Archived Information

**July 2003**

SECOND REPORT TO CONGRESS

ON THE

DISTANCE EDUCATION DEMONSTRATION

PROGRAM

**U.S. Department of Education**

**Rod Paige**

*Secretary*

**Office of Postsecondary Education**

**Sally Stroup**

*Assistant Secretary*

**Policy, Planning and Innovation**

# Jeffrey R. Andrade

#### Deputy Assistant Secretary

This report is in the public domain. Authorization to reproduce it in
whole or in part is granted. While permission to reprint this
publication is not necessary, the citation should be: U.S. Department of
Education, Office of Postsecondary Education, Office of Policy, Planning
and Innovation, *Second Report to Congress on the Distance Education
Demonstration Program, July 2003,* Washington, D.C., 20006.

This report is available on the Department's Web site at:
[\<http://www.ed.gov/programs/disted/performance.html\>]{.underline}.

On request, this publication is available in alternative formats, such
as Braille, large print, audiotape, or computer diskette. For more
information, please contact the Department's Alternative Format Center
(202) 260-9895 or (202) 205-8113.

**SECOND REPORT TO CONGRESS**

**ON THE**

**DISTANCE EDUCATION DEMONSTRATION PROGRAM**

TABLE OF CONTENTS

[EXECUTIVE SUMMARY iii](#executive-summary)

[INTRODUCTION 1](#introduction)

[INCREASING ACCESS 3](#increasing-access)

[Distance Education Delivery Modes
3](#distance-education-delivery-modes)

[Programs and Enrollments 4](#programs-and-enrollments)

[Student Characteristics 6](#student-characteristics)

[STUDENT SUCCESS 8](#student-success)

[Course Completion 8](#course-completion)

[Program Retention and Completion 9](#program-retention-and-completion)

[STUDENT AID ISSUES 11](#student-aid-issues)

[Barriers to Increasing Course Start Dates
11](#barriers-to-increasing-course-start-dates)

[Defining a Program 13](#defining-a-program)

[Year Round Enrollment 13](#year-round-enrollment)

[Consortial Arrangements 14](#consortial-arrangements)

[Competency-based Models 15](#competency-based-models)

[Student-based Administration of Aid in Credit Programs
17](#student-based-administration-of-aid-in-credit-programs)

[CONCLUSIONS 19](#conclusions)

[Policy Perspectives 20](#policy-perspectives)

[APPENDIX -- Summary Information for Current Participants
22](#appendix-summary-information-for-current-participants-in-distance-education-programs)

# EXECUTIVE SUMMARY

This is the second report to Congress concerning the results of the
Distance Education Demonstration Program. The demonstration program was
authorized by Congress in the 1998 reauthorization of the Higher
Education Act of 1965 (HEA) to: test the quality and viability of
expanded distance education programs currently restricted under the HEA;
provide for increased student access to higher education through
distance education; and help determine the most effective means of
delivering quality education via distance education, the specific
statutory and regulatory requirements that should be altered to provide
greater access to distance education, and the appropriate level of HEA
Title IV student financial assistance for students enrolled in distance
education programs.

The Department initiated the demonstration program on July 1, 1999 with
15 participants (one of which was removed from the program in the first
year) and added nine additional participants in July 2002, as authorized
by the statute. Current participants include 17 individual institutions,
four systems, and two consortia, for a total of 107 institutions.
Participants were selected through a competitive process using statutory
criteria that included, among other things, the number and quality of
applications received and diversity with respect to institutional size,
mission, and geographic distribution. The distance education delivery
methods used by participants include correspondence study, two-way
interactive videoconferencing, videotapes, and the Internet. The use of
online instruction is increasing at a rapid rate at all participating
institutions to deliver certificate and full-degree programs as well as
individual courses that are available both to students studying at a
distance and on-campus. Almost all participants offer distance education
degree programs in business and computer/information science. Other
popular disciplines include liberal arts or general studies, health
professions and social sciences at the bachelor's degree level and
education, engineering and psychology at the graduate level.

Sixteen participants received waivers of the three provisions that
relate to the amount of correspondence education an institution eligible
for the Title IV student financial assistance programs may provide (the
"50% rules"). Seven are currently using these waivers to continue to
participate in the Federal student aid programs. Fourteen participants
received waivers for provisions relating to the required length of a
program and definition of a week of instruction (the "12-hour
rule").[^1] Seven received waivers of the definition of a full-time
student as it relates to correspondence study, and three received
waivers of the requirements relating to satisfactory academic progress.
Western Governors University received additional waivers, as provided in
the authorizing statute, because of its unique structure.

Both the number of distance education programs provided by participants
and enrollments in these programs increased during 2000-01. The number
of students enrolled in distance education programs offered by the
initial cohort of participants has more than doubled since the 1998-99
academic year, from just under 13,000 to over 27,000. There has been
considerable growth as well in the number of onsite students who are
taking distance education courses. This total increased from 19,000 to
over 42,000 in the same three-year period. Participants report
significant progress in meeting individual goals related to increasing
access to their programs and services by underserved populations.

Comparative data on persistence and completion for cohorts of students
who are enrolled in distance education and onsite programs, and those
taking a mix of distance education and onsite courses, indicate that the
greatest success is experienced by the latter group at all degree
levels.[^2] These early findings for distance education and onsite
programs differ depending upon degree level. At the graduate degree
level, there is a tendency for retention to be higher for distance
education than onsite programs, while at the lower degree levels this
tendency is reversed. However, the gap between the two narrows with
time. The gap appears to be a function of the high percentage of
part-time students who are enrolled in distance education programs. The
mode of distance education delivery does not appear to be a salient
factor in student outcomes for demonstration program participants.

The Department's experience working with participants has provided
insight into the ways that current laws and regulations governing Title
IV student financial assistance programs may inhibit institutions from
designing programs that afford maximum flexibility for students and
accommodate innovative instructional approaches. In addition to the
requirements relating to the amount of distance education an institution
may provide, and the requirements relating to time, the lack of
consistency across the student financial aid programs make it difficult
for institutions to effectively manage the Federal student aid programs
when they offer programs in other than standard terms or in a mix of
term structures.

The Department has uncovered no evidence that waiving the 50% rules, or
any of the other rules for which waivers were provided, has resulted in
any problems or had negative consequences. Three years of experience
working with the demonstration program participants indicates that the
potential risk to Title IV student financial assistance programs has
more to do with the financial viability and administrative capability of
the institution than with the mode of delivery in which the education is
offered.

Based upon the experience gained to date through the demonstration
program, and the trends that are evident in the development of distance
education generally, the Department recognizes the need to amend the
laws and regulations governing Title IV student financial assistance in
order to expand distance education opportunities. The demonstration
program has been an excellent vehicle for developing and testing new
approaches, and its participants have devised some very interesting
models.

# INTRODUCTION

The Distance Education Demonstration Program was authorized by Congress
in the 1998 reauthorization of the Higher Education Act of 1965 (HEA) in
section 486. The purpose of the demonstration program is to: (1) test
the quality and viability of expanded distance education programs
currently restricted under the HEA; (2) provide for increased student
access to higher education through distance education; and (3) help
determine the most effective means of delivering quality education via
distance education, the specific statutory and regulatory requirements
that should be altered to provide greater access to distance education
and the appropriate level of Title IV student financial assistance for
students enrolled in distance education programs.

The authorizing legislation stipulated that the Secretary should select
15 participants for the first year of the demonstration program, which
began on July 1, 1999 and up to 35 additional participants in its third
year, commencing July 1, 2001. Thirteen of the original participants
continue in the program[^3] and nine participants joined the program as
part of the second cohort. Current participants include:

-   Five private, for-profit institutions -- American InterContinental
    University, Capella University, Quest Education Corp/Kaplan College,
    University of Phoenix and Walden University.

