Negotiated Rulemaking Program Integrity and Institutional Quality - 3/4/24

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 DEPARTMENT OF EDUCATION

OFFICE OF POSTSECONDARY EDUCATION

NEGOTIATED RULEMAKING PROGRAM INTEGRITY 

AND INSTITUTIONAL QUALITY

SESSION 3, DAY 1, AFTERNOON

MARCH 4, 2024

On the 4th day of March, 2024, the following 

meeting was held virtually from 1:00 p.m. to 4:00

p.m.
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P R O C E E D I N G S

MR. WAGNER: Welcome back, everyone. 

My name is Kevin Wagner, and I'll be the FMCS facilitator 

for the afternoon and also for the public comment section 

which will begin at 3:30. Looks like everyone has their 

naming conventions correct. I know we we're talking 

about distance ed as we went into to lunch. And I do see 

a hand. Jo, go ahead. 

MS. BLONDIN: Yes. I wanted to call 

a caucus to discuss the asynchronous clock-hour issue and 

bringing back an approach. I would like to ask the 

following people to be in that caucus: Denise Morelli, 

David Musser, JoEllen Price, Zack Goodwin, Jamie Studley, 

Erika Linden, Scott Dolan, Laura Rasar-King, Jillian 

Klein, David Cohen, Michael Cioce, John Ware, Robby 

Anderson, Jessica Morales, and Emmett Blaney. 15 

minutes. 

MS. JEFFRIES: Brady, do you need 

anything repeated on that list?

MR. ROBERTS: I think I got them all, 

but Jo, I'll add you last, and you can correct me if you 

see any stragglers. 

MR. MUSSER: Can I make a request

about that? Did I hear Greg Martin's name on the list of 

Department folks who would be included or not?
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MS. BLONDIN: No. 

MR. MUSSER: If not, I think Greg 

should be included from the Department if Denise and I 

are. 

MS. BLONDIN: Okay. 

MR. MUSSER: Okay. 

MR. WAGNER: Brady, do you have 

everybody? Just want to make sure. 

MR. ROBERTS: I do, yeah. I'm going 

to start adding folks to room seven now, so you should 

see an invite momentarily. And again, if I forget 

anyone, Jo, I'll add you last. Just feel free to remind

me. 

MS. JEFFRIES: Okay. So, we can go 

ahead and pause the live stream. 

MR. WAGNER: Welcome back. It's 1:28

p.m. Eastern and the caucus is back in the main room. Is 

there anything that anyone would like to report out that 

was in the caucus?

MS. BLONDIN: Yeah, so I'll just say 

that we had a good conversation and really appreciated 

the Department staff engaging in this discussion about 

asynchronous and its definition and how that's going to 

impact programs moving forward. Of course, quality is 

the most important aspect, and that is a concern here as 
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well. And we recognize that. And then also the 

Department said that they had concerns about how to 

enforce some of these emerging issues. We also talked 

about utilizing best practices and engaging stakeholders 

in this conversation. And so, with that, I'll ask David 

Musser if he would like to share more information from 

the Department's perspective. Thank you. 

MR. WAGNER: Thanks, Jo. 

MR. MUSSER: Thanks, Jo. So, I do 

appreciate the discussion that we just had in evaluating 

the original proposal that we received to put a limit on 

the percentage of a program that could be offered through 

asynchronous clock hours. As I mentioned, we didn't 

think that that was sufficient given that the 

Department's concerns are really focused on asynchronous 

clock hours generally, and 50% is a significant portion 

of the program. We don't think that a percentage 

threshold would work. However, we heard from the 

committee that there were a number of folks who were 

interested in offering alternative guardrails to this 

that could help with some of the Department's concerns. 

And I wanted to reiterate sort of what our concerns are 

here. So, we're primarily concerned with the use of 

asynchronous technology to count clock hours toward a 

student's Title IV eligibility when there is no academic 
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engagement or active learning happening at the student 

level. That could take a variety of forms. And there is 

an incentive for schools that might be cash strapped to 

do that in order to avoid having to use complicated 

technology to track every single clock hour. So, the 

Department's concern is first narrowly focused on that, 

meaning how you ensure that the hours that are counting 

toward Title IV eligibility, which are intended to be 

part of active engagement and learning by the student, 

include that level of engagement and are being monitored 

appropriately by the institution. So, the student can 

just push a button and walk away and get six hours of 

credit toward their next Title IV disbursement. The 

larger issues of academic quality sort of blossomed from 

that narrow concern, because if a school is allowing 

students to earn clock hours simply by pushing a button 

and watching some videos or not watching it, in the 

worst-case scenario, that calls into question the 

strength of the program and what the student is really 

gaining from that experience. Now, we heard some 

concerns about fully discontinuing asynchronous clock 

hours. The Department proposed that because we were 

unable to come up with guardrails for example, on the 

technical side, that would be effective at preventing the 

things that we're concerned about while also not being so 
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complicated that they're almost impossible to enforce and 

difficult even for schools to implement. So, we are open 

to suggestions about reasonable guardrails that could 

mitigate the Department's concerns in this area. Those 

could be technical. Although as I mentioned, the 

Department has concerns about things being too 

complicated. So, we wouldn't want to have too much in 

that respect. But they're also related to the difficulty 

of enforcing this requirement, which is highly technical, 

requires a lot of resources to ensure whether a school is 

doing it well, and frankly requires someone with 

expertise to go in and actually ascertain whether a 

school is doing it. But I think there's a recognition 

from the community that could be accomplished through 

other organizations having more upfront reviews of this 

process, evaluating it at regular intervals in some way. 

So, we're open to those sorts of things as well if there 

are suggestions from negotiators regarding how these 

concerns could be mitigated. So, for all those reasons, 

the Department is willing to postpone the consensus vote 

on this topic until Thursday if negotiators indicate that 

they are interested in providing those kinds of 

alternatives by Wednesday at noon, so that we can 

evaluate them and make decisions and then come back the 

next day. Now, one other thing I want to mention. The 
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Department's current proposal only prohibits asynchronous 

clock hours. It does not prohibit synchronous clock 

hours, so make sure that you focus on that with any 

recommendations that you make. 

MR. WAGNER: Barmak, go ahead. You 

have the floor. 

MR. NASSIRIAN: I appreciate the 

Department's open mind, and I certainly will strive to 

keep a similarly open mind. But I have to tell you, this 

may be a wild goose chase, because what we are talking 

about is the substitution of some sort of amorphous, 

unspecific technology somewhat better than recorded 

videos for instruction. And as you just pointed out, 

Dave, we are talking not about a traditional curriculum 

in which recordings, interactive CBT-based language 

training, whatever, could be just a component of the 

broader package. But we're talking about a program that 

is literally measuring by the hour and is seeking to 

replace instruction time with canned content. And we are 

once again being invoked as a utopian solution with no 

specificity as to exactly what it is that is being used 

to substitute for actual faculty interaction. We'll keep 

an open mind. But this is sort of like attempting to 

agreeing that something is wrong and I'm no aspersion on 

this concept, but it's sort of like trying to create 
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ethical bribery. The concept is incompatible. You 

either have instruction or you don't. And if you don't 

have instruction, you don't have instruction. This 

doesn't mean these programs can't use YouTube. Yes, 

there are plenty of good added content online, and people 

should be directed to them as adjuncts, as additional 

support material. But that does not allow somebody to 

charge tuition on the taxpayer's nickel and the student's 

nickel for canned content. So, we'll be open to see what 

kind of a technological solution is going to overwhelm 

the obvious here. And we can vote on Thursday. But I 

just find it very problematic that the Department is even 

considering anything but cleaning up this mess by saying 

instruction is instruction. Thank you. 

MR. WAGNER: Scott, go ahead. 

MR. DOLAN: I mean, I went back and 

forth on whether I would even respond. Barmak, I 

understand your perspective, but I think we also need to 

have a very frank conversation about how learning occurs 

and how the delivery of content, including the curation 

of that content is a component, right? Contact hours, 

one hour of direct instruction for every two hours 

outside of the classroom. A book which is a 

technological advancement is canned content that has been 

created to transmit knowledge. Instruction would be I 
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choose which books you should read. I assess how well 

you understand that book. And I look at that book 

alongside all the other books that I've assigned within 

my classroom. We're talking about innovation around 

teaching and learning, of which technologies of all kinds 

have helped us provide more and more access than we've 

had previously. It doesn't mean that we shouldn't also 

be paying really close attention, which you've raised on 

a number of occasions, to the quality and the outcomes 

associated with those experiences. But let's talk about 

that. Because inputs can come from a variety of 

different perspectives, and we can use technology in 

really exciting and innovative ways to support students 

in ways that we haven't previously. So that's my only 

response. 

MR. WAGNER: Thank you, Scott. 

Barmak, your hands up. 

MR. NASSIRIAN: Briefly. Scott, I 

understand. Yes, there is plenty of knowledge in books. 

Curated content in the old days used to be called the 

curriculum, not instruction. DC can weigh in on this 

one. Are we playing semantic games here? I think we 

are. You know, the great Library of Alexandria was a 

library. It wasn't a University of Alexandria. Just 

because you have canned content in books, on tape, on 
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servers, on YouTube, that does not make it a learning 

facility. It makes it a repository of information, and 

it's disorganized or it's curated, and curation has a 

value. It's called a curriculum. It is not instruction. 

MR. DOLAN: And we're not removing 

instructors from these programs or active engagement. 

We're saying that this would be a component that's a 

supplement, right? So that's the conversation. I look 

forward to working [inaudible]-

MR. NASSIRIAN: I agree with that. 

That's great. If you do that, we're on the same page, 

but you're trying to count the hours when the instructor 

is absent as hours of instruction. That's the problem. 

