications in 34 CFR 668.43(a)(5)(v). Neither did we find any new proposed language nor analysis to consider the harmonization of current individualized notifications in 34 CFR 668.43(c).

Two clarifying questions were posed specifically to address the proposed language amending the notification regulations:

1. Does the proposed language indicating an amendment to language for public notifications to be lists of all states where the institution “is aware” mean that the institution may not be ultimately addressing each state as is currently required in federal regulation 34 CFR 668.43(a)(5)(v)?
2. How does the Department intend to harmonize the proposed new language in the PPA identifying program eligibility to be “at initial time of enrollment” to the language in 34 CFR 668.43(c) indicating notifications to prospective students “prior to enrollment in the program” which could include prospective face-to-face students who will ultimately be located at the institution where the program meets state educational pre-requisites at time of initial enrollment?

Office of Management & Budget (OMB) final review (EO 12866 Meeting).

Specific to the notifications, we shared with the panel that notification regulations already exist as guardrails to protect students having become effective July 1, 2020. Additionally, neither the Department nor members of the negotiating committee offered any data that the current regulations were not sufficient to protect students in programs leading to a license or certification.

How did the Department respond to WCET and SAN’s questions in the preamble of the final regulations?

1. Regarding the term “is aware” of meeting or not meeting state educational requirements (pages 395-396). The Department agrees that the term “aware” was confusing and conflicts with language in the PPA. Therefore, the Department changed the term to “has determined.” Additionally, on page 389, the Department indicated if an institution is not enrolling students from a given state, it is not obligated to determine anything regarding that state. Further, it cannot only offer the program to students in that state.
2. Regarding harmonization of notification language with new PPA language (pages 395-396). The Department believes that the new PPA certification language complements the notification requirements but is making some alterations to the notification language to address areas of confusion.

What are the implications to the institution for implementation of the regulations?

The Department maintained the core structure of the notification regulations with some modifications from the currently effective regulations. Most obviously missing is the option to indicate no determination for the public notifications. The Department is focused on sharing information where the institution has determined that the program “does and does not meet such requirements.” This public notification is to address the institution’s obligation in the PPA as we previously discussed. If the institution cannot affirmatively meet state educational requirements, the institution cannot offer the program to the students in that state. This requirement remains essentially the same but eliminates the requirement to list the states for which the institution has not made a determination.

While the direct notifications were not part of the proposed regulations released last May, the Department was reminded through public comments that direct notifications needed to be harmonized with any changes to the public notifications.

• To prospective students prior to enrollment in the program if the program does not meet or no determination has been made as to whether the curriculum meets state educational requirements where the student is located.
• To the enrolled students where they are located if the curriculum does not meet state educational requirements. The notification must be provided within 14 calendar days of the institution making such a determination.

Notifications limited to distance education and correspondence students, not on-campus enrollees.

These direct notifications point specifically to obligations under the PPA addressing distance education programs by indicating in accordance with the PPA certification regulation. The requirements are essentially the same as those currently required, but seem to indicate that the notifications are only for distance education programs and correspondence courses. This appears to be a change: under currently effective regulations there is no reference to a specific modality. Absent a specific reference to a certain modality, there is a responsibility to notify all prospective students who intend to come to an institution, including those attending a face-to-face program. The obligation to notify a prospective student from another state planning to come to the campus to pursue the program face-to-face appears to be removed.

Notify student about where meet/not meet licensure requirements in their stateThe notification structure is primarily the same responsibility as the currently effective regulations to identify the programs and determine the states where the institution meets or does not meet state educational requirements. Depending on these determinations, there may be an obligation to provide a direct notification to a prospective or enrolled student. Again, the institution’s responsibility is to develop and implement a clear process to determine the location of the students, to continue pursuing state-specific research, and to provide documentation are the key elements when serving students in programs leading to a license.

Conclusions: What Institutions Should Do

Our early analysis of the new final regulations addressing programs leading to a license and state authorization leads to the following conclusions:

Certification by the institution to determine that the institution satisfies state educational requirements for programs leading to a license and related notifications, will be the work for the institution, and must include:

1. Review and revision of the institution process to determine the location of the student at time of initial enrollment as has been required since July 1, 2020.
2. Research of state educational requirements for a license as well as interactions with state licensing boards must continue.
3. Consideration, implementation, and documentation that the option to seek an attestation from students of their intention to pursue employment in a state that the institution must satisfy state educational requirements.
4. Research, analysis, and documentation to implement the Department’s view that state licensing agreements/reciprocity and licensing compacts may be considered as meeting state educational requirements if the states are members to these agreements or compacts.
5. Continuation of the institution’s process to implement public and direct notifications, and,
6. Finally, communication with senior administration and general counsel may be necessary to make business decisions about institution priorities to serve certain states and certain professions.

Next Steps

These conclusions come from our early analysis. We still have questions, and as we’re sure you still have some questions, SAN and WCET will be seeking your input on what we cover next. We maintain that in working together we will develop implementation strategies. SAN is already in process of reaching out to national associations for licensing boards to inform them of the final regulations. We will also collaborate with NASASPS and the SARA Community to ensure that applicable information is shared. Additionally, we urge you to follow the Federal Register announcement direction to seek more information from the Department staff member addressing this issue. For certification procedures: Vanessa Gomez. Telephone: (202) 987-0378. Email: Vanessa.Gomez@ed.gov .

Check out Part 2 of our analysis on these newly released regulations and look to SAN and WCET for more on these issues in the coming weeks!

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Get additional updates, summaries, and analysis of these issues and many more in our upcoming SAN and WCET member-only webcast: “Waze” to Find the Detours and Fast Lanes to Understand New U.S. Department of Education Guidance and Regulations.

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