-   Seven private, non-profit institutions -- Franklin University,
    Marlboro College, New York University, Regis University, Southern
    Christian University, the United States Sports Academy, and Western
    Governors University.

-   Five public universities -- Eastern Oregon University, Florida State
    University, Texas Tech University, University of Maryland University
    College, and Washington State University.

-   One community college-- Brevard Community College.

-   Two private consortia -- Latter Day Saints Church Education System
    and JesuitNET Consortium.

-   Two public systems/consortia -- North Dakota University System and a
    consortium of Washington State University and the community and
    technical colleges in Washington.

-   One public/private consortium -- Connecticut Distance Learning
    Consortium

Participants have received waivers of certain statutory and regulatory
provisions governing the HEA Title IV student financial assistance
programs to enable them to provide Title IV aid to distance education
students more efficiently and, in some instances, to expand their
distance education programs beyond otherwise applicable statutory
limits. The waiver authority granted to the Secretary is limited to:

-   the requirements of section 472(5) as the section relates to
    computer costs[^4];

```{=html}
<!-- -->
```
-   sections 481(a) and 481(b) as they relate to requirements for a
    minimum number of weeks of instruction;

-   sections 102(a)(3)(A) and 102(a)(3)(B) -- the 50% institutional
    eligibility requirements;

-   section 484(l)(1) as it relates to the definition of a
    telecommunications student as a correspondence student;

-   one or more of the regulations prescribed under parts F[^5] and G of
    Title IV of the HEA that inhibit the operation of quality distance
    education programs; and

-   additional waivers for Western Governors University because of its
    unique structure.

The chart in the appendix summarizes information about Distance
Education Demonstration Program participants. A key to the waivers is
provided. More detailed information about the participants is available
on the demonstration program website
<http://www.ed.gov/programs/disted/awards.html>.

# INCREASING ACCESS 

The authorizing statute states that a primary purpose of the Distance
Education Demonstration Program is to provide increased student access
to higher education through distance education programs. Access can be
limited in a number of different ways, including geography, student
resources, time constraints, academic programs structures, and
institutional policies. The distance education delivery modes and
program structures used by demonstration program participants address
these constraints to greater and lesser degrees.

## Distance Education Delivery Modes

Following is a brief discussion of each of the delivery modes used by
program participants, followed by the names of the institutions
employing each.

-   Correspondence study -- the institution mails lessons to students
    who work independently and periodically submit assignments and
    examinations for grading by an instructor. This mode poses the
    fewest barriers to student access since the delivery system (U.S.
    Mail) is ubiquitous and students can typically begin a course
    anytime, work at their own pace in a place of their choosing, and
    take six months to a year to complete it. However, some institutions
    require their federal financial aid recipients to complete the
    coursework within a set time frame for reasons that will be
    discussed in the section on student aid issues.

> *Texas Tech University, Brigham Young University, Eastern Oregon
> University, North Dakota University System institutions*

-   Interactive videoconferencing -- telecommunications networks link a
    faculty member with students located in classrooms around the state
    or region. This method brings the classroom closer to the students,
    but does not provide the flexibility of time. Students are required
    to be in a particular place at a particular time, and, since these
    "extended classrooms" usually piggyback on the traditional
    classroom, students must wait to begin a course until the start of
    the quarter or semester.

> *North Dakota University System institutions; Washington Community and
> Technical Colleges*

-   Telecourses -- instruction is delivered on videotape (or through
    cable distribution) to students studying at home. Often, the
    telecourses are professionally produced by another entity (such as
    Coastline Community College, Dallas Telelearning, Annenberg/CPB
    project) and licensed by schools whose faculty adapt them as
    appropriate. Course packages include student study guides,
    instructor guides, and video programs. In some cases, institutions
    videotape their own faculty teaching on-campus classes. The trend in
    recent years is to incorporate web components and online
    communication through email and discussion groups.

> *Brevard Community College, Charter Oak State College, Community
> Colleges of Colorado, Eastern Oregon University, Washington State
> University, Washington Community and Technical Colleges*

-   Asynchronous online instruction -- students have access to
    electronic classrooms that contain instructional materials with
    links to other online resources, and tools to facilitate group
    discussion, small group activities, and one-to-one communication.
    Students can be located anywhere in the world where they have access
    to a computer, a phone line and an Internet service provider. They
    can participate in a class "asynchronously" -- that is, they do not
    have to be online at a particular time, but can enter into an
    ongoing electronic discussion and complete course modules whenever
    it is convenient for them. Because online instruction does not
    require a physical classroom, it provides a means for institutions
    to schedule courses to begin every week or even every day of the
    year.

> *All demonstration program participants*

-   Synchronous online instruction -- students at home log onto
    computers that are linked through the Internet to faculty and
    students in a classroom. They can interact with others in the
    classroom using communication tools such as an online chat function.
    Students have the option of viewing the streaming video of the class
    at a time of their own choosing, but by doing so they lose the
    opportunity to interact.

### Southern Christian University

## Programs and Enrollments

The number of students enrolled in distance education programs offered
by the initial cohort of participants has more than doubled since the
1998-99 academic year, from just under 13,000 to over 27,000. This
growth is concentrated in degree programs, rather than certificate
programs. Only a few of the participants report that they offer
certificate programs by some form of distance education and all but one
of these report very low enrollments. The exception is Capella
University, which has more than doubled its offerings of online graduate
certificate programs in three years. Data are reported in the aggregate
rather than by individual certificate program, so all that can be said
about enrollments is that the ratio of the number of programs to the
number of students has increased from 1:2 to 1:6.

It is common for certificate programs to consist of a subset of courses
from the institution's degree programs. In many cases, students do not
identify themselves as certificate-seeking at the outset. Rather, they
request the certificate after they have completed the requisite number
of courses and make the decision that they will not continue to earn a
degree, or upon completion of the degree program. Many institutions
consider it a good marketing strategy to offer short-term certificate
programs to attract students who may have specific training or
professional development needs.

There has been considerable growth as well in the number of onsite
students who are taking distance education courses. This total increased
from 19,000 to over 42,000 in the same three-year period, with almost
every participant at least doubling the number of students taking a mix
of distance education and onsite courses. It is evident that distance
education provides flexibility for all types of students, not just those
that are unable to come to campus to pursue their education. It is also
becoming increasingly clear that it will not be possible to continue to
make distinctions among students and academic programs based on mode of
course delivery.

There were fluctuations, as well, in the number of students who take
only onsite courses. The majority of participants reported increases in
the number of these students, although the magnitude of the increases
varied considerably. Two participants, the North Dakota University
System and University of Maryland University College (UMUC), reported
decreases in this population. The fact that the North Dakota University
System reported increases in the number of students enrolled in distance
education programs and in those taking a mix of distance education and
onsite courses is an indication that the System's use of distance
education has truly enhanced access for students for whom on-campus
study is not the best option. In the case of UMUC, which serves
primarily adult students, the decrease in enrollments in its onsite
programs is evidence of students shifting from onsite to distance
education course options, either voluntarily, or because onsite courses
are not available.

In addition to Western Governors University, which offers no
courses,[^6] four participants in the original group and three in the
new group exceed or are close to exceeding the 50% rules \-- Southern
Christian University, the United States Sports Academy, Charter Oak
State College (part of the Connecticut Consortium), UMUC, Capella
University, Eastern Oregon University, and Walden University. The first
two institutions have very small onsite programs and are in niche
markets. They serve widely dispersed populations that are most easily
reached through distance education. Charter Oak State College is a
virtual institution that offers degree completion programs and offers
students a variety of ways of earning credits. Capella and Walden
Universities have both offered independent study graduate programs for
many years and are now shifting to online, cohort-based distance
education programs. They are launching new programs, developing large
numbers of online courses, and experiencing steady growth in enrollments
in these programs. Eastern Oregon University has a large population of
students enrolled in correspondence courses, and UMUC is experiencing
very large increases in enrollments in online courses. During the course
of the demonstration program it is possible that one or two other
institutions may exceed the 50% rules.