Otherwise, I have no objection to having 150 hours, 300 

hours, 600 hours of instruction with massive amounts of 

additional support being wrapped around it. That's not 

the issue. It's whether that minimum number, that 600 

hours is instruction time or all the support stuff around 

the mark. 

MR. DOLAN: So, I appreciate your 

openness to a compromise. 

MR. WAGNER: Denise, I see your hand. 

MS. MORELLI: I just wanted to keep 

everybody's focus to that we're talking about clock-hour 

programs, right? There is a difference between clock-
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hour programs, traditional clock-hour programs, which are 

the hands-on programs and other credit-hour programs, 

which might be the lengthier degrees that you get in 

various areas and then the students that I've dealt with, 

and I've spoken to hundreds of students and not just this 

issue, but somebody brought it up in the caucus, they're 

paying for a program, right? And they're paying for a 

hands-on program. And a lot of times we're talking 

cosmetology, you're talking HVAC, you're talking a bunch 

of different things like that that we're dealing with 

here. So, I just want to make sure everybody remembers 

that we are talking about a specific set of programs and 

not everything, and that a lot of times we are talking 

about hands-on instructions necessary for them to get a 

job in the field, for them to pass a licensure exam. So,

I just wanted to make sure everybody remembers that we 

are focused on a set program. 

MR. DOLAN: I will say that hands-on 

is necessary, but not sufficient, right? So, when I 

teach an electrical engineer, I don't tell them to go use 

electricity right away. I ask them to read a little bit 

about how that operates in practice and abstract in 

theory, right? So, there are theoretical and didactic 

components to this work, and that supplements the handson stuff. So, I understand completely the programs that 
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we're talking about. I'm just saying that the learning 

that we can use as an input can come in a variety of 

different forms. So, I appreciate. 

MR. WAGNER: I appreciate the 

discussion. I'm going to hand it over to Greg. Greg, 

where should we go at this point in light of the 

postponement?

MR. MARTIN: Okay. Well, first of 

all, David, do you have anything else you want to discuss 

with respect to distance education before we move on?

MR. MUSSER: No, I think we're good. 

Thank you, Greg. 

MR. MARTIN: Okay, a couple things. 

The Department's going to request a brief caucus before 

we begin state authorization. Before I do that, there 

were a couple of issues that were on the table generally 

before we broke for lunch. And one was a request that 

the Department consider whether taking consensus by topic 

or by issue paper, whether distance education be willing 

to take consensus votes on individual sections of that 

issue paper of that topic. And our response to that is 

that no, we are going to continue to take consensus votes 

based on the entire topic. Our reasons for that are we 

feel that doing anything else would violate the spirit of 

negotiations. And we don't look at whenever we propose 
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language on a specific topic, we don't look at it in 

terms of just you can accept one line or not another 

line, or I'll take this, but not that. We, look at it 

holistically. So, we believe that it is necessary and 

desirable to take the consensus vote on each topic. So,

although I can certainly appreciate the concerns voiced 

and that it might be possible where consensus could not 

be reached on an entire topic to reach it on various 

parts. But for all the reasons mentioned, I don't think 

that's the advisable way to go. So, we're going to stick 

with consensus on each topic. The other question we had 

was, once these negotiations are concluded, would it be 

possible for negotiators to continue to submit 

documentation to the Department for consideration? The 

negotiations aren't for the negotiations to be done in 

good faith, they need to be completely transparent. And 

that's what this negotiation process is all about, so 

that during that process, everybody, not just those of us 

on the committee, but the public, all concerned 

individuals can hear what's being discussed. The

Department takes great pains during this process not to 

discuss these matters with people outside of these 

negotiating sessions. Once the negotiations are 

concluded, they're concluded. There is no more 

negotiated rulemaking as part of the process. At that 
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point, we move on to putting together a notice of 

proposed rulemaking, and then there will be an 

opportunity for people to comment on those proposed 

rules. At that time, once these negotiations are ended, 

there's no restriction on anybody sending anything to us 

that they want to. We do have another mechanism where 

parties can request meetings with us to give us their 

viewpoints on certain topics. However, the negotiation 

process will end on Thursday such that the Department 

would not be taking additional submissions and using 

those the way we do during the negotiation process. So,

with that said, we are going to take a 15-minute caucus 

for the Department to have some discussions prior to 

state auth. I'm sorry, David, do you have something you 

want to say?

MR. MUSSER: Yeah, apologies, Greg. 

Real quick. 

MR. MARTIN: No problem. 

MR. MUSSER: So, I heard in the chat 

from several negotiators who wanted to return to some 

language about the virtual location concept. So, let me 

ask you, actually, Greg, do you want to do that before we 

caucus between the issues?

MR. MARTIN: I think so. If there 

are other areas of distance to be discussed, I think we 
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should discuss those before we go to the caucus, 

certainly. 

MR. MUSSER: So then actually, I'll 

have Vanessa bring up the language around virtual 

locations so that we can take a look at that as we talk, 

and then I'll just remind everyone quickly what the 

proposal here is. The proposal is to add a definition 

under the definition of an additional location that 

refers to a virtual location in which the institution 

offers 100% of an educational program through distance 

education or correspondence courses, notwithstanding 

requirements for students to complete on-campus or 

residential periods of 90 days or less. I'll turn it 

back over to the committee for additional comment on 

this. 

MR. WAGNER: Any comments? Jamie, I 

see your hand. And you're muted. 

MS. STUDLEY: I would defer to the 

institutions who understand this better. But I'm just 

trying to tell on this virtual location, my understanding 

was that it was so that the Department could get 

information about outcomes and performance of students 

who are pursuing their education in a distance form. And 

that it was primarily or entirely a pathway to subdivide 

the population and understand the outcomes. But I've 
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been asked whether this would be needed, given that 

through another provision that we just looked at, the 

Department would be getting a new kind of reporting about 

distance students and their outcomes. Is this addressing 

the same problem? Is this still needed or is this 

virtual provision here necessary for the Department to 

get the information that it's looking for to understand 

the results for student achievement from distance 

education programming? It's the articulation of this and 

the provision that we worked on this morning. 

MR. MUSSER: Thanks, Jamie. So, the 

virtual location proposal was intended to achieve, I 

guess I would say three different ends. The first one, 

which is probably the biggest one, is the one that you 

just mentioned, which was to obtain better information 

about individuals that were enrolled in distance 

education so that we could better understand which 

programs they were in, where they were actually from but 

that all of those kinds of things that were related to 

enrollment in a fully distance education program. 

However, we also have a separate concern about cases 

where an institution ends all of its distance education 

offerings. There have been some reports that some 

institutions are relying heavily on outside providers of 

resources that are used to provide online programs. If 
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one of those providers ceased to exist suddenly, a school 

could find itself in a position where it's not offering 

distance education at all anymore. It doesn't have the 

capability of doing so, which in that case, under the 

concept that we were proposing, the school that the 

students who were in those distance education programs 

when they were abruptly discontinued, could qualify for 

closed school discharges. That is the main secondary, 

but still very, very important piece that we were trying 

to accomplish with the concept of a virtual location. 

And that cannot be accomplished with merely obtaining 

information about students at the student level through, 

for example, NSLDS enrollment reporting. The third one 

is really an understanding of the reach of fully online 

programs, which fits into the very first one, but it is a 

sort of separate consideration. The Department wants to 

understand where schools are providing their programs.

And it's hard to know that by simply knowing how much the 

student took in a particular semester or a particular 

period. Knowing that they are enrolled in a fully online 

program tells us more about that than the other piece. 

And so, I'll stop there. 

MR. WAGNER: Thank you, Dave. I did 

want to mention that David Cohen was in for Jillian, 

representing proprietary institutions, and he has his 
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hand up. So go ahead, David. 

MR. COHEN: Just in the construct of 

the earlier requirement or that the Department was 

seeking that accreditation visits include all locations 

and branches, it would be the Department's expectation 

that we would be visiting every online location as well, 

now that we'd be forming virtual campuses or considering 

them as separate locations?

MR. MUSSER: No. I think we did 

briefly talk about this. I don't think we got into much 

detail in an earlier session, but the Department's intent 

here is that whatever requirements you're subject to 

currently with your accreditor and your state in order to 

offer distance education and the Department which has a 

much more limited requirement, you would still need to 

meet. And by meeting those and documenting that you've 

met those in the way that you currently do, you meet the 

requirement. There's no requirement, for example, a 

separate accreditation visit to a virtual campus. The 

requirements for distance education for oversight of this 

remain the same. That's the intent here. So, this was 

primarily a mechanism, as I mentioned, of doing those two 

broad things, improving our understanding of students who 

are enrolled in distance education and receiving Title IV 

funds and ensuring that they can qualify for closed 
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school discharges. Yeah. 

MR. COHEN: And would it change your 

perspective if the online was run out of a separate 

building in a separate location or it doesn't change that 

analysis?

MR. MUSSER: No. 

MR. COHEN: Okay. Thank you. 

MR. MUSSER: I want to quickly 

respond to a comment by Scott that the mention of thirdparty providers that provides more context than what we 

provided in January. We did mention in our original 

issue paper that closed school discharges were part of 

our rationale for developing virtual locations and that 

sudden closures of distance education programs were an 

important piece of that. In recent months, it's become 

clearer in the news that third-party providers may in 

fact, not always be available to institutions that rely 

on them. And also, it's not just that, it's certainly 

that institutions may decide to discontinue the distance 

education offering themselves. It's really both of those 

things that we're concerned about from the student 

perspective, where we want to ensure that they get 

similar protections to what students get when their 

physical location closes. 

