• Michael Reis

Part 4 of Negotiated Rulemaking for Higher Education: Conversation-Starters for the Proposed Changes

This is the final installment in a 4-part series of blog posts covering some of proposed changes to the regulations that govern the Higher Education Act that resulted from the Department of Education’s most recent negotiated rulemaking process.

For an introduction to this series, check out the first blog post in this series.

To learn more about the proposed changes and the negotiated rulemaking process, please visit the revisions posted to the Federal Register or the Department of Education’s negotiated rulemaking website.


This final post will continue digging into the different ways the proposed rule revision affect the way accreditors operate. In this post, I’ll be looking at two specific changes. First, the new rules introduce a previously unused term “substantial compliance” as a possible outcome when the Department of Education evaluates an accreditors. Second, the proposed rules increase the maximum period of time a program or institution may be out of compliance before the accreditor is obligated to take adverse action.

To first change, the Department of Education evaluates accrediting agencies when they seek the department’s recognition. The Department evaluates whether or not the agency has complied with its policies and standards. Under the current rules, an agency is either full compliant or non-compliant. The proposed revisions would introduce a third potential outcome that the Department defines in the regulations as:


Substantial compliance means the agency demonstrated to the Department that it has the necessary policies, practices, and standards in place and generally adheres with fidelity to those policies, practices, and standards; or the agency has policies, practices, and standards in place that need minor modifications to reflect its generally compliant practice.

When an agency is determined to be substantially compliant, the Department permits the following:

iv) In the case of substantial compliance, grant initial recognition or renewed recognition and recommend a monitoring report with a set deadline to be reviewed by Department staff to ensure that corrective action is taken and full compliance is achieved or maintained (or for action by staff under § 602.33 if it is not); or

(v) Deny, limit, suspend, or terminate recognition;

(2) Grant or deny a request for expansion of scope; or

(3) Revise or affirm the scope of the agency.


Monitoring reports are a new approach. The Department suggests they are less burdensome than other forms of oversight and follow-up currently used. Although they may sound very similar to the compliance reports the Department currently uses, they differ in at least one key way: compliance reports are reviewed by representatives from the National Advisory Committee on Institutional Quality and Integrity (NACIQI); monitoring reports are reviewed instead by Department officials, who may choose to share them with NACIQI at the official's discretion.


Moving along to our second change, the proposed rules not only affect the compliance process to which accreditors must adhere but change the compliance process accreditors apply to the institutions they approve. Specifically, the maximum timeline for an accreditor may permit for institution to remedy its noncompliance has been extended.


Here’s the current rule:

Current Regulations: Section 602.20(a) provides that if an agency's review of an institution or program indicates that the institution or program is not in compliance with any standard, the agency must either immediately initiate adverse action against the institution or program, or require the institution or program to bring itself into compliance in no later than—

  • Twelve months, if the program, or the longest program offered by the institution, is less than a year in length;

  • Eighteen months, if the program, or the longest program offered by the institution, is at least a year, but less than two years, in length; or

  • Two years, if the program, or the longest program offered by the institution, is at least two years in length.

Under § 602.20(b), if the institution or program does not bring itself into compliance within the specified period, the agency must take immediate adverse action unless the agency extends the period for achieving compliance for good cause.


The proposed rules would establish two new periods of time; first, a period of time during which the accreditor may permit an institution to be non-compliant and second, a period of time during a plan to bring the institution into compliance is implemented.

Under the new rules, an accreditor could permit an institution to be out of compliance for up to three years before action is taken, with a provision to extend that period for good cause, such as a natural disaster. Under the current rules, there is no rule that allows accreditors to give an institution permission to be non-compliant.

In proposed § 602.18(d), we would establish that nothing in the recognition regulations prevents an agency from permitting an institution or program to remain out of compliance with policies, standards, and procedures otherwise required by those regulations, for a period of up to three years, and longer for good cause shown, where there are circumstances beyond the institution's or program's control requiring this forbearance.


The second change concerns the length of time an institution has to remedy non-compliance once the accreditor notifies the institution it is out of compliance. The new rules would double the maximum time from two years to four years.

We propose to allow the agency to include intermediate compliance checkpoints in the timeline as long as the agency provides notice to the institution concerning its compliance checkpoints. Additionally, the timeline must not exceed the lesser of four years, or 150 percent of the length of the program for a programmatic accrediting agency, or 150 percent of the length of the longest program for an institutional accrediting agency.

Now that you’ve got the context, here are some of the responses the Department received in response to its proposed changes.


