Government Affairs Updates

January 2017

UPCEA Joins 46 Other Associations on Letter to Secretary of Homeland Security John Kelly On Immigration Executive Order

UPCEA and 46 other higher education associations sent a letter to Secretary of Homeland Security John F. Kelly on maintaining the United States as the destination of choice for the world’s best students, faculty and scholars. The letter was written in response to President Donald J. Trump’s executive order, “Protecting the Nation From Foreign Terrorist Entry into the United States.”

The letter notes that the roughly one million international students that attend U.S. colleges and universities add to this country’s intellectual and cultural vibrancy, and they also yield an estimated economic impact of $32.8 billion and support 400,000 U.S. jobs, according to recent estimates. It adds that international students, faculty and scholars have served America well throughout the nation’s history and enrich campuses and the country with their talents and skills.

However, the letter also notes that steps intended to protect national security may inadvertently hamper these exchanges, potentially depriving the country of one of its best tools for global scientific and economic preeminence and extending democratic values and cultural understanding throughout the world.

Click here to read the full letter.

December 2016

Department Announces Final Rule on State Authorization

On December 19th, the U.S. Department of Education released final regulations to improve oversight and protect more than 5.5 million distance education students at degree-granting institutions including nearly 3 million exclusively online students by clarifying the state authorization requirements for postsecondary distance education. To ensure that institutions offering distance education are legally authorized and monitored by states, as required by the Higher Education Act, the final regulations clarify state authorization requirements for institutions to participate in the Department’s federal student aid programs. The regulations also address state and federal oversight of American colleges operating in foreign locations worldwide.

The new regulations will not take effect until July 1, 2018. Given this timeframe, many in the higher education policy community believe the rule will be undone by the incoming administration. 

For more information from the Department on these regulations, click here. For a final copy of the regulations, click here.

October 2016

Department Publishes Borrower Defense to Repayment Regulations

On November 1, 2016, the U.S. Department of Education announced final regulations to protect student borrowers against misleading and predatory practices by postsecondary institutions and clarify a process for loan forgiveness in cases of institutional misconduct. According to the Department: 
The final regulations include key provisions from the proposed regulations that will protect the rights of borrowers and hold institutions accountable by:
  • Giving borrowers access to consistent, clear, fair, and transparent processes to file claims;
  • Empowering the Secretary to provide debt relief to borrowers without requiring individual applications in instances of widespread misrepresentations;
  • Protecting taxpayers by ensuring that financially troubled institutions provide the government with protection against the risks they create and that institutions whose actions lead to discharges of Federal student loans are held responsible;
  • Helping students make more informed decisions by requiring proprietary schools with poor loan repayment outcomes to include a plain-language warning in their advertising and promotional materials;
  • Ensuring affected borrowers have information about loan discharge when schools close and access to an automated process; and
  • Banning schools from inducing students to sign pre-dispute arbitration agreements that waive their rights to go to court and bring class action lawsuits based on borrower defense claims.
For more information from the Department of Education, click here. For a final copy of the regulations, click here.
 

August 2016

UPCEA Joins Multiple Distance Ed Orgs to Offer State Authorization Comments

UPCEA co-signed, with a coalition of other organizations with a direct interest in distance education, a letter commenting on the Department of Education’s proposed regulations on state authorization. UPCEA joined along with five other non-profit organizations garnering a collective total of more than 1,000 institutions innovating in offering distance education, the leading organization in higher education information technology (more than 2,000 institutions), the national organization of financial aid professionals (approximately 3,000 institutions), and one of the premier providers of educational technologies and services. Beyond institutions, our memberships include other non-profit organizations, state agencies, accreditors, and corporations. All of the partners are interested in the development and delivery of high-quality distance education programs. Our collective advocacy shows how important this issue is to us, our members, and other organizations involved in distance education.

Click here to view the letter submitted to the Department of Education.