It has become evident that there is a great deal of confusion about how
to interpret the 50% rules because of the interplay between
institutional and student eligibility. The University of Phoenix, which
enrolls large numbers of students in courses offered via
telecommunications and has more degree programs than certificate
programs, retains its eligibility as long as it has one more onsite
course than distance education courses -- even if more than 50% of its
students are enrolled in telecommunications and correspondence courses.
UMUC, on the other hand, loses its eligibility if more than 50% of its
students are enrolled in telecommunications courses since UMUC has more
certificate than degree programs.

There is considerable overlap in the curricular areas of distance
education programs offered by participants. Almost all have degree
programs in business and computer/information science at the level
appropriate to the institution. Other popular disciplines include
liberal arts or general studies, and health professions at the
undergraduate level; social sciences/psychology at both undergraduate
and graduate levels; and education and engineering at the graduate
level. In this regard, the participants reflect a strategy that is
common among postsecondary institutions engaged in distance education --
to offer programs that address workforce needs and/or that are likely to
attract large numbers of adult students.

## Student Characteristics

Women predominate in all three of the groups on which demonstration
program participants were asked to report: students enrolled in distance
education programs, onsite students taking one or more distance
education courses, and onsite students who did not take any distance
education courses. (In the following discussion, these groups will be
referred to as distance education, mixed and onsite students.) The gap
between women and men is smallest in the onsite group, where 53% of the
population is female. There is a slightly higher percentage of women in
the mixed group (60%) than in the distance education group (58%) and the
mixed group tends to be younger and to include more full-time students.
These factors suggest that a portion of the mixed group is traditional
students who, for a variety of reasons, are augmenting their on-campus
education with distance learning courses. These reasons may include
students' desire for more flexibility, the lack of seats in a
traditional class, and the attraction of the mode of study.

Over three-quarters of both men and women enrolled in distance education
programs are studying part-time. For both men and women, as age
increases, the percentage attending part-time increases. There is a huge
jump for both sexes between students that are 24 years old and younger
and the next reporting category (ages 25-34) in percentage attending
part-time -- from 56% to 80%. While it is not new information that older
students are more likely to study part-time, it is revealing that over
half of these distance education students under age 25 are also engaged
in part-time study.

The distribution of male and female distance education students across
age groups is very similar. Over one-third of both men and women are in
the 25-34-age range and two-thirds are in the 25-44-age range. In the
mixed group, which tends to be younger, the distribution of male and
female students across age groups is also similar. Nearly half are the
age of traditional college students and three quarters are 35 years or
younger. Dissimilarities between men and women emerge in the population
of onsite students that take no distance education courses. While this
group is the youngest overall, the women tend to be older than the men.

The first *Report to Congress on the Distance Education Demonstration
Program* (January 2001) notes that, with only a few exceptions, smaller
percentages of minorities were enrolled in participating institutions'
distance education programs than in their onsite programs and this was
true as well of students taking a mix of onsite and distance education
courses. The data for 2000-01 show a similar pattern when examined
institution by institution across the three categories. To understand
what this may mean, two things need to be taken into consideration. One
is the fact that there is a much higher percentage of "race/ethnicity
unknown" in the data reported for students in distance education
programs than for those in mixed and onsite programs. Another is
implicit in the results of research done by UMUC, which looked at trends
over time for the participation of minorities in their distance
education programs and in their online courses and concluded that the
minority participation is increasing at a rate similar to participation
by majority students. A snapshot at a particular point in time cannot
capture this kind of information. UMUC has more distance education
students by far than any of the other initial participants, so this
research is extremely significant.

Approximately 23% of distance education students in participating
institutions received some form of Title IV student financial aid in
2000-01 as compared with 25% of onsite students. Loans, both subsidized
and unsubsidized, were the more prevalent form of aid for distance
education students. Nonetheless, over 40% of those [distance education
students]{.underline} receiving federal financial aid received Pell
grants, which is noteworthy given the high percentage of distance
education students who attend part-time and the inclusion in the sample
of graduate students, who are not eligible for Pell grants.

# STUDENT SUCCESS

## Course Completion

Several participants in the initial cohort established goals related to
course completion and academic persistence. Typically, course completion
rates are highest for graduate courses and lowest for lower-division
courses. Data related to demonstration program participants' distance
education courses follow this same pattern.

In 2000-01, one institution, which offers bachelor's degree completion
and master's degree programs, exceeded its goal of maintaining a
cumulative online course completion rate of 80%. The online course
completion rate rose to 80.8% from 79.64% reported for the prior year.
The institution's analysis indicates that higher completion rates result
from the utilization of active learning techniques, such as case study
work, group research projects and group discussions or debates.

Another institution, which offers certificates, and associate and
bachelor's degree programs, set a quarterly course retention goal of
82%, which it exceeded during three of the four quarters of the 2000-01
academic year. The quarter in which the course retention rate fell short
of the goal was one in which the institution experienced many problems
with the technology that supports administrative processes and course
delivery. This is a strong validation of the inclusion of technical
systems in distance education quality assessments.

Another participant reports that in Spring 2001, 75% of its
undergraduate online course enrollments and 84% of its graduate
enrollments in online offerings resulted in successful course
completions. Comparable figures for students enrolled in on-campus
courses are 85% and 89%, respectively. These figures combine all
academic disciplines. The participant is doing other studies comparing
course withdrawal in specific academic disciplines in online and
classroom-based courses to see whether the nature of the academic
discipline is a salient factor. Total course withdrawal rates varied
considerably across all the programs examined. At the graduate level,
the proportion of successful completions in online offerings often
exceeded the proportion associated with on-campus courses when viewed
from a discipline perspective.

A community college system reports steady improvement in the online
course completion rate (the ratio of courses attempted/courses
completed) from 66% in 1998-99 to 71% in 2000-01. Over the same period,
the number of students enrolled in online courses increased
dramatically, from 6,000 to 22,000. For this three-year period, the
colleges reported increases in the percentage of first-time students who
are engaged in online learning. Such students now comprise just over a
third of students taking online courses in financial aid eligible
programs. Most students in these programs take a mix of on-campus and
online courses.

The participant reporting the highest online course completion rates
(88% in the 1999-2000 academic year and 93% in 2000-01 in upper level
undergraduate courses) credits its success to the use of course mentors
who are assigned to small cohorts of students. The mentors support the
lead faculty member and serve as the first point of contact for their
student cohort, thereby reducing the burden on the lead faculty member
and insuring timely and individualized communication. Mentors also grade
assignments and examinations at the discretion of the lead faculty
member.

## Program Retention and Completion

All participants are asked to supply information on enrollment,
persistence, and completion for students who enroll for the first time
as of the start of each reporting year and to track each cohort for the
duration of the demonstration program. Students who are enrolled
part-time or full-time in programs leading to a certificate or degree
are included in one of three categories: distance education program
students; onsite program students; or as "mixed" students, i.e., those
who are enrolled in programs offered both onsite and through distance
education who take courses in both formats.