MR. WAGNER: Alright. Thanks, Dave, 
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for the follow-up on that one. Are there any other new 

comments related to virtual location language? Okay. I 

don't see any hands oh, one hand, there we go. Jamie. 

Jamie, you're on mute. 

MS. STUDLEY: Simply that the word 

location might be misleading. Just following up on 

David's comment. I wonder if there's some way to call it 

a word that's not used anywhere else or indicating that 

it doesn't trigger any other place that refers to 

location. So otherwise, we'll be counting locations and 

getting these in a way that could be confusing. 

MR. MUSSER: Thanks, Jamie. Yeah, I 

very briefly discussed this earlier, but it probably 

deserves some additional discussion, especially in the 

accreditation context. I don't think we can change the 

term as it's used here, because that is the key term that 

allows us to qualify students for discharges under the 

closed school regulations. However, we could be clearer 

in the accreditation rules that these are not among the 

locations that accreditors have to evaluate using the 

same requirements that they do for all locations. 

MS. STUDLEY: Right. You might also 

consider whether you want them counted or not counted. 

For example, how many additional locations does your 

favorite school have? Do you want to get a report of the 
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things that you're creating for data purposes, or would 

that throw off your understanding of the nature of the 

field? I'll leave it there. You get it. 

MR. MUSSER: Okay. Yeah, and I would 

mention that we do say physical locations in the 

accreditation rules to try to distinguish between these 

two things so that we don't get too much confusion there. 

Other comments on this language?

MR. WAGNER: I don't see any hands, 

Dave. Greg, we last spoke with you. You had requested a 

15-minute caucus for the Department before we dive into 

state authorization. Do you still want to do that now?

MR. MARTIN: Yes, please. 

MR. WAGNER: Okay. So, we can stop. 

Barmak, can you hold that comment, or is it something 

related to theMR. NASSIRIAN: Related, in the 

interest of saving time, a group of us would appreciate 

an opportunity at the end of the Department's caucus to 

meet with the Department. This way, things will go more 

quickly instead of coming back and making the request at 

that point. 

MR. WAGNER: Okay, thanks. 

MR. NASSIRIAN: Can I just send the 

list to you, Kevin?
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MR. WAGNER: Sure. 

MR. NASSIRIAN: -request that 

Department? Thank you. 

MR. WAGNER: Yep, yep. AndMS. JEFFRIES: Just Kevin. Hang on. 

Barmak. Let Brady set up, he's got the caucus for the 

Department. But could you, before we break livestream 

now, call off the names of the people who you want to 

meet with the Department so it's a matter of record so 

the public that's viewing is aware?

MR. WAGNER: Thanks, Cindy. 

Appreciate it. 

MR. NASSIRIAN: Of course. So, I 

would request that the group include myself, Carolyn, 

Emmett, Diana, and Robyn. And also, the alternates as 

appropriate. 

MS. FAST: And the Department, or no?

MR. NASSIRIAN: And the Department, 

obviously. We want to join the Department. Yes. 

MS. FAST: Gotcha, gotcha, gotcha. 

MS. JEFFRIES: So, GregMR. NASSIRIAN: We can talk to each 

other all the time. 

MS. JEFFRIES: Greg, from the 

Department side, when you're finished with your caucus, 
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then Barmak requested this caucus with the Department, 

who would you want in that?

MR. MARTIN: I- Barmak, was your 

intent- well, Barmak is calling it. There were specific 

individuals at the Department you wanted, Barmak, besides 

me?

MR. NASSIRIAN: I defer to you, but 

the topic will be state authorization.

MR. MARTIN: Okay. 

MR. NASSIRIAN: All the appropriate 

colleagues are welcome to join. 

MR. MARTIN: Alright, Cindy, well, 

then it would be me, it would be Denise Morelli. And 

also include David Musser in that as well. 

MS. JEFFRIES: Okay. 

MR. NASSIRIAN: And it'll be very 

brief. No more than ten minutes, 

MR. MARTIN: Okay, that's fine. 

MS. JEFFRIES: So, I'm going to ask 

that for the ease of this, that when you're done, Greg, 

with your Department caucus, come back to this room and 

we'll move you into the other room at that point in time. 

MR. MARTIN: Okay, that's fine. 

MS. JEFFRIES: So, the public knows 

what the process is going to be, why we're pausing the 
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live stream. Okay? 

MR. MARTIN: Okay, excellent. Thank 

you very much. 

MS. JEFFRIES: Thank you. 

MR. WAGNER: Welcome back, everyone. 

It's 2:35 Eastern, and we had two caucuses that just took 

place. And before we get started on state authorization 

in between, I did see that Jamie had a question on 

virtual location. Jamie, do you still have a question 

related to that before we move on? Okay. Let's see, 

Jamie. Alright. It is in the chat. And in that case, 

since there were a couple caucuses with the participants 

and the negotiators that were in the caucuses like to 

report out on those caucuses. 

MR. NASSIRIAN: I requested the 

second caucus with the Department and of student consumer 

advocacy groups. Throughout the negotiations on this 

topic, we have heard concerns about institutions with 

regard to state authorization and the sort of expansion 

of authorization requirements to many more institutions. 

In the spirit of compromise, we have submitted something 

that the committee should have. Carolyn submitted a set 

of proposals on our behalf to the committee. I think 

they have been distributed, but we just wanted to explain 

to the Department that the purpose of our proposal is to 
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attempt to relieve the largest number of institutions 

where we have seen the fewest types of challenges and 

problems from the state authorization mandate. So, the 

two categories that we have suggested to the Department 

would include institutions recognized through state 

legislation. Currently, there is a five-year sunset on 

those institutions being deemed authorized. We want to 

make sure that the states have the option of recognizing 

institutions through political acts like legislation or 

granting of charters. And the other has to do with the 

founding of the institution, the history of the 

institution's participation in these programs. 

Currently, there is a 20-year timeline with a five-year 

sunset being proposed. We suggested to the Department 

that institutions founded prior to the enactment of the 

Higher Education Act of 1965 should simply be allowed to 

be exempted permanently. Obviously, we don't want to 

circumscribe the state's right to require particular 

authorization requirements, but we also want to enable 

the states, if they so choose, to exempt institutions 

that have existed prior to 1960, to the enactment of the 

Higher Ed Act, provided that there has not been a change 

of ownership because we do not want institutional 

founding dates to be sold like taxicab medallions, we 

want to make sure that the institution that was founded 
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has remained essentially unchanged in terms of its 

control and ownership. So those are the two exemptions 

we are proposing. This is a little more complicated. We 

are suggesting that we can share some data with the 

committee on this. We noticed that the number that the 

Department has placed in terms of the ceiling on 

utilization of reciprocity for institutions based on 

enrollment is 500. We ourselves have even thought in 

terms of larger numbers before this. But we did some 

research, and it turns out that the footprint of the vast 

majority of institutions is actually far smaller than 

that. And again, we think the whole point of reciprocity 

is to enable a minor participation or incidental 

footprint of institutions so that, you know, a tiny 

liberal arts college that happens to have two students in 

a given state isn't forced to go directly to obtain 

authorization from that state or a community college that 

may have a particularly appealing program that happens to 

attract, you know, five students from another state 

shouldn't have to go seek direct authorization. We want 

to make sure that the reciprocity mechanism is really 

intended as a convenience for those purposes, as opposed 

to a back door to direct authorization from the state. 

So, we are proposing that the number be dropped to 

whatever is appropriate. Based on our digging, we think 
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even 100 may be the right number in a given state, but we 

would encourage the Department to do its own research and 

pick a number that makes sense to exempt institutions 

that don't purposefully go through reciprocity simply to 

circumvent direct oversight to take advantage of 

reciprocity without undermining the state's right to 

regulate delivery of education to the various state 

residents. So that's the suggestion. One adjunct to 

that suggestion is that as we plug more institutions into 

direct authorization, we have suggested kind of a runway 

of a few years to enable the state to enact appropriate 

rules to ensure that there is a mechanism for out-ofstate institutions to obtain direct authorization. Some 

states don't have those mechanisms, and it takes some 

time to put those things in place. The Department has 

not reacted to any of our proposals. Nor did we expect 

them to react. We just wanted them to understand what we 

were doing and why we were doing it. And again, all of 

this was in our proposal submitted to the entire 

committee. But we wanted to make sure that the 

Department kind of took note of our attempt here. Thank 

you. 

MR. WAGNER: Thank you, Barmak. 

Alright. In light of that, Greg would you like to get 

started with state authorization?
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MR. MARTIN: Sure. Before we do 

that, the Department's caucus was basically just to 

discuss the fact that the proposal Barmak just referenced 

had been submitted to us. So just to apprise all the 

Department people that it was there and just to look at 

it. But then subsequent to that, they had requested a 

caucus from us. It was pretty much on the same thing. 

So, with that, we'll begin our discussion of state 

authorization. We've got a little less than an hour 

because we do have to go to public comments at 3:30, but 

we can get started with state authorization. I'm not 

optimistic about concluding within the next 45 minutes. 

So, the discussion will begin again tomorrow. We 

originally had TRIO scheduled for first thing tomorrow. 

I don't know exactly what we're going to do with the 

schedule there, whether we'll continue this discussion 

tomorrow prior to TRIO or break for TRIO. So, I'll wait 

for confirmation from my people behind the scenes as to 

how that will work. But we will start with state 

authorization this afternoon. And I see Vanessa has 

pulled up the paper here. I'll give everybody a chance 

to get that up for them. We have made a number of 

significant changes to the regulatory text and state 

authorization based on the previous proposals that we did 

receive. And to clarify our intent, since there was some 
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confusion related to what went on in session two, and I 

will do that, but first, I want to walk through some of 

these changes, and then we'll address some of the 

questions that came up during the previous sessions 

before opening it up to discussion. So, the first place 

I want to start here is in (a)(1), 600.9(a)(1). Let's go 

there. Okay. Thank you, Vanessa. So under (a)(1), we 

clarified the language to say that the Department 

considers the institution legally authorized in the 

state, if the state requires the institution to comply 

with the applicable state authorizations or licensure 

requirements and applicable state laws and regulations. 