Submit Your State Authorization Comments with UPCEA's Template
UPCEA has provided comments to the Department of Education for their recent proposed regulations on State Authorization, particularly as it applies to distance education. We are providing a format of these comments in a template for our members to easily provide their own response, with our included recommendations. Tell the Department who you are, and why these regulations will negatively affect you, your program, and your students. We encourage you to make this letter personal. This form should not be utilized as your institution’s comments on the issue, but we certainly want our members to share this with their own institution’s government affairs team, and encourage them to submit similar comments. Act now, the comment period ends Wednesday, August 24th.

Click here to download the comment template.

Please submit your comments here

July 2016

Department of Education Releases Proposed Rules on State Authorization

The Department of Education released Friday July 22 their proposed regulations on State Authorization, following an earlier failure to reach consensus as part of negotiated rule making. State authorization for distance education -- the proposed regulation for institutions administering a program in which a distance or online education student is present in another state. The administration has proposed that institutions must verify that they have been authorized to operate in any state (and potentially, foreign governments) in which their distance education students may be taking a course or study. The rule has always applied to institutions' presence in a state which they are physically located, these proposed regulations try to determine how the institution must be authorized when their students are located in a state in which the institution does not have a physical presence. The administration's proposed regulations contain widened compliance requirements for institutions.

The Department of Education is allowing a 30-day public comment period, ending August 24th. We encourage your institution to submit comments at www.regulations.gov


For more information on the Department's regulations, click here.

For the full text of the regulations, click here
 

June 2016

ED Issues Proposed Rules on Borrower Defense to Repayment

The Department of Education has released proposed regulations on Borrower Defense to Repayment, a mechanism which would allow any student who believe they were defrauded at their school or the school violated state law, to file a claim with the Department of Education for discharging their loans. These proposed rules have come from the Department due to a failure earlier this year of Negotiated Rulemaking on the topic.

Focus on this rule has been brought about due to fallout from Corinthian Colleges, however it should be known that these regulations apply equally to both for-profit and not for profit institutions:
In response to the collapse of Corinthian Colleges (Corinthian) and the flood of borrower defense claims submitted by Corinthian students stemming from the school's misconduct, the Secretary announced in June 2015 that the Department would develop new regulations to establish a more accessible and consistent borrower defense standard and clarify and streamline the borrower defense process to protect borrowers and improve the Department's ability to hold schools accountable for actions and omissions that result in loan discharges.

Consistent with the Secretary's commitment, we propose regulations that would specify the conditions and processes under which a borrower may assert a defense to repayment of a Direct Loan, also referred to as a “borrower defense,” based on a new Federal standard. The current standard allows borrowers to assert a borrower defense if a cause of action would have arisen under applicable state law. In contrast, the new Federal standard would allow a borrower to assert a borrower defense on the basis of a substantial misrepresentation, a breach of contract, or a favorable, nondefault contested judgment against the school for its act or omission relating to the making of the borrower's Direct Loan or the provision of educational services for which the loan was provided. The new standard would apply to loans made after the effective date of the proposed regulations. The proposed regulations would establish a process for borrowers to assert a borrower defense that would be implemented both for claims that fall under the existing standard and for later claims that fall under the new, proposed standard. In addition, the proposed regulations would establish the conditions or events upon which an institution is or may be required to provide to the Department financial protection, such as a letter of credit, to help protect students, the Federal government, and taxpayers against potential institutional liabilities.

Comments on the proposed rules are being accepted through August 1st, 2016.  UPCEA encourages our member institutions to weigh in and make their voices heard. Please submit your comments here.

For more information on Borrower Defense to Repayment, click here

December 2015

ED Issues New Incentive Compensation Guidance
From Cooley LLP, The Authority for Legal Issues in Online Education

Compensation based on student completions now permissible, while compensation based on diversity recruitment still not allowed
At the end of November, the US Department of Education ("ED") issued important new guidance regarding its incentive compensation regulations, which ED says "clarifies and provides additional information" about part of the rules.1 The new guidance makes two key points: (1) ED has reversed its prior position under its 2010 regulations and announced that compensating employees based on students who complete their educational programs is no longer a prohibited practice, and (2) ED confirmed its earlier guidance that compensating employees for success in enrolling minority students is still not permitted.