*Baccalaureate Degree Programs*

Data reported by the nine participants that offer baccalaureate degree
programs (including degree-completion programs)[^7] showed higher median
retention rates for students enrolled in onsite programs than for
distance education program enrollees. However, the gap between the two
narrowed from ten percentage points after two years (66% onsite
[vs.]{.underline} 56% distance education) to just two percentage points
after three years (50% [vs.]{.underline} 48%). This may be a function of
the high percentage of part-time students who are enrolled in distance
education programs. The time required to complete a baccalaureate degree
for a part-time student is seven to ten years. As a result, a snapshot
taken after a year or two may not allow sufficient time to draw
conclusions. In addition, some students may decide after taking one or
two courses that distance education is not their preferred mode of
learning.

The spread in reported retention rates for bachelor's degree programs is
wider for the distance education programs than for the onsite programs.
This may be a function of the degree to which individual institutions
have been successful in helping students determine what mode of
education is best for them and in providing them the support they need
to be successful.

The mode of delivery does not appear to be a salient factor in student
outcomes in these baccalaureate degree programs. The institutions
offering full degrees through correspondence report retention rates well
above the median. Those participants offering only online courses report
retention rates that cluster around the median. The retention rates
reported by participants offering programs through a mix of media (which
may include courses offered by correspondence, interactive video,
videotape, and online) show much greater variation across institutions.

*Graduate Degree Programs*

The retention data reported by the eight participants offering graduate
degree programs are higher than those reported for baccalaureate degree
programs, which is not surprising given the prior successful academic
experiences of the students and the generally shorter length of the
programs. What is surprising is that the median retention rate after two
years for students enrolled in distance education programs is higher
than for those enrolled in onsite programs (63.5% [vs.]{.underline}
55%). This persists into the third year, where median retention rates
were 63% and 51%, respectively. The range in retention rates is somewhat
broader for onsite than for distance education programs.

The two institutions that offer students the option of taking both
onsite (or directed study) courses and distance education courses for
some of their graduate programs reported much higher retention rates for
these students than for students taking just distance education or
onsite courses. One institution, which enrolls large numbers of
students, reports retention rates hovering around 90% after two and
three years for students mixing course delivery modes.

As with baccalaureate degree programs, delivery mode does not seem to be
a significant factor affecting retention in these graduate degree
programs. It should be noted, however, that the delivery modes for
graduate programs are less diverse than for undergraduate programs. None
of the participants offers graduate programs by correspondence, and all
include programs delivered online.

*Associate Degree Programs*

Five participants offering associate degree programs through distance
education reported retention data for some of the years by cohort.[^8]
The reported retention rates for students enrolled in distance education
programs improve or remain stable for four of the participants. The one
participant that offers students the option of taking both online and
onsite courses to meet degree requirements reported somewhat higher
retention rates for these students as compared with those taking courses
in only one format (i.e., onsite or online), which is in line with the
information reported for graduate and bachelor's degree program
outcomes.

# STUDENT AID ISSUES

The first report to Congress on the Distance Education Demonstration
Program, which was issued in January 2001, included a comprehensive
discussion of the context out of which the demonstration program arose.
It provided a history of the statutory changes affecting Title IV
student financial assistance for distance education, and the forces that
drove their development. It described the significant ways in which the
landscape has changed with the emergence of new technology and a
proliferation of new models for organizing postsecondary education.
Finally, it offered an in-depth discussion of term structures, the 50%
rules, rules relating to time, calculation of awards, disbursement of
aid, and the ways that these may pose barriers to the growth of distance
education and the development of new educational models. For reference,
the report is available online at
<http://www.ed.gov/programs/disted/performance.html>

The majority of participants in the demonstration program (as well as
the majority of all postsecondary institutions offering distance
education programs) structure their distance education programs in
standard terms. Often this does not arise from academic program design
considerations or student needs. Rather, it is driven by the
capabilities of computer systems, which are designed to handle
traditional academic structures. In addition, the Higher Education Act
and Department regulations are based on traditional patterns of higher
education. Still, there are several institutions in the program that, in
spite of significant difficulties, are being innovative. Their
experiences have helped us identify a number of challenges postsecondary
educational institutions face with administering Title IV student
financial assistance programs when they attempt to enhance student
access and flexibility. Although the focus of the demonstration program
is on distance education, many of the challenges pertain to
non-traditional educational models for classroom-based instruction.

## Barriers to Increasing Course Start Dates

Many institutions are trying to increase the number of times a year
students can begin coursework. This added flexibility is important for
non-traditional students. Distance education enables this increased
flexibility since in most delivery modes classroom space and other
physical resources are not needed. It is very common for institutions to
embed mini terms within a standard semester or quarter. This poses no
particular problems for financial aid administrators other than the need
to adjust aid packages mid-term for students who add (or drop) credits
for the second mini term. Difficulties emerge as soon as institutions
move outside of the boundaries of the standard-term structure. This
happens most commonly when an institution adds semester- or
quarter-length terms that begin at the mid points of the fall and spring
terms as illustrated below.

8/30\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_12/13
1/28\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_5/14

Regular Fall Regular Spring

8/30\_\_\_\_\_\_\_\_\_[10/22]{.underline}
[10/23]{.underline}\_\_\_\_\_\_\_\_12/17 1/28\_\_\_\_\_\_\_\_\_3/19
4/2\_\_\_\_\_\_\_\_5/14

Fall 1 Fall 2 Sp 1 Sp 2

10/23\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_2/12
4/2\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_7/15

Mid Fall Mid Spring

5/28\_\_\_\_\_\_\_\_\_\_\_\_\_\_8/19

Summer

At this point, the institution has overlapping terms and technically the
financial aid officer should not process aid for students enrolled in
courses that are part of both the regular and the mid-semester terms
according to standard term rules. However, it is likely that many aid
officers do just that because they consider their school to be
structured according to standard terms and do not recognize this as
something other than standard terms. In this case, the overlap is only a
matter of a couple weeks. While a student taking one 3-credit course in
the fall term and one 3-credit course in the mid-fall term would be
eligible for more loan funds if aid were administered according to
standard term rules rather than nonstandard, the student would not get
more loan aid than the student enrolled in two 3-credit courses in the
regular fall term. In cases where there are greater periods of overlap,
students could end up with more aid as a result of being paid living
expenses twice for the period of overlap. As more terms are added, there
is no option but to conclude that the institution is nonterm from a
financial aid perspective.

There are some negative consequences for students when their aid is
administered according to nonterm rules. Under the nonterm rules, the
student would receive half of the scheduled full-year, full-time Pell
Grant disbursement up front. However, the student would not receive the
second disbursement until he or she has *successfully* completed half of
the credits for a full-time student. By contrast, a student whose
financial aid is administered under the standard term rules would only
need to finish the term before receiving another disbursement.[^9]

Another approach to increasing the number of times a year students can
begin coursework is the University of Phoenix model whereby students are
enrolled in one course at a time sequentially all year round. This
provides opportunities for adult students to begin an academic program
many times during the year and to juggle more easily the multiple
demands on their time. If all the academic programs are structured
according to this model, then the institution can standardize processes
to handle financial aid processing. If, however, only one or a few
programs are structured in this way, then the difficulties are daunting.

## 

## 

## 

## Defining a Program

Title IV laws and regulations draw distinctions on the basis of
"programs." Programs are considered either correspondence,
telecommunications, or residential. A program is presumed to consist
primarily of courses of a single type that are offered in standard
terms, in non-standard terms, or nonterm. In actuality, many
institutions offer programs that consist of courses of different types
and different courses in different formats so that students earn the
same credential in different ways.