Excerpt from the National Student’s Legal Defense Network’s comment: As an initial matter, the Department proposes in 34 C.F.R. § 602.3(b) to create a new standard of “substantial compliance.” This standard would apply to an accreditor that “has the necessary policies, practices, and standards in place and generally adheres with fidelity to those policies, practices, and standards; or the agency has policies, practices, and standards in place that need minor modifications to reflect its generally compliant practice.”22 If an agency is designated as being in “substantial compliance,” that agency would be allowed to maintain its recognition. Such a result, however, plainly exceeds the Department’s statutory authority, represents an unreasonable interpretation of the HEA, and lacks adequate justification. The HEA, by its terms, creates a binary status for recognized accrediting agencies because it requires the Secretary to find an agency out of compliance whenever the Secretary determines that an agency “has failed to apply effectively the criteria in this section, or is otherwise not in compliance with the requirements of this section.” Having found an agency out of compliance, the Secretary has two statutory options: (1) “limit, suspend, or terminate the recognition of the agency,” after notice and opportunity for a hearing, or (2) “require the agency . . . to take appropriate action to bring the agency . . . into compliance” within twelve months. The Department’s proposal to add a third category of recognized agencies that are in “substantial compliance” contemplates something other than what the statute requires. The proposal is, therefore, contrary to law within the meaning of section of the APA. In addition to violating the HEA, the Department’s proposal to add “substantial compliance” to 34 C.F.R. § 602.3(b) lacks good reason. In the preamble, the Department argues that, “in 2010, the Department changed its compliance review process to an ‘all-or-nothing’ standard that finds an agency either to be fully compliant or fully noncompliant.” As explained above, that “all-or-nothing” standard is nothing new. In fact, it is required by statute. Moreover, the Department claims that adding a third category of “substantial compliance” is necessary because:
“[E]ven when there is a minor error or omission that could easily be corrected, the agency must be found out of compliance. This approach fails to differentiate between an agency that is guilty of negligent disregard for academic rigor and an agency that is using policy language that differs slightly from the Department’s regulations or is missing a document or signature.” Interestingly, the Department provides no data, studies, or empirical analysis to demonstrate that this concern is an actual problem faced by accreditors. Even if it were, the Department’s proposal is not the proper response. The HEA already provides the Department with flexibility within its binary framework, giving the Department discretion to fashion a required “appropriate action” to bring the accrediting agency into compliance within twelve months.27 And even that twelve-month window can be extended for “good cause.” Thus, the proper response, pursuant to the HEA, would be to require the agency to come into full compliance within twelve months, not create a new category of “substantial compliance.” There is no reasoned basis for the approach proposed by the Department. (Link to full letter from the National Student Legal Defense Network)

Excerpt from Student Veterans of America’s Comment: Student veterans face unique hardships when dealing with failing schools and school closures. For example, student veterans may lose access to housing benefits and can have difficulty transferring credits and completing academic programs with partially exhausted education benefits. The proposed rules fail to effectively address the circumstances leading to school closure and impacts of closure itself. As a result, student veterans attending these schools will continue to struggle with the hardships referenced above. The proposed rules grant failing schools a gift by increasing the time that they can be out of compliance with accreditation standards before facing repercussions. The new language allows schools to be out of compliance with standards for up to three years. In “circumstances beyond the institution’s or program’s control,” the period of non-compliance may be extended even further. During this time, schools continue to receive federal student aid. The proposed rules also eliminate accreditors’ obligation to take immediate “adverse action” against non-compliant schools or, alternatively, to prescribe specific timelines for them to become compliant. Instead, the new rules simply require the accreditor to give the school or program a “reasonable timeline for coming into compliance,” which could take up to four years. Under these rules, students would be exposed to all the risks associated with a school’s non-compliance for a period that could span the entirety of their enrollment. The new rule would also squander taxpayer dollars by allowing these schools to take more federal student aid through these extended periods of non-compliance, even when a school may be on track to close. (Link to full letter from Student Veterans of America)
Excerpt from New America’s comment: The Department proposes, in 34 CFR 602.3(b), to permit accreditors to retain recognition if they meet a newly proposed definition of “substantial compliance,” rather than requiring them to be compliant with all applicable standards. However, this proposed definition is inconsistent with the statute, and makes it virtually impossible for the Department to hold an accreditor accountable when it fails to perform. The Higher Education Act requires that the Secretary find an accreditor out of compliance if it “has failed to apply effectively the criteria in this section, or is otherwise not in compliance with the requirements of this section.” For agencies out of compliance, the Department may not take an action other than to limit, suspend, or terminate the agency’s recognition; or to require that the agency come into compliance within 12 months. Yet the Department’s proposed definition would create a third category, not contemplated by the statute, in which the agency either has the necessary policies but does not always apply them effectively or “with fidelity,” or in which the agency does not have appropriate standards in place but follows “generally compliant practice.” Such exceedingly squishy terms open the door to non-compliant agencies being permitted to skirt the legal requirement that they be compliant with laws and regulations; and makes it virtually impossible for the Department to ever take action against a poor-performing accrediting agency. ... The Department’s proposal would double the maximum timeframe for which a school may maintain accreditation while out of compliance, from two years to four years. That could mean an entire cohort of students enrolls, attends, and graduates from a school that failed to meet accreditor standards from the day they walked in the door to the day they crossed the stage for commencement. Meanwhile, taxpayers would have financed tens of thousands of dollars in the same subpar or non-compliant college education. The Department fails to provide evidence that the lesser of four years or 150 percent of the length of the longest program at the institution is an appropriate threshold--and not arbitrarily or capriciously selected. Moreover, the Department did not present evidence that the current regulations--which cap the timeline for enforcement of adverse actions at two years--is inadequate or inappropriate. The Department says that “current regulations do not allow adequate time for an institution to implement curricular or other changes to allow it to come into compliance with standards,” but does not explain why it is then applying this doubling of the timeline for taking adverse actions to all fields on non-compliance, and not solely the curricula criterion. (Link to full letter from New America)

Thanks so much for spending the week with CORAL unpacking some of the many changes that are proposed in the Department of Education’s forthcoming regulations. The next steps in the process will be for the Department to consider feedback and publish its finalized rules. Keep an eye on the process, as it may require your institution to change some of its processes and workflows.

I hope this series has been helpful in thinking through some of the questions you may need to answer. Given the breadth of the rule changes, this series was not comprehensive and I encourage you to check out the other changes. There are proposals that impact state authorization, shift key definitions, change current restrictions on Title IV funding, and alter the way institutions found to be bad actors are addressed, to name just a few. Thanks again for reading this series and please feel free to keep this conversation going in the comments!

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