ED issued this new guidance in response to the continuing lawsuits filed by the Association of Private Sector Colleges and Universities ("APSCU") challenging various aspects of the "Program Integrity" regulations ED issued in October 2010, of which incentive compensation was one part.

Click here to learn more.

 


November 2015


ED Adopts Changes To Clock And Credit Hour Rules
From Cooley LLP, The Authority for Legal Issues in Online Education

Earlier this month, the US Department of Education ("ED" or the "Department") announced a number of changes to the so-called "cash management" regulations that govern institutional arrangements with financial account providers and will take effect on July 1, 2016. Embedded within the announcement and publication of revised final rules was an amendment that has gotten little public attention despite significant Title IV implications. Specifically, the announcement confirmed that the Department has abandoned a controversial and confusing element of the clock and credit hour rules at 34 C.F.R. § 668.8 that was first adopted as part of the 2010 Program Integrity regulatory package and went into effect on July 1, 2011.

The Department's 2010 rule changes created a new definition of credit hour for certain programs, revised the requirements for other programs subject to a prior definition, and created a third category of programs that must award federal financial aid on a clock-hour basis regardless of state and accreditor approval in credit hours.

Click here to learn more.


FTC Focuses On Lead Generation Practices In Higher Education And Ed Tech?
From Cooley LLP, The Authority for Legal Issues in Online Education

On Friday, October 30, 2015, the Federal Trade Commission conducted a workshop in Washington, DC on lead generation practices, with a specific consumer protection focus on activities in the higher education sector including ed tech companies. The agency's day-long event emphasized that the FTC is keeping an increasingly close eye on the lead generation industry, which has already drawn scrutiny under the FTC's investigational authority, and this review may ultimately impact the marketing practices of traditional and next-generation educational institutions, including both for-profit and non-profit colleges and universities.

Click here to learn more.

 


October 2015


Pending Rulemaking Likely To Expand Borrower Defenses Against Repaying Federal Direct Loans?
From Cooley LLP, The Authority for Legal Issues in Online Education

 

The US Department of Education (ED) is preparing for a new rulemaking that is intended to clarify—and very likely expand—the ability of student borrowers to be relieved of the obligation to repay their Federal Direct Loans. ED, which in August issued a notice of its intention to proceed with the rulemaking and announcing two public hearings on the subject,announced last week that it is accepting nominations for negotiators, and will soon outline plans and agenda items for the negotiated rulemaking. The first session of the negotiated rulemaking process will be January 14-16, 2016, with additional sessions in February and March 2016, to allow ED to issue a final regulation by the November 2016 deadline for compliance with ED's rulemaking calendar.
The regulation would interpret the venerable but, until very recently, little-used "Borrower Defense to Repayment" provisionin the Higher Education Act and the minimal ED regulations that have long been on the books. While in the past only a handful of borrowers ever sought relief under this provision, the collapse of Corinthian Colleges coupled with the aggressive efforts of advocacy groups have encouraged a rapidly increasing number of former Corinthian students to seek relief from repayment of many millions—possibly billions—of dollars of loans.

Click here to learn more.



New Proposal Offers Limited Access To Federal Student Aid For Alternative Providers??
From Cooley LLP, The Authority for Legal Issues in Online Education

On October 15, 2015, the US Department of Education ("ED") issued a long-awaited notice announcing an "Experimental Sites Initiative" ("ESI") to permit limited access to federal loan and grant programs for students enrolled in certain kinds of short, non-institutional educational programs.