As an example, one demonstration program participant delivers distance
education courses and degrees through a variety of delivery methods:
two-way interactive video, print-based correspondence, videotape, and
online via the Internet. This institution currently offers associate,
bachelor's and master's degrees via distance education. Each program
utilizes two or more distance education delivery methods and all the
associate and bachelor's degree programs include courses offered by
correspondence, usually supplemented by email between the student and
the instructor. None of the degree programs is available entirely
through correspondence study. How does the financial aid officer treat
students who are enrolled in a mix of types of courses, a mix that
changes from one term to the next? Since there are limitations on the
amount of aid students in correspondence programs can get, the answer
has very real consequences. Students enrolled in a correspondence
program are considered half-time and they cannot include indirect costs
in their cost of attendance. In addition, there are special disbursement
rules for Pell Grant and Federal SEOG programs that result in students
getting their disbursements later than students in other types of
programs.

Another example is an institution that offers online and onsite courses
in a standard term structure and correspondence courses in a nonterm
structure (students can begin these courses at any time and they have
until the end of the summer to complete them). Students can take these
correspondence and online courses to meet the requirements for many of
the institution's undergraduate degree programs. How does the aid
officer know if a student is enrolled in a nonterm or standard term
program?

## Year Round Enrollment

The traditional academic calendar has built-in vacation periods and
breaks between terms with a summer term enrollment as an option.
Vocational training programs, on the other hand, typically require
students to be continuously enrolled in what are usually programs of
relatively short duration. Higher education institutions that focus on
adult students are blurring these distinctions by breaking out of the
traditional academic calendar in order to allow these students to
complete degree programs as efficiently as possible. Title IV rules and
regulations do not address year round enrollment in academic programs.
The concept of "continuous enrollment" has been embedded in clock hour
programs that are of short duration and not segmented into courses or
modules.

Three demonstration program participants expect students to be
continuously enrolled in their degree programs. Their academic calendars
have no established vacation periods or other breaks between classes.
One offers online courses beginning every week, which are five or six
weeks in duration. The university considers this nonterm for financial
aid purposes. In this model, students take only one course at a time and
they can begin a program or a course any week of the year. The other two
each have two models. Their course-based model is structured around
standard terms that run continuously through the calendar year. Students
can begin the course-based programs at the beginning of any term. Their
independent study model is built around individualized learning plans
that also presume continuous enrollment. Students may begin the
independent study programs any day of the year.

While the academic models differ, all three institutions are challenged
by finding ways to allow students to take breaks in accordance with
Title IV laws and regulations, which do not address "continuous
enrollment" for academic degree programs. The institutions have
developed continuous enrollment and leave of absence policies that are
awkward at best and that cannot easily be mapped against existing Title
IV rules. The Department is working with the institutions to devise
approaches that provide some flexibility. This requires careful
consideration of issues related to enrollment status, satisfactory
academic progress standards, withdrawal, payment of living expenses and
other indirect costs, and return of Title IV aid.

## Consortial Arrangements

Many four-year institutions have articulated their degrees with
community colleges so that students can complete the first two years of
a bachelor's degree program at the community college and finish the
degree at the four-year institution. Distance education facilitates this
arrangement by providing a way for students to take the upper-level
courses without leaving their local community. Through a consortium
agreement, the student's "home institution" processes all of the
student's financial aid.

Students often take courses from both institutions simultaneously. In
many instances, the institutions have different academic calendars and
often the community college is structured in quarter terms while the
four-year institution operates in semester terms. Generally, the
financial aid officer will package aid based on a student's expected
enrollment and will manually translate the quarter hour credits into
their equivalent in semester hour credit to determine the student's
enrollment status. In order for these arrangements to work, there needs
to be excellent and ongoing communication between the schools about the
students' actual behavior and academic performance. This creates an
administrative burden on the financial aid office that poses a barrier
to increasing these types of relationships.

## Competency-based Models

Since competency-based approaches are not rooted in time, they come in
conflict with the core concepts around which financial aid laws and
regulations are constructed.[^10] The equation between time and credits
is no longer valid; different students will take different amounts of
time to achieve the competencies. Because of the inherent conflict
between financial aid concepts and competency-based approaches,
institutions that focus on competencies rather than seat time have
difficulty answering a whole range of basic financial aid questions: How
does an institution determine a student's cost of attendance when it is
not clear upfront how many courses a student might complete in a given
period of time? If students can progress through course material at
their own rate, and enroll in courses on-demand, how does an institution
define enrollment status, program length and academic year? How is
academic progress measured when there is no set expectation of how long
it will take a student to complete the degree?

*Program level competencies*

Western Governors University (WGU) defines a set of competencies for
each degree or certificate it offers and develops assessments whereby
students demonstrate that they have acquired the competencies for the
program in which they are enrolled. They may take courses to prepare
themselves for the assessments, but are not required to do so, nor are
they required to accumulate a certain number of credits. Students
enrolled in the same degree program will take widely varying amounts of
time to acquire and demonstrate the competencies.

The Department worked with WGU to develop a model for administering
student financial aid based on nonterm structure. WGU participates in
Pell Grant and Direct Loan Programs only and does not pay living
expenses for its students. Although this simplifies things to a degree,
it has been very challenging to transition from competencies and
assessments to credit hours. An example is the monitoring of
satisfactory academic progress (SAP). The institution does an evaluation
of a student's SAP every six months. The standard is established by
dividing the total number of assessments in a given program evenly over
the length of the students' Academic Action Plan. A half-time student in
a two-year program that consists of 8 assessments would be expected to
complete two assessments each year of the four years it would take to
complete the program. But the eight assessments do not represent the
same magnitude of work. The assessment for one domain might be comprised
of fifteen subdomains, while that of another is comprised of only five
subdomains. While this does not directly affect the way aid is
administered, it might contribute to more students failing to make SAP
than would be the case in a credit-based environment. The students who
are receiving Title IV student financial aid are not yet far enough
along in their programs to test this conjecture.

The application of some of the rules governing financial aid
administration in nonterm environments has consequences that seem to
disadvantage students. An example is the application of loan procedures
in a nonterm environment with a borrower-based academic year. Nonterm
programs must use the borrower-based academic year for loans. A
borrower-based academic year is not a standard period of time; rather,
the beginning and end dates depend on an individual student\'s
enrollment and progress. The borrower-based academic year cannot end
until a student has completed both the number of weeks and the number of
hours (full-time equivalent) in the academic year. In contrast, a loan
period can be no more than 12 months. A student regains eligibility for
a new annual loan limit only after completing the hours and the weeks in
the borrower-based academic year. The student's enrollment status
affects the frequency of loan eligibility, which has the effect of
disadvantaging a student who is going less than full-time.

*Course-level competencies*

The JesuitNET Consortium's approach involves competencies at the course
level, as part of a full academic degree program. In designing the
courses, the faculty identify what students should know, understand and
be able to do, and the knowledge and skills students would need in order
to display evidence of their learning. As students work their way
through the courses, they are given the opportunity of "testing out" of
the modules that cover concepts, facts and procedures that they may
already have mastered. This results in different students taking
different amounts of time to complete each course. It will require
students different amounts of "seat time" to achieve the competencies
that are associated with each course in the degree program, which
nonetheless consist of a specified number of credit hours. In theory,
students should be able accelerate the time to degree.

The JesuitNET Consortium is in the process of developing the courses for
its master's degree program. In the coming year, the Department will
work with the Consortium to adapt elements of the nonterm model for
student financial aid delivery as it implements its competency-based
approach in phases over time. The first step will be the provision of
courses with variable completion rates. Students will have the option of
completing each course on a fast track (10 weeks), a regular track (15
weeks), or a slow track (20 weeks). If enrollments are large enough for
reasonably-sized cohorts to be formed, additional sessions will be
scheduled to start ten weeks after the first group of courses, resulting
in overlapping terms. Beginning with the 2003-04 academic year, if
enrollments justify, all the courses will be offered on-demand, with
variable completion dates.