Remember that we addressed the exemptions and reciprocity 

separately in its own section. So, let's take a look at 

the actual language here. And you can see here that an 

institution described under 600.4,600.5, and 600.6 is 

legally authorized by a state if the state requires the 

institution to comply with any applicable state 

authorization or licensure requirements, and all 

applicable state laws and regulations. Next move to 

600.9(a)(3). Thank you, Vanessa. Here we address the 

exemptions. We clarified the language. We're under 

existing regulations. Certain institutions may be 

exempted based on accreditation for years in operation. 

We've clarified the language to say that these exemptions 
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will expire on July 1, 2030. This is the same proposal 

from session two. But there was some confusion about the 

way the language was written. Finally, we've added 

language that for an institution that is currently exempt 

from requirements undergoing a change of ownership, the 

institution must get approval from their state where it 

is considered authorized and seek initial approval for 

state authorization. As mentioned previously, this has 

been an ongoing concern for the Department since our 

regulations require institutions get approval from their 

state for a change in ownership, but because the 

institution is exempted, this required approval is not 

occurring. For these institutions, they will not get

approved until 2030; they will be required to go through 

initial approval as part of the change of ownership. 

Again, we do not deal with reciprocity in this section

and instead address everything pertaining to reciprocity 

in its own section. So, let's just take a look here at 

the actual language in 600.9(a)(3). The additional 

language we have here. Okay. And yeah, arrow down a 

little bit there, Vanessa, to where we start with the new 

language, right. So you can see there the institution 

may be exempted from requirements for initial or renewed 

application for authorization or licensure if its 

[inaudible] statute, constitutional provision, or other 
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action issued by an appropriate state agency or state 

entity, establishes the institution by name as an 

educational institution and authorizes it to operate 

educational programs beyond secondary education, 

including programs leading to a degree or certificate, 

though this exemption shall expire on July 1, 2030, or if 

state action exempts the institution based on the 

institution's accreditation by one or more accrediting 

agencies recognized by the Secretary, or based on the 

institution being in operation for at least 20 years, 

though this exemption shall expire on July 1, 2030. An 

institution exempt from initial state authorization or 

licensure requirements under this section that undergoes 

a change of ownership shall not be exempted from the 

requirements of 34 CFR 600.20(h)(3) romanette two, which 

requires the institution receive approval for the change 

of ownership from each state in which the institution is 

physically located, or for an institution that offers 

only distance education from the agency that authorizes 

the institution to legally provide postsecondary 

education in that state, and (b) seek approval for the 

state authorization. Next, we'll move on to changes 

under 600.9(d). Under 600.9(d), we address state 

authorization requirements for an institution offering 

distance education in another state through a reciprocity 
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agreement. Remove language that was under exemptions to 

state that the institution may be exempted from initial 

state authorization or licensure requirements in that 

state. During session two, we asked how we might address 

education-specific laws that we might consider allowing 

states to enforce if they choose, through reciprocity. 

After considering feedback, we decided that instead of 

defining which state laws should be allowed to be 

enforced regardless of reciprocity, we instead focus on 

which requirements we would consider exempt from 

enforcing which works towards an institution's benefit in 

reducing burden through reciprocity. 600.9(d)(2) 

romanette one. We state that a reciprocity agreement 

must allow any member state of a reciprocity agreement to 

enforce its own state laws and regulations, if it 

chooses, outside of the initial approval for state 

authorization, except for authorization and application 

fees and processes. We welcome negotiator input onto 

what else we might include in this list of exceptions. 

We remove the language that was duplicative and created 

some confusion on allowing states to accept, investigate, 

and resolve complaints. We think that is addressed in 

the existing language. Finally, we took a modified 

version of the proposal suggested by several negotiators 

to require that an institution operating above a 
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particular size threshold within a state be required to 

go through full authorization in that state. Under 

600.9(d)(4), we propose that any institution enrolling 

more than 500 students in a state participating through 

reciprocity would be required to undergo authorization in 

that state. We think there is value in requiring that 

institution with a large footprint in a state be subject 

to state laws in considering an appropriate threshold. 

We look to our existing regulations and 500 students as 

the threshold we use under our cash management 

regulations related to tier one arrangements. We welcome

negotiator input on that threshold. So before opening up 

the floor to comments here, a couple of things I would 

like to address regarding questions that we received. 

The first is what problems we are trying to address 

allowing states the choice to enforce certain laws and 

how these are different from our original proposal on 

complaints and governance. The language you see before 

you is based on those concerns. We stated from the 

beginning that we are concerned that the structure of 

reciprocity agreements has shortcomings that fail to 

protect students and taxpayers, and that reduce state's 

oversight of institutions. This is also not the first 

time the Department has considered this exact problem. 

Most recently finalized certification procedure rules 
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reflect this as well. After hearing concerns and 

compelling reasoning from negotiators about how states 

are limited in enforcing those recently finalized rules, 

the Department is proposing to readdress the issue here. 

We are trying to balance the goals of ensuring that 

institutions have a reasonable path to offer distance 

education to students who do not reside within their 

borders, by ensuring that institutions are not subject to 

most burdensome requirements while ensuring states have 

the choice and ability to protect their students where 

they see appropriate. We are addressing ongoing concerns 

from some states who have been limited in their ability 

to apply their own laws and to protect their residents. 

We've been asked whether our language would disallow 

SARA's current policies preventing states from enforcing 

specific requirements. The short answer is no. Our 

proposal is not specific to SARA or disallowing any such 

agreement. Ultimately, it will be up to states to make 

the determination on whether they choose to enforce their 

specific laws. As mentioned by several negotiators, we 

expect many, if not most states to decline to avail 

themselves of this enforcement option. However, we do 

think it is important to allow states the ability to 

enforce their laws if they choose to do so, and we are 

aware of at least one state legislature that is 
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specifically considering legislation to better enable 

them to protect their students who are enrolled out of 

state. On state exemptions, we received one question on 

the problems we are trying to solve, or we see several 

questions rather on the problem we're trying to resolve. 

As mentioned in issue paper one, the Department is 

concerned that existing state authorization regulations, 

which allow states to exempt certain institutions from 

state approval and licensure if the institution is 

accredited by an accreditation agency, recognized by the 

Secretary, or if the institution has been in operation 

for more than 20 years, do not ensure sufficient state 

oversight of those institutions. State exemptions of 

certain categories of institutions from approval weaken 

the program integrity triad for institutions that want to 

participate in the Federal aid programs, making students

and taxpayers vulnerable. The Department has seen 

examples of abuse, such as misrepresentation that should 

fall under state authority and enforcement, but currently 

do not. As a result, students must sue in order to 

obtain relief. So, with that, we'll go back and open the 

floor for discussion from the negotiators. Thank you. 

MR. WAGNER: Erika, I see your hand. 

Go ahead. 

MS. LINDEN: Yes. Thank you for the 
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explanations of the position that the Department is 

currently espousing. I do want to make one comment. For 

those of us who are really visual learners, it was hard 

for me to follow and integrate everything that Greg just 

said as the rationale for where we are today. And I just 

want to say, if I ask a question for which you tried to 

already answer that I just beg your forbearance on that. 

I want to start with a couple of questions. On 600.9(a), 

excuse me. The existing regulations refer to exemption 

from state approval or licensing requirements. The 

proposed ones refer to state authorization or licensing 

requirements. Could you just comment about that change 

of terminology? And as you're doing that, just keeping 

in mind that there is great inconsistency across the 

triad for using terms like reciprocity or excuse me, 

authorization, recognition, certification approval, 

license to operate. And perhaps if you talk a little bit 

more about that or further define, that will be helpful 

for us to understand the intent on this exemption issue. 

So that's one. 

MR. MARTIN: So, we're looking at 

600.9 - 600.9(a)(3). Is that what you were talking 

about?

MS. LINDEN: Sorry, I'm a visual 

learner, so I have to look at my page. 
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MR. MARTIN: Okay. 

MR. MUSSER: Vanessa, could you bring 

it up on the screen? Sorry, Greg. 

MR. MARTIN: Bring up 600.9(a). 

MS. LINDEN: 600.9. 

MR. MARTIN: And the new- yeah, the 

new- yeah, there's the new, the new [inaudible 02: 02: 

07]

MS. LINDEN: Yes, they're in the 

middle of the page. State authorization or licensure. 

And if you scroll down a little, you can see what that 

replaces is state approval or licensure. Where it was in 

(b). 

MR. MARTIN: Okay. You're talking 

about where it says (b) here. Let's just go down and 

look at the institution. So that previously read the 

institution complies with the state-approved or licensing 

requirements, except to exempt the institution from state 

approval process. Right. So your specific question is 

why we put what we did up here and the new language in 

(a)(3)? 

MS. LINDEN: Yes. 

MR. MARTIN: I’m not sure I'm exactly 

getting the question. Is there something you don't like 

about the wording? I'm just trying to get to the gist of 
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what [inaudible]-

MS. LINDEN: I'm just trying to 

understand the rationale of your changing a word, there 

must be a reason that you were changing that word. And I 

wanted to understand that better. And I guess it goes 

part to the question I should have prefaced it with this. 

I know this was addressed in 2010 and I guess what's the 

evidence that there have been abuses since 2010 that are 

based on the schools that were approved or the language 

of approval or licensed, and now we're switching to 

authorized or licensed. 