New providers that are not part of "traditional" institutions of higher education, such as those offering coding "boot camps," MOOCs, and other short-term programs, are increasingly attractive to policymakers and learners alike as a way to earn marketable credentials more quickly and at less cost. The idea of providing aid for students enrolled in these programs gained momentum earlier this year after Senator Lamar Alexander, Chairman of the Senate HELP Committee, which is working on the reauthorization of the Higher Education Act, solicited ideas on how best to enable access to federal funds for such programs. Following on that opening, this summer the White House hosted an informal summit on the topic and just recently Senators Rubio and Bennet offered a legislative proposal that would substantially widen provider eligibility for participation in the Title IV programs. ED's newly announced pilot program is further evidence of the seriousness with which these kinds of programs are now taken—as well as the continuing concern over protecting federal grants and loans from abuse.

Click here to learn more. 



Safe Harbor Ripples Affect EU Student Data At US Schools?
From Cooley LLP, The Authority for Legal Issues in Online Education

October 22, 2015 - Last week Europe's highest court, the Court of Justice of the European Union (CJEU) declared invalid a "Safe Harbor" framework whereby personal data could be easily transferred between many European countries and the US. The US-EU Safe Harbor Principles were developed in consultation with the EU, the European Commission, and the US Department of Commerce to allow for the efficient transfer of personally identifiable data from the EU to the US in a way that complied with the EU Data Protection Directive (Directive 95/46/EC). Entities could opt-in to Safe Harbor by agreeing, among other things, to comply with a set of privacy principles. The opt-in must be recertified annually, but participants had significant flexibility to assess compliance internally or through an independent party. Safe Harbor was the subject of criticism and skepticism since its inception due to concerns regarding its sufficiency to meet EU data privacy standards. 

Click here to learn more. 




Further Refinement To Accreditation In Higher Education?
From Cooley LLP, The Authority for Legal Issues in Online Education

Reacting to ongoing concerns and complaints expressed by members of Congress and others, the accrediting community has been very busy introducing new policies and procedures and refining their respective processes in preparation for the looming reauthorization of the Higher Education Act. In previous alerts we explored important changes by the WASC Senior College and University Commission and the Distance Education Accrediting Commission (DEAC) that clarified policies on collaboration with "enablers" and other non-accredited entities, and by WASC that provided a pathway for the incubation of new institutions within the structure of already-accredited schools. Now the Middle States Commission on Higher Education (MSCHE) has weighed in with both new standards and further proposed changes to its processes.

Click here to learn more. 



ED Guidance On Competency-Based Education: Barriers To Adoption Remain
From Cooley LLP, The Authority for Legal Issues in Online Education

Institutions that are in the process of developing competency-based education ("CBE") programs now have a clearer window to the US Department of Education's perspective on how federal student financial aid rules can accommodate this alternative educational delivery methodology—and what institutions must do to demonstrate and maintain compliance.

Months after its anticipated release date, the Department has published a collection of CBE guidance documents including one it has named the Competency-Based Education Reference Guide. Although the guidance is geared toward institutions already participating in one of the Department's CBE-related Experimental Sites, it is accompanied by expanded commentary on CBE published in the new 2015-2016 Federal Student Aid Handbook. While the new guidance represents an important step in the Administration's efforts to minimize some of the barriers to CBE within the existing federal student aid system, it is notable what is not changed: despite a number of waivers and modifications that chip away at the barriers to the widespread adoption of CBE, such programs remain tethered to the time-based limitations of clock- and credit-hours. Significantly, the guidance does not fundamentally alter the federal student financial aid system that is built around the clock time and credit hours—both of which are fundamentally time-based rather than competency-based measures of student learning.

Click here to learn more. 


August 2015

UPCEA and the Online Learning Consortium (OLC) issue a joint letter to Congressional leaders regarding the integrity of online learning.

UPCEA and OLC penned the following letter and sent it to the congressional leadership of the House Committee on Education and Workforce as well as the Senate Committee on Health, Education, Labor and Pensions in response to recent public statements which appear to question the integrity of online education. We believe that these recent statements reflect a very serious misconception about online education, its importance to millions of Americans and its role in achieving the universally sought goals of making quality higher education accessible, better and less costly to the learner and the public alike. As our representatives prepare for reauthorization of the Higher Education Act of 1965 (HEA), we have sent this letter to provide the facts about online education and its critical significance for contemporary learners.  

