The Department of Education
(ED) announced
last week that Californians enrolled in online programs at nonprofit colleges
and universities located outside the state, both public and private, became ineligible
for federal financial aid following a court decision in May. The move
has the potential to impact tens of thousands of California students and
institutions across the country.
ACE Senior Vice President Terry Hartle sent
a letter July 25 to Secretary of Education Betsy DeVos outlining possible
courses of action and affirming that ACE is eager to work with the department on
a solution. As he notes, the department’s notice comes roughly one month from
the start of the traditional academic year, which makes a quick resolution
critical.
Beyond students losing
eligibility for Title IV aid going forward, it appears the federal financial
aid disbursed to these students from May 26 onward is retroactively considered
to have been improperly awarded. It is unclear at this time exactly how the
department intends to address this issue.
Background: Last year, the Trump administration delayed
implementing the Obama administration’s 2016 state authorization regulation to
2020, as they worked on developing a new version. A new rule was agreed upon
this spring by a negotiated rulemaking committee as part of a package of
accreditation regulations. This regulation is not yet in effect.
Following a lawsuit by the National Education Association challenging ED’s
delay, Judge Laurel Beeler of the U.S. District Court for the Northern District
of California ruled
in April against the department and ordered it to immediately implement the
2016 rule. The rule links financial aid eligibility to individual states having
either 1) a process for online students to submit complaints about their
institutions to a state agency in the state where they live, or 2) a
reciprocity agreement with other states addressing avenues for consumer
complaints, such as the National
Council for State Authorization Reciprocity Agreements (NC-SARA).
California has not had such a
process in place for out-of-state nonprofit institutions. It also is the only
state that is not participating in NC-SARA, which would relieve it of the
responsibility of having its own complaint process. Inside Higher Ed reported
this afternoon that officials in California believe they have solved
the problem by activating a new process through which such students can
submit complaints about their out-of-state online providers. But the IHE
story said ED officials could not confirm whether the state's changes
would resolve the situation.
Under the guidance
ED issued July 22, the department noted that the new regulations it will soon
publish would solve the problem, because that version would not require states
to have a complaint process. However, until then, California residents enrolled
in online programs at institutions outside California are ineligible for Title
IV programs.
In addition to the possibility of California moving to establish a complaint
process, there are two other possible solutions. The Trump administration can
finalize and issue the new state authorization regulations, or it can file an
appeal with the U.S. Court of Appeals for the Ninth Circuit Court requesting
the district court judge’s order in the case National Education
Association v. Betsy DeVos be stayed because of the immediate harm to
students.
Hartle urged the department to immediately
pursue both courses of action.