MR. MARTIN: Dave, did you have 

something you wanted to say about that?

MR. MUSSER: In my reading of this 

authorization, I think we were hewing closer to the 

statutory term. I don't think that we had a substantive 

reason beyond that. Approval might be read a little more 

narrowly. But the Department did not have in mind that 

we were altering the kinds of things the state could do 

here to authorize an institution. I look to my two 

colleagues here, but I don't believe that that was the 

intent with the wording change. 

MR. MARTIN: 

MS. LINDEN: Okay. 

MR. MARTIN: And we moved the 
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exemptions to a separate section here so that's why we 

made the change here because we clarified the language 

surrounding exceptions and the expiration of those 

exceptions in a separate section. 

MS. MORELLI: And I think Dave's 

right. The statutory provision says authorize and our 

regulations in terms of the definitions of higher 

education or institutions of higher education. They have 

to be authorized by the state. So, this is just making 

the conformity to match the regulations and align with 

the statutory language. 

MS. LINDEN: Okay. 

MR. MARTIN: But there's not a big 

difference there. I mean, it's in 600.4 or 600.5 and 

600.6. We refer to state authorization for eligibility. 

So, it does conform more with that language. 

MS. LINDEN: I guess in the state of 

Iowa for example, my institution is approved to operate 

in our state by our educational department. So that's 

why I may be sensitive to that use of authorization 

versus approve, because in our state it does have a 

distinction. 

MS. MORELLI: And I think there is a 

distinction what you're getting to in terms of being 

authorized to operate a business in the state. 
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MS. LINDEN: No, this is to operate 

as a higher education institution. 

MS. MORELLI: The Department, I 

think, doesn't see a distinction between the two. 

MR. MARTIN: Yeah. We view those the 

same way. 

MS. LINDEN: Okay. Thank you. 

MR. WAGNER: Okay. I do want to say 

that Rob Anderson is in for John Ware, representing state 

officials, and he has his hand up. So, Rob, take it 

away. 

MR. ANDERSON: Thanks so much. First 

of all, I want to start with some Dave Mason song in the 

70s. There isn’t no good guy. There isn’t no bad guy. 

We just disagree. And I think there's some of that going 

on here. And some of these issues are big. They're 

tectonic plate shifting type of big. This isn't just 

discussions over a ward or two, you know, like the 500 

that we need to change. But I think just some 

fundamental philosophical differences about this moving 

forward. And so, you know, first of all, Greg, I would 

love to get the comments you made at the outset of this. 

I think that would be helpful. It looked as if you had 

them written down, and I don't know if there's any way 

before tomorrow, we could take a look at that because, as 
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was stated earlier, I'm a little more visual. And just 

having that might spur some questions or they might 

eliminate others tomorrow. But anyway, if we could get 

that, that would be great. The language uses the terms 

applicable state laws in a couple of different instances. 

And what I was wondering is what does applicable mean 

here specifically to you? And who decides what is 

applicable? Is it the Education Department, a state, the 

organization administering the reciprocity agreement?

MR. MARTIN: In this context, I'll 

ask for correction from my people if we're wrong. But we 

mean the state, not the organization, would be thiswhatever law, whatever rules the state deems applicable, 

they should not be inhibited from enforcing. 

MR. ANDERSON: Okay. 

MR. MARTIN: But I'll ask for Denise 

to confirm that?

MS. MORELLI: No, that's correct. 

We're talking about the state, what the state deems 

applicable for those institutions. 

MR. ANDERSON: And as far as the 500 

figures, I think I heard you mention that it was aligned 

with the cash management threshold. Is there any reason 

beyond a number that was used for this other thing?

MR. MARTIN: Well, I mean, whenever 
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we deal with, you know, imposing a number, it's got to 

come from any number to some extent a settled upon 

figure, right? In using numbers, we try to use a 

reasonable figure, and we look to other regulations that 

we have. As we pointed out, the 500 threshold comes from 

668.164(f), which is two tier two arrangements. 

[Inaudible] we got the number from. 

MR. ANDERSON: Okay. So okay. 

MR. MARTIN: But we deem it to be a 

reasonable number to have chosen as a threshold for this. 

I'm sorry, Denise. 

MS. MORELLI: No, I was trying to 

jump in, but, so I think, Rob, we were looking at a 

presence in the state, right, and what would be 

reasonable? And we were scouring our regs to see if 

there was any other places where we define that. And we 

looked at the cash management regs and that deemed that 

to be a reasonable number. But I think, as Greg 

mentioned, we're open to other numbers with the rational 

basis, a reasonable basis behind them. 

MR. ANDERSON: Yeah, and you know 

what I'm having trouble parsing, and then I'll be quiet 

for now. There's plenty to say later. It was stated in 

an earlier comment, try not to undermine the state's 

rights. This line between saying we don't want to 
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undermine a state's rights, but if it gets above that 

limit, then we're going to be, in my estimation, 

micromanage the process. We are going to undermine those 

states' rights and decisions that they have made along 

the way and being part of this reciprocity agreement. 

So, I'm just having trouble reconciling those two sides 

of it. And that's why I say I think we have some 

philosophical differences that are pretty significant 

when it comes to this. But I'll be quiet for now. But 

thank you. 

MR. WAGNER: Denise, I see your hand 

up. 

MS. MORELLI: Yeah. I'm sorry, yeah, 

I just unmuted myself again. But I think you got to

understand, Rob, we're trying to weigh the balancing 

between the students and the taxpayer and the states, and 

I don't think anybody thinks that coming up with the 

threshold where the institutions have to get direct 

authorization actually undermines the state's authority. 

And we have to balance that with the students and the 

taxpayer and the integrity of the programs. So that's 

the Department's job here. 

MR. WAGNER: Okay. Thank you, 

Denise. Let's see, I see Jillian's hand up. 

MS. KLEIN: Thanks. I think I have 
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two questions. First, I just want to clarify what I 

think I heard, which is the applicable state laws and 

regulations means literally like every law that the state 

would think applies to higher ed in general. I just want 

to make sure I'm understanding. 

MR. MARTIN: That's correct. 

MS. KLEIN: Okay. So, if that's the 

case, I'm trying to understand the 500-student language. 

I think the way that I'm reading those two together means 

that larger institutions would just not be exempted from 

paperwork. Is that right? So everybody, all online 

institutions would be subject to state laws, but large 

institutions would have to do the paperwork but smaller 

institutions would not. So, can somebody explain to me 

how that's a consumer protection? I'm not being snarky. 

I'm actually just asking that question because I don't 

understand how the paperwork equals consumer protection. 

MR. MARTIN: Well, I think Denise 

just addressed that point earlier. Where a school's

presence in a state exceeds those numbers that we believe 

it's in the best interests of students and the integrity 

of the programs to have the program directly authorized 

by that state. 

MS. KLEIN: OkayMR. MARTIN: David, you had something 
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you wanted to add?

MR. MUSSER: Yeah. Thanks, Greg. So 

I would argue it's not just paperwork. There are 

different individuals who are approving the institution 

when the state itself has to complete the approval 

process for institutions in this proposal that have a 

larger presence in the state. That is a substantive 

difference, and it essentially puts the onus on the 

actual state whose students are being taught by the 

institution to affirmatively approve the institution to 

operate there. So, I think that's the real desire with 

that change. 

MS. KLEIN: And in states where 

there's not currently a process, I think maybe about half 

of states don't really have sort of a process for what 

you're creating here. I would be interested to hear sort 

of the Department's thoughts or openness on what a runway 

would be here. I mean what happens to those students and 

states where maybe the state doesn't have a process or 

they just are not able to complete their program? Can 

you speak a little bit about that?

MR. MARTIN: So, you're talking about 

where a state would be required the thresholds?

MS. KLEIN: Yep, and they don't have 

a process or their process is so long that schools will 
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not be able to comply by the timeline that these rules 

would go into effect. What happens to those students?

MR. MARTIN: Oh, go ahead. I was 

going to say we didn't have a runway provision here, but 

we would be willing to entertain what that might look 

like. 

MS. MORELLI: Right. And now we 

would be willing to accept suggestions on the runway 

time, what is reasonable for those states. But just like 

other situations where rules have changed over the years. 

Jillian, the Department is conscious of students that are 

already in a program or students that are enrolling in 

it, like we've tried to always put runways in so that 

students that aren't harmed are currently enrolled. So,

we would definitely look at a runway. We didn't think 

about putting it at the time, but we would be open to 

that and are open to suggestions. But we certainly don't 

want to harm students that are already in programs, and 

they'd just be out of luck. That's not the way the 

Department has operated, and we don't intend to operate 

that way here. 

MR. WAGNER: Okay. Thank you. Let's 

see, Carolyn, I see your hand up. 

MS. FAST: Oh, thanks. A couple of 

points. One is in connection with the number, what the 
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threshold for students should appropriately be. The 

Department has suggested 500. And we think that number 

might be a bit high because we actually were able to dig 

into the data a little bit to determine, like how many 

schools and sort of what percentage of schools actually 

have that kind of large footprint. And it's actually not 

a very high number of schools that have such a big 

footprint. We put some of this data in submission that 

was circulated a little bit earlier. And I think it's 

interesting to see that the chart that we had just 

circulated, looks at how many students are in exclusively 

distance education in another state, from the state from 

where the school is located but doesn’t' look at each 

state. So for example, schools that have more than 500 

students online in other states according to the data 

that we looked at are only around 8% of all institutions. 

