These final rules build on the department’s ongoing efforts to address heavy student debt loads and offer enhanced safeguards for students and taxpayers, particularly in cases of sudden institutional closures that leave students unable to complete their programs.
Among the key changes, one provision mandates that colleges cannot withhold academic transcripts for course credits paid for with federal financial aid, adding a new condition to the Title IV program participation agreements between higher education institutions and the government. This is an enhanced version of the proposal released in May—institutions will now be prevented from withholding a student’s transcript for any term in which the student received federal financial aid and successfully cleared their financial balance for that term.
ACE supports ED in this effort: along with 21 other associations, the Council issued a joint statement last year urging institutions to review their existing transcript hold policies and consider how they might be revised to address inequities, improve educational access, and better serve their students.
Another provision narrows the language around state consumer protection laws that extend beyond those covered in the National Council for State Authorization Reciprocity Agreement. The draft proposal required institutions to meet state consumer protection laws related to closure, misrepresentation, and recruitment, but the final rules remove misrepresentation and recruitment from the list of standards.
Institutions will also need to ensure that their programs meet the state licensing requirements in the state where the institution is located, as well as the states where students initially enrolled. Institutions will no longer be able to meet the requirement by reporting where they cannot determine if certain state licensing requirements are met.
These new rules will go into effect on July 1, 2024. A summary of the full rule changes is available here.