Click here to view the letter. 


May 2015

Student Data Privacy: The States Take the Lead

Student privacy has become a focal point in the education sector. While media attention has largely focused on activities in Washington, we believe it is also critical for schools and Ed Tech companies to pay closer attention to privacy and security actions at the state level.

While gridlock may continue to be the story in Washington, this is not the case in state legislatures. In 2014, 110 student privacy bills were introduced in 36 states and 21 states enacted student data privacy laws. In the first three months, 2015 has seen more privacy bills introduced than all of 2014. Already 138 bills have been introduced in 39 states. Some laws, including the landmark California law, SOPPIPA, apply only to those in the K-12 space while other laws also apply to entities in the postsecondary space. The laws that have been enacted have their unique aspects; however, a few general themes have appeared. The laws tend to break down into three categories: (1) Security; (2) Transparency; and (3) Use.

While the debate in Congress will continue to play a significant role in the national dialogue on student data privacy, the more concrete impact in the near term is likely to be at the state level. The laws in this area are changing rapidly and staying on top of the requirements will be critical to long term success in the educational space.

To read our full memorandum from Cooley LLP, click here

Cooley LLP--UPCEA’s Authority for Legal Issues in Online Learning.


April 2015

April 3 - U.S. Senator Lamar Alexander (R-Tenn.), chairman of the Senate education committee, last week released three staff white papers and asked for feedback on three issues related to reauthorization of the Higher Education Act: accreditation, risk sharing, and the collection of consumer information.
 
Alexander said: “As the committee continues its work to reauthorize the Higher Education Act this year, I am asking the higher education community—including students, parents and others interested in our colleges and universities—to tell us their thoughts on three important issues: how to improve our accreditation system, how to give colleges some ‘skin in the game’ as one way to discourage student over borrowing and excessive student debt, and how to make sure that data being collected to help students and their families be better consumers is useful, clear, and concise. All of these comments will be considered during the bipartisan reauthorization process that Sen. Murray and I will be developing."  
 
Alexander released the following three staff white papers:
 
1. Higher Education Accreditation: Concepts and Proposals 
2. Risk Sharing: Concepts and Proposals 
3. Consumer Information: Concepts and Proposals 
 
He requested input on the topics to inform the committee’s HEA reauthorization process. Comments should be sent to the following corresponding email addresses no later than 5:00 pm on Friday, April 24, 2015All comments will be shared with Ranking Member Patty Murray (D-Wash.) and all members of the Senate Health, Education, Labor and Pensions Committee.
 
1. accreditation@help.senate.gov
2. risksharing@help.senate.gov
3. consumerinformation@help.senate.gov
 
To provide comments for UPCEA to consider in an association-led letter, contact Jordan DiMaggio at jdimaggio@upcea.edu by April 17 at 5PM. 


February 2015 - #2

Innovators in online education are hardly strangers to the legal uncertainty that often accompanies efforts to interpret and apply old laws to new realities. This policy brief discusses one such area: legal obligations to online students under the federal statutory provision referred to as “Title IX,” which prohibits discrimination on the basis of sex in most educational programs and activities that receive federal funds.

Since Title IX was adopted in 1972, federal agencies have developed regulations and policy guidance that are both copious and far-reaching. In addition, recent incidents of sexual assault at many high-profile institutions have moved Title IX compliance into the national spotlight. Institutions that fail to comply with Title IX may face federal agency compliance reviews as well as individual lawsuits from victims and alleged offenders, both of which can be costly and may result in reputational damage.

Does Title IX apply to the online education programs that you offer? Most likely, the answer is, “yes.”

To help UPCEA members navigate this area, the following is an overview of Title IX requirements as well as threshold issues that education providers should consider in crafting policies to address sexual harassment in online offerings.

Click here to read the brief from Cooley LLP--UPCEA’s Authority for Legal Issues in Online Learning.


February 2015 - #1

For the second time, UPCEA along with WCET and The Online Learning Consortium joined with one voice to comment on regulations proposed by the U.S. Department of Education. Our comments focus on the distance education components of the Department's proposed system for States to assure teacher preparation program accountability.