But that's actually more than the number of students that 

would be affected by this threshold, because that would 

be all states. They would look at 500 in each state, not 

500 total, if that makes sense. I don't think I'm doing 

a great job articulating it. My point is that there's 

not a lot of schools that actually would meet this 

threshold in the world of schools. And then also I just 

wanted to just quickly add on to what the Department was 

saying, but also to respond a little bit to Jillian's 
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question about what is the big deal, like, why do we care 

about schools filing paperwork and states? And part of 

the issue that I don't think has been talked about has to 

do with state resources for enforcement. So if you have 

an authorization requirement, there's also usually a fee 

requirement. And so, if you're requiring a school that 

has let's say 20,000 online students in that state, then 

the oversight of that school should fall onto that state. 

But you also want them to have to be able to have the 

resources for the oversight. So, to have that happen, 

you need direct authorization. That's one other reason 

why we think this makes sense. 

MR. WAGNER: Okay, I see a couple 

hands up. Thank you for the comment. I just want to 

make a quick announcement that public comment will begin 

at 3:30 Eastern. So, for those making public comments, 

please make sure the name that you log in is the same 

name that you use when you registered. And please log on 

15 minutes prior to 3:30 and you'll be put in a virtual 

waiting room. Alright. Let's see. I see John Ware is 

back in for state officials, and you have the floor. 

MR. WARE: Thanks. Yeah, I have a 

lot of questions about how you count the 500, but I don't 

think it's going to matter with all the changes being 

proposed, I don't see how reciprocity is really even 
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going to be a thing anymore, because we would have the 

states essentially either rewrite the current reciprocity 

agreement or come up with an entirely new reciprocity 

agreement to incorporate all these changes. In addition, 

most states would have to go back and re-pass laws. I 

know in Ohio, our law that was passed was specifically 

based on the state authorization current reciprocity 

agreement. And, you know, referenced the compacts in 

their control and how things currently run through the 

compacts. So, we'd have to go back and revise that, and 

a lot of other states would be. And again, writing the 

reciprocity agreement in the first place was a two, 

three, four-year process, multiple states, and the 

Council of State Governments was involved. So, I mean, 

with all the current changes that are being proposed 

including changes to the governance structure and the 

requirement that states be allowed to enforce their own 

laws, which, again, that doesn't really sound like 

reciprocity. I don't know what the value would be for 

institutions to participate, number one, and really for 

states as well, because getting back to what Jillian 

said, if I'm going to be required to enforce my laws 

against other out of state institutions, I'm going to 

want those institutions to fill out my paperwork because 

I need to get the information from them in order to be 
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able to enforce my laws. So, I don't know why I would 

waive paperwork requirements if I'm actually going to 

enforce laws against the schools I would need them to 

fill out my application to have the paperwork 

requirements. So, I understand what the Department's 

trying to do here, but I think this would change the 

reciprocity agreement so substantially that I don't think 

institutions and/or states are going to want to 

participate under what's being proposed currently?

MR. WAGNER: Thank you. Erika, I see 

your hand up. 

MS. LINDEN: I'd be a plus one to 

John Ware. Thank you for articulating that. I do have a 

real pragmatic question. I'm trying to think through 

what this actually looks like in implementation, if we 

were to get that far. But how would an out-of-state 

institution know if a state has chosen to enforce or not 

enforce their state laws?

MR. MARTIN: Well, I don't think we 

envisioned a formal process with that. I mean, any time 

a state chose to do that, that's what this entails. 

We're not requiring states to do anything here. We're 

just enabling them to enforce the laws they have. And 

we're talking about laws that deems to be applicable, 

meaning the state has not changed its law specifically a 
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group of institutions. So, I'm not sure what you mean. 

Like, you know, if the school chooses envisioning a 

formal process where the state indicates that.- and I 

mean, one thing I need- I think somewhere else I'm having 

some difficulty here that we're not mandating that states 

do anything here with respect to enforcing their laws. 

It's where the state chooses to enforce their laws, they 

will have the authority to do so. 

MS. LINDEN: But I also think I heard 

you say it's something you read that you don't expect 

that a lot of the states would necessarily choose to do 

that. 

MR. MARTIN: Correct. Correct. 

MS. LINDEN: And again, my question 

is if I have five students enrolled in Ohio, how do I 

know whether I have 505 students in Ohio How would I 

know whether or not Ohio was choosing to require me to 

have the tuition refund amount set aside? I don't 

remember what the terms of that is.

MR. MARTIN: Dave, did you want to 

make a point here?

MS. FAST: Yeah. Oh, sorry. Can Iis it okay for meMR. MARTIN: Dave had his hand up. 

Go ahead. 
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MS. FAST: Oh, please, please, go 

ahead. 

MR. MUSSER: Go ahead, Carolyn, 

before I go. 

MS. FAST: No. I'm so sorry. I 

didn't mean to cut you off. Go ahead, if you wanted to 

address that. 

MR. MUSSER: So, I guess I wanted to 

say one quick thing. I see some comments coming in the 

chat that, well, they're asking two different things, but 

I actually think some of this might be related. One of 

the questions was, why does the Department use the word 

applicable before state laws, since aren't all state laws 

applicable? And other comments were asking questions 

around what were we doing with this language if it seems 

we are requiring states to authorize all of these 

programs? So, I just wanted to be clear that the intent 

behind the word applicable is that the state has actually 

decided to make the law applicable in its legal language 

to an institution or a group of institutions. So, for 

example, if a state says in its laws that have been 

passed by the state that the institutions in this 

reciprocity agreement are not subject to laws one, two 

and three, those laws, one, two, and three are not 

applicable to the institution, whereas they are 
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applicable to a number of other institutions. So, states 

still have the ability to outline in their laws which 

institutions are exempt from these requirements. What 

the Department is doing elsewhere is saying that the

joining a reciprocity agreement and saying we're not 

going to enforce these laws that are on the books is not 

permitted. I just want to make that as a key point. So,

the states have to make affirmative decisions about how 

they're going to participate in these agreements. 

MR. WAGNER: Okay. Thanks, Dave. 

MR. MARTIN: And going back to the 

issue of state surprising entities of their laws, I mean, 

I can see that yes, there is a legitimate concern of how 

schools would be apprised of which laws states deemed 

applicable. However, I would point out that's a state 

process, not a federal process. Through these 

regulations, we would be enabling states to enforce those 

applicable laws. The Department does not force those 

laws, the states do. So that would be a matter of state 

concern, how it telegraphed institutions with students in 

their state. 

MR. WAGNER: Okay, I see Robyn's hand 

up. 

MS. SMITH: Thanks. I wanted to just 

respond to Erika's question. I think the question isn't 
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whether states are enforcing their laws. Every single 

business that does any business in any state needs to 

research and find out which state laws they're applicable 

to. If they have to comply with licensing laws, then 

they need to comply with those laws. There may be other 

types of laws that are applicable. But schools already 

do this that have brick and mortar campuses. They have

to figure out which laws they have to comply with, and 

then they comply with them. It would be the same for 

online institutions. If you're doing business anywhere 

in any state, you need to find out what laws you have to 

comply with that specifically apply to your business and 

comply with those laws. So I'm hoping that's answering 

your question. 

MS. LINDEN: It doesn't because we're 

not just talking about brick-and-mortar institution. 

Before reciprocity became available for our school, a 

medical institution, I had $100,000 in my budget to work 

through the process of getting approved in those states. 

And so, it's not a matter of we could do that, it's a 

matter of is that where the best place to spend $100,000? 

And again, that's knowing that there were a bunch of 

states we didn't have to do anything in. And so, if 

we're talking about balancing, I think we just need to 

balance where that money's coming from. Where did Des 
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Moines University get the money to put in my budget so 

that I could pay a fee to the state of Wisconsin and go 

through a multi-month approval process in order to have 

some students do our master's degree in a mass Hospital 

administration program? Is that the best way for us to 

have spent $8,000 in that state, and $15,000 in this 

state, and $12,000 in another state, and $3,000 in 

another state? That's the balancing act. That money 

comes from tuition. It comes from our diverting funds 

away from things like student aid. So, I just want it to 

be really clear that this is not an institutional burden. 

in the sense of, oh, you know, so sad for me. I have to 

spend a lot of time doing paperwork. It has practical 

implications for what resources schools have to use for 

students and in their best interest. 

MS. SMITH: Okay. And I'd like to 

respond. First of all, I think, you know, the Department 

is saying that schools that enroll a certain number of 

students can be- can get reciprocity and be exempted from 

having to go through every state's authorization process. 

So, I just want to be clear, I think that's what the 

Department is saying, that schools that fall under that 

threshold, which now is 500, that they would be exempt if 

they joined. They could join a state reciprocity 

agreement. And if they do so, they can rely on the 
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approvals of the home state. So, I think that's really 

important. And number two, I understand it's a burden to 

institutions, but it's also really important to remember 

we are talking about students and taxpayers. And we're 

not necessarily talking about public institutions or forprofits. We're talking about for-profit institutions 

that have a long history of being extremely risky 

investments to students, whether they're online or not 

online. That's the problem. And states, that want to 

protect their students should be able to do so and not 

hamstrung by an agreement that won't let them do that. 

And that's where we're at. So, I understand this is a 

burden on institutions, but lots of businesses manages to 

do business in multiple states. And brick and mortar 

institutions have done it for a very long time. So,

there shouldn't be a reason that online institutions 

can't do the same thing. 

MR. WAGNER: Hey, real quick. Just 

want to make a little announcement. We have two hands 

up. I see Barmak, and I see Rob Anderson back in for 

John Ware. I know public comment is coming at 3:30. So 

these will be the last two comments before the public 

comment. Doesn't mean there won't be comments because 

we'll pick up again tomorrow. But I just wanted to let 

everybody know that for now. So, Barmak, take it away. 
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MR. NASSIRIAN: Yes, it's more of an 

observation about Erika's comment. The reason your 

institution doesn't have physical presence in all 50 

states, I assume, is that you have judged it uneconomical 

to lease buildings and go through the processes, 

including finding out what the applicable minimum wage in 

each state may be in order to set up shop in all of them. 