Even without actual student examples to learn from, it is evident that
current financial aid laws provide a barrier to the achievement of one
of the objectives of this approach -- the acceleration of time to degree
for students who are able to demonstrate mastery of portions of course
content. Annual limits on the amount of aid students can receive result
in their getting less actual aid if they go through a program more
quickly, even though their expenses for tuition, fees and books are the
same as for students who take longer. This is because financial aid
supports living expenses, which are based on time, as well as direct
expenses.

## Student-based Administration of Aid in Credit Programs

The Community Colleges of Colorado conceived of an entirely new approach
to student financial assistance. It is based on student enrollment
behavior, rather than term structures and would allow institutions to
calculate all aid in the same way. However, it is primarily theoretical
at this point since the Department is not able to grant all the waivers
necessary to support this experiment.

The project replaces the concepts of "term" and "enrollment status" with
"months elapsed in academic year" and "credits attempted in the academic
year." Students would be awarded Title IV student financial aid funds
based on the number of credit hours attempted. This model is built
around a nonterm academic structure. Students are initially awarded
full-time financial aid for nine months, defined as 24 credit hours. As
the student enrolls in courses, the award for direct expenses is
continuously recalculated based on actual enrollment. For example, if a
student initially enrolls for 7 credit hours, that student will be paid
7/24ths of his total full-time award. As the student adds credit hours,
his award will be increased for each enrolled credit hour. The concept
of enrollment status has been taken out of the equation and a student is
paid for the actual credit hours for which he has enrolled. A student is
paid up to a total of 24 credit hours for each academic year. Each
disbursement is contingent upon the student\'s meeting satisfactory
progress standards. The payment of living expenses is made on the basis
of time -- with four disbursements over the course of the academic year.

The Community Colleges of Colorado has not moved as quickly as they
anticipated to offer courses in ways that would support this experiment.
They currently offer standard term-based courses that all begin and end
at the same time. The Community Colleges of Colorado sought Department
permission to modify their approach for the initial implementation, in
order to test paying on a per credit hour basis in a standard term
environment. Understandably, they were not willing to put the students
in the pilot program at a disadvantage by administering their aid in the
nonterm structure, since students would be required to successfully
complete their credit hours to become eligible for another disbursement.
They proposed to begin implementing their model under standard term
rules, with disbursements for direct and indirect expenses tied to
credit hours. Students are initially awarded aid based on full-time
enrollment (24 credits) for the nine months. The payment period is
established as 12 credits. As the student enrolls, the award is
continuously recalculated based on actual enrollment. Currently, the
Department lacks the statutory authority to waive the standard term Pell
Grant disbursement rules, which would be required in order for the
experiment to move forward.

With waivers of some of the program disbursement rules (including the
nonterm requirement for successful completion of all credits before
another disbursement may be made), the Community Colleges of Colorado
and other demonstration program participants interested in this
student-based approach could fully implement the model, which would
accommodate courses that start anytime and end anytime by providing a
continuous stream of grant assistance to students. The colleges would
consider students to be entitled to 12 credit hours (12/24) of their
award continuously and a student would be allowed to draw up to 12
credit hours worth of their grant by enrolling for 12 credit hours. As
soon as any credit hours are completed the student would be entitled to
receive awards for additional credit hours until the student has
received up to the maximum award. The student would be continuously
eligible for 12 credit hours worth of aid (1/2 of the award) and could
not receive more than that at any time. Since students might take more
or less time to complete the same number of credits, living expenses
would be paid on the basis of time elapsed.

The intent of the per-credit hour calculation is to simplify the process
by calculating all grants in the same way. This approach also could
create an incentive for students to continue to add credit hours and in
that way move more quickly towards completion of their degree.

This is among the most far-reaching and innovative approaches in the
demonstration program. However, the Department lacks authority to
provide the waivers that would make it possible for the Community
Colleges of Colorado to fully implement the model. Because of this, they
reluctantly pulled out of the demonstration program in fall 2002.

# CONCLUSIONS 

Financial aid rules evolved in an environment that was very different
from what exists today. The overwhelming majority of students pursuing
academic degrees were between the ages of 18 and 22, were going to
school full-time, and had few competing priorities. Most institutions
did not strive to serve students who were unable to come to campus or
unable to fit their schedules to the traditional academic calendar.
Those institutions that were providing some flexibility to
non-traditional students relied on printed materials, broadcast
television and videotape to deliver instruction, and provided no
opportunity for interaction with other students and very limited contact
with instructors. Degree-granting institutions typically structured
their programs in standard terms with courses running the length of the
term. Nonterm structures were the province of vocational and technical
programs that were measured in clock hours, were not segmented into
courses or modules, and were generally of short duration. There were few
for profit degree-granting institutions. Computers and the Internet did
not exist.

In response to the changing postsecondary education environment, the
laws and regulations governing Title IV student financial assistance
programs have increased in complexity. There are different disbursement
rules for each of the federal financial aid programs, as well as
different rules for various term structures. Courses are designed to
meet financial aid rules rather than the needs of students for whom
on-campus term-based instruction is not an option.

The majority of degree-granting institutions that attempt to provide
maximum flexibility for students and accommodate innovative
instructional approaches have to contend with the formidable task of
administering aid in a nonterm environment. The nonterm rules were
designed with vocational programs in mind and don't work well for
academic programs. In some cases, students receive less aid in the
nonterm environment as compared to the traditional term.

The demonstration program has been a useful vehicle for developing and
testing new approaches, and its participants have devised some very
interesting models. The Department\'s experience working with the
demonstration program participants indicates that the potential risk to
Title IV student financial assistance programs has more to do with an
institution's administrative capability and financial responsibility
than with the way in which the education is offered. The integration of
technology into all aspects of education makes it very difficult to
distinguish between "on-campus" and "distance education". Rather than
focusing on delivery mode, it will be important to pay close attention
to the environment in which educational institutions are operating \--
an environment that is significantly affected by economic forces.

## 

## 

## 

## 

## 

## Policy Perspectives

Based upon the experience gained to date through the demonstration
program, and the trends that are evident in the development of distance
education generally, the Department recognizes the need to expand
opportunities for distance education.

The first Report to Congress (January 2001) posed a number of policy
questions that have guided Departmental discussions in the past several
months. There is growing consensus on some of the policy questions, as
follows:

-   The current rules that define education delivered via
    telecommunications and videocassette or disc recordings as
    correspondence education if the total of such courses and
    correspondence meet or exceed 50% of the courses provided need to be
    revised or eliminated.

-   The definition of correspondence education needs to be revisited.

-   An acceptable alternative to the 12-hour rule that ensures that the
    amount of instruction is adequate for non-standard and nonterm
    structures is the "one day rule" when it is coupled with the
    requirement that a calendar time element must be met before
    subsequent disbursement of Title IV funds can be made.[^11]

-   The quality of distance education programs should be assessed
    through the same accreditation process that governs on-campus
    programs.

Still to be resolved are the following broader policy issues:

-   Should correspondence students be treated differently from other
    students in terms of Title IV aid?

-   Should current rules that require students enrolled in nonterm
    programs to "successfully complete" the courses for which they have
    been paid before they can receive a subsequent disbursement be
    retained, modified or eliminated?

-   Should term structures continue to be the foundation on which Title
    IV laws and regulations are built or is there an alternative that
    simplifies the existing process and accommodates current and
    as-yet-unanticipated ways of organizing instruction?

Distance education is only one of many responses to the demands of an
increasingly non-traditional student population. The upcoming
reauthorization of the Higher Education Act will provide the Department
and the Congress with the opportunity to address the policy questions
that the Distance Demonstration Program has raised, as well as many
other issues.

