Terry Hartle and Dan Madzelan are, respectively, senior vice president and associate vice president at the American Council on Education, which represents college and university presidents. 

Employing obsolete standards makes no more sense in higher education policy than it does in oenology. Even the Bible notes, to paraphrase, that it’s a bad idea to put new wine in old bottles because it will it spoil the wine.

But that is precisely what the Department of Education’s inspector general did last week when it found Western Governor’s University in violation of an obsolete federal standard for evaluating higher education practices with respect to distance education. The inspector general recommended that the Education Department move to reclaim $713 million in federal student financial aid from Western Governor’s, one of this country’s most respected online universities, because, in the inspector general’s view, the students were never really eligible for the money in the first place.

But just as Western Governor’s is a “new wine,” it and similar education programs ought to be measured against new regulatory standards.

It helps to understand the history behind all of this.

In 1992, the federal student loan program was in big trouble. Student loan defaults had climbed steadily over the previous five years and nearly a quarter of all loans ended in default. Extensive hearings conducted by the Senate Permanent Subcommittee on Investigations made clear the student loan program was not being carefully watched by the Education Department and that too many students had been victimized by schools more interested in cashing student loan checks than in providing a high quality education.

Congress had already begun trying to deal with the problem. In 1990, Congress made schools with consistently high default rates ineligible to participate in the federal student loan program. Congress even gave the Education Department emergency power to close any school immediately if the agency believed that students and taxpayers were at risk. Strong action was the order of the day.

But as work on the Higher Education Amendments of 1992 got underway, the default rates remained too high and it was clear that additional steps were necessary. Without such action, the staff working on the reauthorization feared that the federal student loan program would not survive. So the 1992 law featured a series of tough measures that imposed even more mandates and requirements on schools. And they worked. The student loan default rate dropped steadily for the next 15 years in a row.

One particular aspect of the student loan default problem caught congressional attention. According to a report prepared by the U.S. Government Accountability Office in 1992, “correspondence schools” had default rates that averaged over 40 percent, roughly twice the average default rate for all other schools.

Correspondence schools were a uniquely American set of educational institutions that were once commonplace. Originally made possible by the Pony Express in the mid-19th century, these schools allowed students in rural locations and small towns to take courses using the post office. Everything from lessons to exams moved back and forth via the U.S. mail. At one point, these institutions were commonly known as “matchbook schools” because they often advertised for students on the inside covers of matchbooks.

How to make these schools ineligible for federal student loans proved somewhat complicated because there was no federal definition of correspondence schools and Congress could not devise one. So Congress ultimately did it indirectly by mandating that to be eligible for federal student aid, institutions of higher education had to show there was “regular and substantive interaction” between teachers and students. Correspondence schools clearly did not meet that standard.

But just as the once-ubiquitous matchbooks have disappeared, so have correspondence schools. The Internet provided a much faster and more effective way to offer distance education.

But the language requiring “regular and substantive interaction” remains in the Higher Education Act.

Which brings us to back to Western Governor’s. This institution was established as a fully online school in 1997 by 19 Western governors (hence the name). It currently has nearly 84,000 students, most of whom are older than traditional students and working while they go to school. Its postgraduate earnings are above average and its student loan default rate is lower than average. An extensive intervention by Western Governor’s has reduced student loan borrowing by students five years in a row, even as the school’s enrollment has climbed. Western Governor’s is in good standing with its regional accreditor. And it keeps the customers satisfied: A Gallup survey revealed that 73 percent of all alumni said the school was “worth the cost” and a further 73 percent agreed they were “extremely likely” to recommend their alma mater to family and friends.

So what we have is a school that is working well by most available indicators.

What could possibly go wrong?

Well, the inspector general examined Western Governor’s using the “regular and substantive” yardstick. Perhaps not surprisingly, this did not inure to the university’s benefit.

This is nuts: Applying a 20th century standard to a 21st century educational institution doesn’t work. Using an obsolete definition to evaluate modern-day learning modalities serves no one well. Doing so only reinforces the view that online learning is less rigorous or easier than campus based education.

Indeed, the inspector general’s report was released the same day that the Times Higher Education published a story[timeshighereducation.com] about research published in the Journal of Higher Education Policy and Management. Based on a survey of 2,000 Australian academics, John Kenny and Andrew Fluck concluded that it takes longer to prepare a lecture for online students than for on-campus delivery, more time to prepare a new course for online students, and to review or update teaching materials for online courses. Most notably, the survey concluded that “student consultation and assessment moderation” was more time consuming than campus based education.

Aside from the potentially ruinous financial impact on Western Governor’s, this ruling, if upheld, threatens a wide array of distance education initiatives, including blended, hybrid learning and competency based education at a large number of institutions — public, private nonprofit and for-profit.

This means that what happens next is critically important. The inspector general’s report now goes to the secretary of education, who can accept, reject or ignore it. The Education Department should promptly and completely reject these baseless findings.

At the end of the day, Congress needs to step in and eliminate the “regular and substantive” language in the Higher Education Act and replace it with a more meaningful standard. Today, it’s an antiquated, unnecessary and harmful way to define quality education.

Until we have that, we might as well pound round pegs into square holes. Even if we succeed, it’s a fairly pointless way to proceed. But until Congress acts — which, of course, could be a very long time — the Education Department should immediately and decisively reject the inspector general’s report.