There is a kind of an undertone in this whole 

conversation. Just because the internet enables 

institutions to now hop around the entire country, that 

regulatory costs are just inherently unreasonable and 

unnecessary expenses. And I don't know where that 

assumption comes from, particularly given the history of 

what we know about the internet. Folks, it is easier to 

rip people off on the internet than it is to do so in 

person. Online students need more protection, not less 

protection. They need better regulations. Not weaker 

regulations. So somehow the assumption that the state 

may have specific authorization requirements that you may 

find uneconomical in some cases, that somehow that 

keeping an institution out of a state in which offering 

certain courses in compliance with state rules is 

uneconomical, is inherently unfair and unjust, and that 

is simply not true. Regulatory compliance is a 

reasonable component of the expense of running any kind 
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of an enterprise in a well-regulated state. And, you 

know, in some cases, it's worth spending $8,000 and you 

will spend it. And in other cases, you shouldn't spend 

it. That's a judgment each institution can make for 

itself. And somehow the notion that if you didn't spend 

that $8,000 bucks, all of that money would of course, 

inherently either reduce tuition or improve something 

else for students, is just not supported by any kind of a 

reasonable assessment of how operations work. So, look, 

state authorization is a requirement. Compliance is a 

requirement. And institutions should make their own 

judgments. Just because they can operate in an 

unregulated setting doesn't mean we should deregulate 

everything and have a free for all. 

MR. WAGNER: Thank you, Barmak. 

We're down to about three minutes. So, Rob. 

MR. ANDERSON: Yeah, I'm still up. 

Yeah. 

MR. WAGNER: Okay, Rob, just didn't 

know if your hand went up or down. Go ahead, Rob. 

MR. ANDERSON: Yeah, I'll make this 

quick. First of all, I feel like I make this observation 

every month, and it's just one of those differences in 

those philosophical shifts that would need to take place 

is, states can carry out and enforce their laws, but not 
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within a reciprocity agreement like this. If you don't 

want to abide by what the agreement is, you just kind of 

remove yourself and you don't choose to participate in

this reciprocity agreement, maybe there's another one you 

do, since this isn't just focused on SARA. So, just to 

make that observation, but also within this context, 

something that I'm curious about is with all that's going 

on the DEI front, I think more states are going to get 

really involved in dictating maybe within their own 

education laws, what can and can't be taught, what is 

seen as stifling speech or going outside of bounds. What 

if you have one particular state that wants to enforce 

their laws about what they consider to be divisive 

concepts, and it's the exact opposite of the other 

hosting state in a student’s class, and how do you 

enforce that? Or how would you see this playing out? 

Should that home state say no, that absolutely can't be 

taught, it falls outside of what we consider is allowable 

within our education specific law. 

MR. WAGNER: Thanks, Rob. Scott, we 

have about less than a minute. Can you make your comment 

a minute or do you want to hold it for tomorrow?

MR. DOLAN: I'll hold it for 

tomorrow. Thank you. 

MR. WAGNER: Okay. Thank you, Scott. 
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Appreciate it. Okay. We're just coming up on 3:30, 

which is the public comment. And Brady. Who do we have 

up first?

MR. ROBERTS: Alright, I'll admit our 

first speaker, who is Bob Carey, who's the director of 

the National Defense Committee, and he's in the room. 

MR. WAGNER: Hi, Bob, welcome. Can 

you hear me?

MR. CAREY: I can, can you hear me?

MR. WAGNER: Yes. Welcome to public 

comment. You have three minutes to speak. You'll be 

given notice when you have 30 seconds remaining and your 

three minutes begins when you start speaking. 

MR. CAREY: Okay. Am I going to beI'm waiting, though, to start up, right?

MR. WAGNER: You could whenever 

you're ready to start, you can go. 

MR. CAREY: Oh, okay. Great. Great. 

Well, thank you very much for the opportunity to speak 

today. I appreciate joining your negotiated rulemaking 

committee. Got a couple things I need to talk about. 

One. Look, I'm a retired Navy Captain. National Defense 

Committee works on military and veteran legal and civil 

rights. And we think that one of the most important 

elements is the freedom to use earned educational 
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benefits as we see fit. You know, that's the thing about 

the GI Bill. It's not like a scholar. It's not like my 

ROTC scholarship when I was in ROTC. It's an earned 

educational benefit. I had to sign on for six more years 

in order to be able to get that. And to then have the 

Department and the Department of Veterans Affairs 

exercise what fundamentally looks like condescending 

paternalism towards us and say, you can use your 

educational benefits here. You cannot use your 

educational benefits here. And this is how you have to 

use your educational benefits, is just infantilizing the 

military and veteran students. Most specifically on this 

one, you're discussing now about online and virtual 

education. First, I'm deeply concerned that at the same 

time the Department negotiated rulemaking committee is 

discussing this, the Department of Veterans Affairs is 

doing the exact same thing, but in a different way. So,

to the extent that the Department is talking about 

standardizing this, how is that not going to be 

unstandard or, I guess that's a word, nonstandard from 

what the Department of Veterans Affairs is doing? You're 

just introducing more confusion. The other element is as 

Ms. Morelli discussed and as others discussed as well, we 

seem to be penalizing the 95, 98% that abide for the two

to five percent that are really as bad as you say they 
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are, and there's essentially a false claim on the part of 

these schools and on the part of the students, where's 

the qui tam lawsuit? Where's the False Claims Act 

lawsuit? Where's the prosecution? There was just an 

announcement today of RICO Act charges being brought 

against someone for Medicare fraud with the Veterans 

Health Administration. 

MS. JEFFRIES: 30 seconds. 

MR. CAREY: Thank you. Why aren't 

you doing the same thing here rather than going after 

the students and the schools that are doing the right 

thing? I went to the Naval War College in a virtual 

method. Looking at your regulation, I don't believe that 

my going to the Naval War College would have met the 

requirements that the Department is putting together. It 

sounds to me like you guys need to go back to the drawing 

board on this. Thank you very much. 

MR. ROBERTS: Thank you, Bob. Brady, 

who we have up next?

MR. ROBERTS: Alright, I just 

submitted Mary Beth Bigley, who's here representing the 

National Organization of Nurse Practitioner Facilities or 

Faculties. Apologies. And I believe she is connected in 

the room. 

MR. WAGNER: Hi, Mary Beth. Can you 
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hear us?

DR. BIGLEY: I can hear you. 

MR. WAGNER: Okay. You'll have three 

minutes to speak. You'll be given notice when you have 

30 seconds remaining, and your three minutes begins when 

you begin speaking. You have the floor. 

DR. BIGLEY: Good afternoon. My 

name is Dr. Mary Beth Bigley and I am the CEO of the 

National Organization of Nurse Practitioner Faculties, 

NONPF. We represent over 95% of nurse practitioner 

programs. On behalf of NONPF, I am asking this committee 

to conduct a review of current standards set forth by 

accreditation bodies to ensure that full adoption of 

industry standards. Additionally, I request 

consideration for stronger language in CFR 602 to ensure 

that industry standards are adopted by nursing 

accreditation agencies. NONPF is devoted to promoting 

high-quality nurse practitioner education. A nurse 

practitioner is a registered nurse with advanced 

education as a licensed autonomous practitioner. A nurse 

practitioner diagnoses, prescribes, and manages acute and 

chronic conditions. In fact, a recent CMS study reported 

that 40% of Medicare patients are treated by nurse 

practitioners. NONPF convened a national task force to 

review and update a document titled Standards for Quality 
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Nurse Practitioner Education. This nationally esteemed 

expert task force was comprised of 19 national 

organizations. Last updated and endorsed by the task 

Force in 2022, these academic standards are to ensure 

that education preparations align with increasing 

complexity of our healthcare system. It is expected that 

nurse practitioner programs comply with these standards 

as part of accreditation and assure that we have a readypracticed graduate. However, nursing education 

accreditation bodies have self-selected only a few of 

these industry standards. Most recently, the Commission 

for Collegiate Nursing Education, who accredits most of 

the nurse practitioner program, has made a decision for 

the first time to join this trend and not fully adopt 

this industry standard. NONPF holds the position by not 

adopting these industry standards. All nursing 

accreditation agencies are in violation of CFR 602, which 

specifically states standards must be sufficiently 

rigorous, recommends that widely recommended industry 

standards are met, and that programs maintain 

requirements that at least are conformed to accepted 

academic standards. The impact of inaction by this 

committee will result in some nurse practitioner programs 

not adopting these nationally endorsed quality standards, 

which may impact patient safety and worsen patient 
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outcomes. Therefore, NONPF asks the committee to conduct 

a review of nursing accreditation agencies to ensure they 

fully adopt standards

MS. JEFFRIES: 30 seconds. 

DR. BIGLEY: -such as the standards 

for quality nurse Practitioner education and also to 

strengthen the language for CFR part 602 to ensure 

industry standards developed by the experts are adopted 

or the agency. Thank you for the opportunity to provide 

comment. 

MR. WAGNER: Thank you, Dr. Bigley. 

Alright Brady, who do we have up next?

MR. ROBERTS: Alright, I just 

admitted Jeremy Bauer-Wolf, who's here representing New 

America. I believe he's in the room. 

MR. WAGNER: Alright, Jeremy, can you 

hear us?

MR. BAUER-WOLF: I can. 