# APPENDIX -- Summary Information for Current Participants in Distance Education Programs

<table style="width:100%;">
<colgroup>
<col style="width: 11%" />
<col style="width: 8%" />
<col style="width: 6%" />
<col style="width: 12%" />
<col style="width: 17%" />
<col style="width: 19%" />
<col style="width: 6%" />
<col style="width: 6%" />
<col style="width: 6%" />
<col style="width: 5%" />
</colgroup>
<tbody>
<tr class="odd">
<td><strong>PARTICIPANT</strong></td>
<td><strong>LOCATION</strong></td>
<td><strong>TYPE</strong></td>
<td><strong>PROGRAM ENROLLMENTS</strong></td>
<td><strong>WAIVERS GRANTED</strong></td>
<td><strong>PROGRAMS</strong></td>
<td colspan="4"></td>
</tr>
<tr class="even">
<td>American InterContinental University</td>
<td>Georgia</td>
<td>For profit</td>
<td>Fewer than 100</td>
<td>None at this time</td>
<td>An associate degree, a bachelor's degree completion program, and two
master's degrees all online.</td>
<td colspan="4"></td>
</tr>
<tr class="odd">
<td>Brevard Community College</td>
<td>Florida</td>
<td>Public</td>
<td>1,000-3,000</td>
<td>Academic year; week of instruction; satisfactory academic
progress</td>
<td>Four online associate degrees and several certificate programs.</td>
<td colspan="4"></td>
</tr>
<tr class="even">
<td>Capella University</td>
<td>Minnesota</td>
<td>For profit</td>
<td>1,000-3,000</td>
<td>50% rules; telecomm student defined as correspondence (1)(2)(3)</td>
<td>Doctoral, master’s, bachelor’s degrees and certificate programs in
five fields. Two educational formats – independent study and online</td>
<td colspan="4"></td>
</tr>
<tr class="odd">
<td>Connecticut Distance Learning Consortium --25 institutions</td>
<td>Connecticut</td>
<td>Public and private</td>
<td>500-1,000</td>
<td>50% rules; telecomm student defined as correspondence (3); length of
academic year; week of instruction granted to three institutions</td>
<td>Six associate degree programs, eight bachelor's degree programs and
four master's degree programs through telecommunications technologies,
including the Internet.</td>
<td colspan="4"></td>
</tr>
<tr class="even">
<td>Eastern Oregon University</td>
<td>Oregon</td>
<td>Public</td>
<td>1,000-3,000</td>
<td>50% rules; telecomm student defined as correspondence (1)(2)(3);
academic year; week of instruction; def of full time student</td>
<td>Two associate degrees, six bachelor's degrees and a master's degree
through a combination of correspondence and telecommunications,
including the Internet.</td>
<td colspan="4"></td>
</tr>
<tr class="odd">
<td><h5 id="participant">PARTICIPANT</h5></td>
<td><h5 id="location">LOCATION</h5></td>
<td><h5 id="type">TYPE</h5></td>
<td><strong>PROGRAM ENROLLMENTS</strong></td>
<td><h5 id="waivers-granted">WAIVERS GRANTED</h5></td>
<td><h5 id="programs">PROGRAMS</h5></td>
<td colspan="4"></td>
</tr>
<tr class="even">
<td>Florida State University</td>
<td>Florida</td>
<td>Public</td>
<td>500-1,000</td>
<td>50% rules; telecomm student defined as correspondence (3)</td>
<td>Online bachelor’s degree completion programs in five areas of
concentration and three masters degrees.</td>
<td colspan="4"></td>
</tr>
<tr class="odd">
<td>Franklin University</td>
<td>Ohio</td>
<td>Private</td>
<td>500-1,000</td>
<td>50% rules; telecomm student defined as correspondence (3)</td>
<td>Online bachelor’s degree completion programs in three areas through
alliances with 120 community colleges nationwide.</td>
<td colspan="4"></td>
</tr>
<tr class="even">
<td>JesuitNet Consortium 3 institutions</td>
<td>District of Columbia, Illinois, Nebraska</td>
<td>Private</td>
<td>Program under development</td>
<td>None at this time</td>
<td>Online master's degree using a competency-based model</td>
<td colspan="4"></td>
</tr>
<tr class="odd">
<td>LDS Church Education System--4 institutions</td>
<td>Utah, Idaho, Hawaii</td>
<td>Private</td>
<td>500-1,000</td>
<td>50% rules; telecomm student defined as correspondence (3); academic
year; week of instruction; def of full-time student; def of
correspondence course</td>
<td>Bachelor’s degree through self-paced online and correspondence study
courses</td>
<td colspan="4"></td>
</tr>
<tr class="even">
<td>Marlboro College</td>
<td>Vermont</td>
<td>Private</td>
<td>fewer than 100</td>
<td>Academic year; week of instruction</td>
<td>Two online graduate certificate programs</td>
<td colspan="4"></td>
</tr>
<tr class="odd">
<td>New York University</td>
<td>New York</td>
<td>Private</td>
<td>100-500</td>
<td>50% rules; telecomm student defined as correspondence (1)(2)(3);
academic year; week of instruction</td>
<td>Two executive master's degree programs, an advanced certificate
program, and a master of science degree all offered online.</td>
<td colspan="4"></td>
</tr>
<tr class="even">
<td><strong>PARTICIPANT</strong></td>
<td><strong>LOCATION</strong></td>
<td><strong>TYPE</strong></td>
<td><strong>PROGRAM ENROLLMENTS</strong></td>
<td><strong>WAIVERS GRANTED</strong></td>
<td><strong>PROGRAMS</strong></td>
<td colspan="4"></td>
</tr>
<tr class="odd">
<td>North Dakota University System--11 institutions</td>
<td>North Dakota</td>
<td>Public</td>
<td>3,000-5,000</td>
<td>50% rules; telecomm student defined as correspondence(3); academic
year; week of instruction; def of full-time student</td>
<td>Ten associate degrees, four bachelor's degrees, a master's degree
and several certificates through various modes of distance education
including telecommunications, web-based and correspondence courses.</td>
<td colspan="4"></td>
</tr>
<tr class="even">
<td>Quest Education Corp/Kaplan College</td>
<td>Iowa</td>
<td>For profit</td>
<td>100-500</td>
<td>50% rules; telecomm student defined as correspondence (1)(2)(3);
academic year; week of instruction</td>
<td>Three associate degrees, two bachelor's degrees and five
certificates all online</td>
<td colspan="4"></td>
</tr>
<tr class="odd">
<td>Regis University</td>
<td>Colorado</td>
<td>Private</td>
<td>1,000-3,000</td>
<td>Satisfactory academic progress</td>
<td>Four bachelor's degree completion programs and four master's degree
programs all online.</td>
<td colspan="4"></td>
</tr>
<tr class="even">
<td>Southern Christian University</td>
<td>Alabama</td>
<td>Private</td>
<td>100-500</td>
<td>50% rules; telecomm student defined as correspondence(3)</td>
<td>Two bachelor's degrees and four graduate degree programs delivered
via the Internet in synchronous and asynchronous formats.</td>
<td colspan="4"></td>
</tr>
<tr class="odd">
<td>Texas Tech University</td>
<td>Texas</td>
<td>Public</td>
<td>100-500</td>
<td>50% rules; telecomm student defined as correspondence(3); academic
year; week of instruction; def of full-time student; def correspondence
course</td>
<td>Bachelor's degree through self-paced correspondence and online
courses; six masters degrees and a doctorate through telecommunications,
including Internet.</td>
<td colspan="4"></td>
</tr>
<tr class="even">
<td><strong>PARTICIPANT</strong></td>
<td><strong>LOCATION</strong></td>
<td><strong>TYPE</strong></td>
<td><strong>PROGRAM ENROLLMENTS</strong></td>
<td><strong>WAIVERS GRANTED</strong></td>
<td><strong>PROGRAMS</strong></td>
<td colspan="4"></td>
</tr>
<tr class="odd">
<td>United States Sports Academy</td>
<td>Alabama</td>
<td>Private</td>
<td>100-500</td>
<td>50% rules; telecomm student defined as correspondence (3); academic
year; week of instruction</td>
<td>Five self-paced master's degrees and a self-paced doctoral degree
online</td>
<td colspan="4"></td>
</tr>
<tr class="even">
<td>University of Maryland University College</td>
<td>Maryland</td>
<td>Public</td>
<td>over 10,000</td>
<td>50% rules; telecomm. student defined as correspondence (1)(2)(3);
academic year; week of instruction; def of full-time student</td>
<td>Bachelor's degrees in 15 areas, 19 graduate degree programs, and
several undergraduate certificates all online.</td>
<td colspan="4"></td>
</tr>
<tr class="odd">
<td>University of Phoenix</td>
<td>Arizona</td>
<td>Private</td>
<td>over 10,000</td>
<td>None at this time</td>
<td>An associate degree, bachelor's degrees in 9 areas, master's degrees
in 15 areas, and a doctorate all online.</td>
<td colspan="4"></td>
</tr>
<tr class="even">
<td>Walden University</td>
<td>Minnesota</td>
<td>For profit</td>
<td>500-1,000</td>
<td>50% rules; telecomm student defined as correspondence (1)(2)(3)</td>
<td>Four master's degrees and a doctorate all online.</td>
<td colspan="4"></td>
</tr>
<tr class="odd">
<td>Washington State University</td>
<td>Washington</td>
<td>Public</td>
<td>1,000-3,000</td>
<td>50% rules; telecomm student defined as correspondence (3); def of
full-time student</td>
<td>Bachelor's degree completion programs in six fields through
correspondence and telecommunications, including Internet.</td>
<td colspan="4"></td>
</tr>
<tr class="even">
<td>Washington Community and Technical College System -- 32
institutions</td>
<td>Washington</td>
<td>Public</td>
<td>1,000-3,000</td>
<td>50% rules; telecomm student defined as correspondence (3); academic
year; week of instruction; def of full-time student</td>
<td>Online associate degrees in four areas</td>
<td colspan="4"></td>
</tr>
<tr class="odd">
<td><strong>PARTICIPANT</strong></td>
<td><strong>LOCATION</strong></td>
<td><strong>TYPE</strong></td>
<td><strong>PROGRAM ENROLLMENTS</strong></td>
<td><strong>WAIVERS GRANTED</strong></td>
<td><strong>PROGRAMS</strong></td>
<td colspan="4"></td>
</tr>
<tr class="even">
<td>Western Governors University</td>
<td>Utah, Colorado</td>
<td>Private</td>
<td>100-500</td>
<td>Several special waivers were extended to WGU as specified in the
Program legislation; 50% rules; telecomm student defined as
correspondence (1)(2)(3); academic year; week of instruction</td>
<td>Professional certificates, five associate degrees, two bachelor's
degrees and one master's degree. WGU does not offer courses; degrees and
credentials are competency-based.</td>
<td colspan="4"></td>
</tr>
<tr class="odd">
<td colspan="5"><strong>Key to waivers</strong></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="even">
<td colspan="5">50% rules:</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td colspan="10"><p>Section 102(a)(3)(A) of the HEA and the regulatory
provision in 34 CFR 600.7(a)(1)(i). These statutory and regulatory
provisions make an otherwise eligible</p>
<p>“institution of higher education” under the HEA ineligible if the
institution enrolls 50 percent or more of its students in correspondence
courses.</p></td>
</tr>
<tr class="even">
<td colspan="10"></td>
</tr>
<tr class="odd">
<td colspan="10"><p>Section 102(a)(3)(B) of the HEA and the regulatory
provisions implementing that provision in 34 CFR 600.7(a)(1)(ii). These
statutory and regulatory provisions</p>
<p>make an otherwise eligible “institution of higher education” under
the HEA ineligible if the institution enrolls 50 percent or more of its
students in correspondence</p>
<p>courses.</p></td>
</tr>
<tr class="even">
<td colspan="10"><p>Telecommunications student defined as
correspondence: Section 484(l)(1) of the HEA and the regulatory
provisions implementing that section in 34 CFR 668.38.</p>
<p>This provision defines a telecommunications student as a
correspondence student if (1) the student is enrolled in certificate
programs of less than one year;</p>
<p>(2) the institution provides more certificate than degree programs;
or (3) 50 percent or more of the institution’s courses are offered by
correspondence and</p>
<p>telecommunications.</p>
<p>Academic year: Sections 481(a) and 481(b) of the HEA and the
regulatory provisions implementing those in section 34 CFR 668.2, to the
extent that they require</p>
<p>a minimum number of weeks of instruction for an academic year and
eligible program.</p>
<p>Week of instruction: 34 CFR 668.8(b)(2). This provision defines a
“week of instruction.”</p>
<p>Full-time student: The definition of “full-time student” in 34 CFR
668.2 to the extent that it precludes a correspondence student from
being considered a full-time</p>
<p>student.</p>
<p>Satisfactory academic progress: 34 CFR 668.1(e)(3) to the extent that
they require consistent application of satisfactory progress standards
to all students within</p>
<p>categories of students.</p>
<p>Def. correspondence course: Section 600.2 for courses that require
students to submit multiple assignments or portfolios of work for
evaluation by an instructor</p>
<p>in addition to, or in place of, examinations. Courses with these
characteristics will be considered “extended study.”</p></td>
</tr>
</tbody>
</table>

