Colleges to get new rules on student aid
Thursday, October 28, 2010
The Obama administration plans to announce Thursday new regulations for colleges that participate in federal student aid programs, an initiative that aims to reshape how admissions recruiters are paid, how course credits are defined and how career training programs are launched.
Summaries of the 13 regulations, under development for more than a year, were circulated Wednesday among lawmakers. The rules will take effect in July and amount to a significant expansion of federal oversight of higher education.
A much-debated 14th proposal would force for-profit colleges and others that offer non-degree vocational programs to meet new standards related to student debt to qualify for federal aid. Known as the "gainful employment" proposal, it is pending and expected to be resolved by early next year. For-profit colleges are lobbying heavily against the proposal.
The new package of rules "will help ensure that students are getting from schools what they pay for: solid preparation for a good job," Education Secretary Arne Duncan said in a statement. Education officials say rules are needed because the government provides tens of billions of dollars each year in grants and loans to college students.
Among the key provisions:
l Elimination of exceptions to a ban on incentive compensation for admissions recruiters based solely on their success in securing enrollment. Obama officials said those exceptions, which date to the George W. Bush administration, encouraged aggressive or misleading recruiting practices.
l A requirement for for-profit schools, and others that offer non-degree programs, to notify the government when they intend to launch a career-training program. In some cases, the government might ask schools to formally apply for approval of the programs. Obama officials said the provision would help them prevent abuses that might arise with the forthcoming "gainful employment" rule.
l A federal definition of a "credit hour" as a course unit that signifies one hour of class time and two hours of homework per week. The regulation gives schools leeway, officials said, to establish equivalent measurements and clarifies that the definition is not intended for academic purposes but only for verifying eligibility for financial aid.
Harris N. Miller, president of the Association of Private Sector Colleges and Universities, a group that represents the for-profit sector, said the provision on career-training programs appeared to respond to industry concerns. An earlier version, he said, had signaled a tougher federal stance on program approval. "It sounds like they're moving toward a more pragmatic approach," Miller said.
But Miller said the sector still has concerns about the incentive compensation rule, which he said "is going to create a lot of uncertainty and potential litigation."
(The Washington Post Co. operates for-profit colleges through its Kaplan subsidiary and owns more than 8 percent of stock in Corinthian Colleges Inc., based in Santa Ana., Calif.)
The credit-hour issue drew concerns from the American Council on Education, which represents college and university presidents.
"It sounds like they are going ahead with their plan to federalize the definition of a credit hour," said Terry W. Hartle, a senior vice president of the council, although he cautioned that he had not yet read the fine print. "I don't think any industry is improved by increasing federal control over it."
Sen. Tom Harkin (D-Iowa), chairman of the Committee on Health, Education, Labor and Pensions, praised the stronger incentive compensation rules. He called the rules "an important first step toward protecting the billions of taxpayer dollars invested in for-profit colleges."
Rep. John Kline (Minn.), the top Republican on the House Education and Labor Committee, voiced concerns about increased federal scrutiny of new vocational programs. He said he wanted to ensure that regulations would not be "inhibiting to schools that want to be nimble and provide the kind of education and training we need."