In addition to colleges located within their own borders, the regulations clarify that States are to report on performance of "distance learning programs that are being provided in the State." We are concerned that the meaning and impact of the inclusion of distance education was not understood by the Department in issuing the proposed regulations.

Based on review of public comments on the proposal, we are unaware of anyone else addressing the specific impact on distance education programs and their students. Therefore, our comments will focus mainly on the distance education issues that would arise from these new Teacher Preparation regulations.

To view our full letter to Secretary Duncan, click here.


December 2014

From our Industry Partner, Cooley LLP:

The Department of Education announced that it is seeking comments on new data collection and validation procedures for the reporting the use of "third-party servicers." The comment period ends January 7th.

For the purposes of the Federal Student Aid ("FSA") programs, finding whether an entity providing services is deemed a "third-party servicer" has been a source of confusion for institutions. This confusion has been compounded by the increased use of online "enablers" providing bundled services to institutions, which generally do not include financial aid services. Third-party servicers are required by the Department of Education to comply with all applicable FSA regulatory provisions and submit annual reports. In addition, the third-party servicers can be held liable with the institution for any FSA-related violations alleged to be related to services provided by the third-party servicer. For more information on determining whether an entity is a third-party servicer and the consequences for not reporting third-party servicers, click here.


November 2014

UPCEA co-signs letter with American Council on Education to oppose use of Pell Grant funding for other purposes in the FY2015 Appropriations budget. Click here to read the letter to the Senate Health, Education, Labor and Pensions Committee Leadership.


October 2014

The UPCEA Center for Online Leadership and Strategy is pleased to announce the 2014 UPCEA Federal Policy Brief. This document is a result of the 2014 UPCEA Online Leadership Roundtable and focuses broadly on online education policy at the federal level. Developed with direct input from membership and the UPCEA Policy Committee, these recommendations provide a framework for the federal government to address the needs of contemporary learners and those who serve them. Topics covered include State Authorization, financial aid, gainful employment, costs of compliance, and the importance of collecting meaningful data that reflect the fundamental demographic shift toward non-traditional-or "contemporary"-students. Click here to view the UPCEA Federal Policy Brief.

We encourage you to read it, and share it with others - including your institution's internal government affairs staff, and your members of Congress. Our elected representatives must understand the importance of these issues, and the impact that they have on the students we serve. You can find the contact information for your members of Congress here. We encourage you to contact your members and schedule a meeting to discuss these issues if you are in Washington. If you are interested in increased UPCEA advocacy efforts, please fill out this form

A very special thanks to Chris Murray and Ken Salomon at Thompson Coburn for their expertise in helping develop the UPCEA Federal Policy Brief. 


June 2014


State Authorization is the major policy issue that has generated a lot of attention from within the UPCEA community. The topic has become even more prominent in light of the recent negotiated rulemaking at the US Department of Education and the panel’s inability to reach consensus. Following this outcome, UPCEA partnered with WICHE Cooperative for Educational Technologies (WCET) and the Sloan-Consortium to develop a letter to state our shared concerns and recommendations as the Department of Education begins to write the final proposed regulations. Our organizations believe that the latest proposal put forward by the Department could cause confusion and financial strain for not only institutions as a whole, but for students as well. 

To view the letter to Secretary of Education, Arne Duncan, please click here.

We will have a greater impact if institutions express their opinions and we invite you to weigh in. You can do so now or use language from our letter. If you prefer, you can wait until the proposed regulations are published and submit reactions to specific language then. Or you can do both.

The Honorable Arne Duncan
Secretary of Education
Office of the Secretary
United States Department of Education
400 Maryland Avenue S.W., Room 7W301
Washington, DC 20202

We encourage you to let your opinion be known. 

UPCEA wishes to express our gratitude to Russ Poulin (WCET)  and Kathleen Ives (Sloan-C) for their work and leadership as well as their support in being co-sponsors of this letter.