[^1]: The Department published final regulations on November 1, 2002
    that replaced the 12-hour rule with the one day rule for
    non-standard and nonterm structures, coupled with the requirement
    that a calendar time element must be met before subsequent
    disbursement of Title IV funds can be made.

[^2]: There is insufficient data to report on comparative outcomes for
    students enrolled in certificate programs.

[^3]: Masters Institute was removed from the program in the first year
    for improperly administering Title IV programs and the Community
    Colleges of Colorado voluntarily left the program in 2002.

[^4]: The 1998 Amendments to the HEA removed the restriction on
    including the cost to rent or purchase computer equipment for
    students receiving instruction by telecommunications. Effective
    October 1, 1998, the law specifies that there is no distinction made
    in the cost of attendance regarding the mode of instruction.

[^5]: The HEA prohibits the U.S. Department of Education from regulating
    in this area.

[^6]: Information about WGU's approach is contained in the discussion of
    competency-based models in the section on Student Aid Issues.

[^7]: The relatively small numbers of participants precludes reporting
    data separately for full baccalaureate degree programs and
    degree-completion programs.

[^8]: The remaining participant was untimely in submitting its annual
    report for 2000-01. Two of these participants (Western Governors
    University and Charter Oak State College) offer no onsite programs.
    As a result of these factors, there is insufficient data to yield
    meaningful information.

[^9]: A student meets this standard by passing, failing, withdrawing, or
    receiving an incomplete for all the courses for which the student
    registered.

[^10]: Time serves as a proxy for ensuring that institutions of higher
    education are providing an amount of instruction adequate to warrant
    the taxpayers' investment in Title IV student aid. The statue and
    regulations define an academic year as a minimum of 30 weeks of
    instructional time; the academic year also serves as the baseline
    for calculating the amount of aid a student enrolled in less than a
    30 week program is eligible to receive; time is also used to
    establish a framework for disbursement of aid; and there are annual
    limits placed on the amount of aid students can receive.

[^11]: This change was made by the Department and published in final
    regulations on November 1, 2002.