 


April 2014
From Greg Ferenbach, with Cooley LLP, UPCEA Gold Industry Partner : 

State Authorization
In late March, the US Department of Education conducted a second round of negotiations on the proposed program integrity regulations, including its proposed regulations pertaining to state authorization of distance education. The Department’s state authorization proposal represents a dramatic departure from past practice and has the potential to cause all institutions involved with distance learning significant burden and expense. Unless significantly altered, we believe it could slow the growth of distance learning for years to come.

ED negotiators confirmed that their proposed distance education rule essentially creates a new, unfunded mandate for states to regulate distance education per federal requirements. Our initial analysis indicates that virtually all states and the District of Columbia would need to amend their laws or regulations to comply with the proposed rule. If a state fails to do so, students located in that state will not be able to use Title IV to pay for distance education programs provided by out-of-state institutions. While Department officials recognize that their changes will take time, there does not appear to be an appreciation for the magnitude of changes that would be required.

Note that after the legislative changes are completed, the proposal would significantly increase the burden on states to review applications from institutions that have no “physical presence” in their state and that are currently not subject to that state’s jurisdiction. For example, if the New York State Department of Education were required to regulate purely online programs, which it currently does not, without further staffing, a massive bottleneck would likely occur. But adding staff will be costly for states and would likely result in increased fees to institutions. Thus, absent reciprocity, the Department’s proposal would likely make the burden and expense of obtaining all necessary authorizations to provide distance education prohibitive, especially for smaller institutions.

The proposed federal rule endorses reciprocity, but the Department has not endorsed SARA  (State Authorization Reciprocity Agreement) specifically. For example, the federal negotiators identified one current problem with SARA in that the draft agreement currently designates the institution’s home state as the sole arbitrator of all student complaints against an institution. The proposed federal rule would require the student’s home state to also hear such complaints (a right that states would currently waive under SARA). While SARA can be amended to deal with this issue, the specter of federal intrusion may raise a red flag about proceeding with SARA until a final regulation is in place (likely by 2016).

State Authorization of Foreign Locations
The Department’s proposed rule on foreign locations would impose new burdens on schools with branch locations in foreign countries. The rule would add three conditions for an institution to be eligible for Title IV at foreign locations: (1) the institution must demonstrate that its home state has consented to any physical locations in foreign countries; (2) the institution must demonstrate that the foreign country has approved or registered the location in that country; and (3) the institution’s home state must appropriately act on complaints (based on the home state’s law) filed by students at the foreign location.

The foreign locations proposal would result in another unfunded mandate on states – some of which lack the jurisdictional authority (under state law) to apply their laws to activities in a foreign country or lack a process to approve foreign locations for private institutions—which will ultimately be borne by institutions.

Consensus Reached on Clock-to-Credit Hour Conversion and Retaking Coursework
The Committee reached consensus on two proposals: The first would remove the clock-hour treatment for programs that use clock hours for State or Federal purposes. The second would remove the prohibition on using Title IV funds to pay for one retake of a passed course. Both proposals were generally applauded by institutions.

What Should Institutions Do Now?
The next and final rulemaking session is scheduled for April 23-25th. Assuming consensus is not reached, the Department will proceed with standard notice and comment rulemaking and will likely release an official notice of proposed rulemaking sometime this summer. All interested institutions will have the ability to submit comments on the final proposal at that time.

Given the potential impact of the Department’s state authorization proposal, however, we are concerned that institutions that wait for the formal rulemaking process to submit comments will be unable to deter the Department from proceeding with a proposal that seems, at best, ill-considered and may have a major impact on their operations. We therefore recommend institutions consider writing to Secretary of Education Arne Duncan and to their Members of Congress to voice their concerns. Institutions may also want to bring this proposal to the attention of their respective trade associations, as well as appropriate state officials and state legislators. (Oddly enough, state regulators are not currently represented in the negotiations even though the Department’s proposal would impose significant new burdens upon them.)

Greg Ferenbach, Attorney, Cooley LLP