MR. WAGNER: Alright, welcome. You 

have three minutes to speak. You'll be given notice when 

you have 30 seconds remaining, and your three minutes 

begins when you begin speaking. You have the floor. 

MR. BAUER-WOLF: Great. Thank you 

very much. My name is Jeremy Bauer-Wolf. I'm the 

investigations manager with New America's higher 
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education team. We focus our work on creating a higher 

education system that is accessible, affordable, 

equitable, and accountable for helping students lead 

fulfilling and economically secure lives. We're glad to 

see this committee working to improve higher education 

regulations. We urge you to continue moving toward rules 

that prevent poorly performing programs from wasting 

students' time and money. Over the past three weeks, one 

recurring theme from some negotiators has been to 

question what problems stronger accreditation regulations 

intend to solve. Unfortunately, there are many recent 

examples of institutional failures that have harmed 

students and cost taxpayers hundreds of millions of 

dollars, which could have been prevented by stricter 

accreditor oversight. Improved regulations and better 

accreditor management could have prevented or at least 

minimized failures at institutions like Ashford, 

Corinthian, and the University of Phoenix. And again, 

these are just a few of examples of many. We encourage 

the committee to preserve rules on minimum quality 

standards that accreditors can set, better oversight of 

substantive changes, and stricter requirements around 

teach out agreements. We also welcome stricter oversight 

of institutions that pose a greater risk of failure. 

Additionally, we urge the committee to maintain proposals 
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that would require more independent members of 

accrediting agency boards. This will help ensure agency 

boards are not oversaturated with industry 

representatives. In addition to stronger accreditation 

rules, we're glad to see improvements to cash management, 

return of Title IV funds, distance education, and state 

authorization. On cash management, we're concerned that 

focusing solely on refunding students for unspent cash 

value funds will create a loophole for meal vouchers, 

which could still represent a significant loss for 

students. So, we urge the Department to consider 

including the cash value of meal vouchers in this 

proposal, as well as cash equivalent funds. In the state 

authorization proposals, the requirement that an 

institution must obtain permission directly from any 

state where it enrolls over 500 students is an 

improvement. However, we urge the Department to consider 

whether a lower number of students may be appropriate. 

Initial analysis by our team suggests a lower threshold 

of 100 students would be more fitting and would still 

only capture a minority of students that enroll students 

in multiple states. Thank you to the committee for your 

time and your consideration. 

MR. WAGNER: Thank you, Jeremy. 

Alright, Brady, who do we have next?
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MR. ROBERTS: Alright. I just 

admitted Betsy Talbot, who's here representing herself. 

MR. WAGNER: Okay. 

MS. TALBOT: Am I supposed to start 

talking?

MR. WAGNER: Betsy, can you hear?

MS. TALBOT: Yes, I can. I didn't 

know, sorry, I was clicking on the computer audio. 

MR. WAGNER: That's okay. Welcome. 

You have three minutes to speak. You'll be given notice 

when you have 30 seconds remaining, and your three 

minutes begins when you begin speaking. You have the 

floor. Take it away. 

MS. TALBOT: Alright, so I'm supposed 

to start speaking?

MR. WAGNER: Yeah. 

MS. TALBOT: Okay. Sorry. Thank you 

for your time today. My name is Betsy Talbot, and I've 

worked full-time as a state regulator for approximately 

nine years. Today, I'm speaking on behalf of my 

experiences and not on behalf of my employer. Within the 

triad, states are expected to be responsible for the 

legal and regulatory framework that maintains educational 

integrity and consumer protection for students. It's 

well recognized that each state has its own framework for 
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this work, but it has been my experience that the lens of 

this work is seen through politics of consumer 

protections. Politics directly impact the depth and 

breadth of protections afforded to students and the 

resources made available to regulators to facilitate this 

work. Politics, the threat of litigation, financial 

resources, and data sharing laws impact my ability as a 

regulator to speak forthrightly about my experiences and 

having the tools to detect many of the consumer 

protections discussed during this rulemaking process. It 

has not been my experience that states act intentionally

and directly to safeguard Title IV financial aid or have 

any consistency in minimum consumer protections. The 

lack of consistency of consumer protections or state 

authorization application processes was the driver of the 

current state authorization reciprocity structure. Under 

this current structure, schools have benefited from 

increased access to new student enrollments, lower 

regulatory costs and fees, and fewer administrative 

barriers. Students have also benefited from increased 

access to schools of their choice, but that access has 

come at a cost of fewer resources being available and 

directed towards the oversight of colleges and the 

detection of nefarious activities. It has reduced the 

potential remedies for students due to those nefarious 
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activities, and it has created a shift of who's driving 

the conversation of consumer protections for distance 

education. The current structures of the National 

Reciprocity Agreement do not afford the same checks and 

balances as a public, legislative or rulemaking process, 

and has also dramatically changed the representation of 

who is a state actor and there is no voice for students 

and consumer protection allies. I encourage the 

Department to consider impacts on this rulemaking 

process. That one creates increased expectations of 

state authorization to perform safeguarding of Title IV 

aid on behalf of the Department, creates an incentive for 

states to reduce state authorization requirements and 

consumer protections, to be eligible for participation in 

a reciprocity agreement, or create any structure where 

states are expected to perform consumer protection 

functions when those financial resources necessary will 

not be the priority of that state. [30 seconds] Thank 

you for your time today, and I really appreciate the 

chance to speak. 

MR. WAGNER: Thank you for your 

comment. Brady, who do we have next?

MR. ROBERTS: Alright. Next, we are 

hearing from Alastair Adam, who is the co-CEO of 

Flatworld. 
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MR. ADAM: Okay. Can you hear me? 

Okay. 

MR. WAGNER: I can hear you. 

Welcome. You have three minutes to speak. You'll be 

given notice when you have 30 seconds remaining, and your 

three minutes will begin when you start speaking. So,

take it away. You have the floor. 

MR. ADAM: Great. Thank you. I'm 

going to take us back to February 5th and cash management 

and focus on one subtle but very important concession, 

which considerably but hopefully inadvertently 

strengthens the hand of bookstore monopolies. It relates 

to providing a way for students who are eligible for 

Title IV funds to obtain or purchase those materials by 

the seventh day of the payment period. Stepping back, 

monopolists don't have a good track record of doing right 

by consumers. Students included. Inclusive access deals 

grant bookstores effective monopolies on books and 

materials at each school. Preferential Title IV 

disbursement rules strengthen those monopolies. The 

consolidation of bookstore companies and online 

distributors is then accelerating anti-competitive 

behavior and the blocking of more affordable 

alternatives, and we see that every day. Mr. Martin was 

asked if an institution provides a student with the 
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option to opt in, have we met this requirement? And both 

Mr. Martin and Mr. Musser affirmed, yes, but allowing 

schools to grant the bookstore this preferential 

treatment for disbursement of funds is the only way for a 

student to receive their money in time to purchase books 

before the start of class is a nightmare for student 

affordability. To reiterate the importance of this 

concession, investors in bookstore stocks trumpeted this 

specific concession made during those negotiations as 

making Barnes and Noble exponentially more valuable. 

Many students simply can't afford to cover the out-ofpocket costs of their materials without these 

disbursements. And therefore, any student who finds 

materials more cheaply elsewhere faces an invidious 

choice; pay the inflated bookstore price now or wait for 

delayed disbursements after classes have started when 

institutions get around to releasing funds. In many 

cases, these inflated prices are tucked away, compounding 

in loans that the students will be paying off for decades 

to come. Luckily, there's a relatively simple drafting 

solution to this problem. Add the wording that funds 

must be provided by the seventh day for purchase from a 

supplier of the student's choosing. Bookstores tout the 

first day access provided by [inaudible] auto opt-in 

deals, as though it's the only solution for timely access 
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to materials. But in a digital world, it shouldn't. It 

doesn't need to require paying 30 to 40% bookstore 

markups as the price for students to get on-time access 

to their materials. The broader issue I want to address, 

though, beyond removing this particular loophole lies at 

the heart of all of these discussions, there's an 

inherent conflict of interest when a school makes more 

money, the more that students spend on textbooks and 

learning materials that schools rely on these funds is 

not in doubt. And if these incentives [30 seconds] 

weren't instrumental in tilting the table in favor of 

bookstores and driving up student spending, I'm certain 

the companies wouldn't pay them. That doesn't make them 

right. It certainly doesn't make them good for students. 

The simplest solution of all is to outlaw these volumebased rebates and revenue share deals altogether. Remove 

the conflict, level the playing field, align institutions 

with students in trying to reduce the cost of materials. 

They distort behavior, so eliminate the bookstore 

monopolies on Title IV fund distribution. Eliminate the 

financial linkage. Close this critical loophole. Thanks 

very much. 

MR. WAGNER: Thank you for your 

comment. Brady, who do we have next?

MR. ROBERTS: Alright. I just 
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admitted Brooke Elliot, who's here on behalf of the 

University of Illinois. And I believe Brooke is in the 

room. 

MS. ELLIOT: I am, thank you. 

MR. WAGNER: Welcome, Brooke. You'll 

have three minutes to speak. You'll be given notice when 

you have 30 seconds remaining and your three minutes 

begins when you start speaking. You have the floor. 

Take it away. 

MS. ELLIOT: Thank you. My name is 

Brooke Elliot, and I'm the executive associate dean of 

academic programs in the College of Business at the 

University of Illinois. Our campus community has 

significant concerns about several of the proposed 

changes outlined. Specifically, the proposed changes 

concerning state authorization reciprocity would have far 

reaching negative consequences for distance education and 

the broader landscape of higher education. By removing 

the uniformity of oversight across member states, these 

changes threaten to disrupt the efficient functioning of 

educational institutions and compromise the quality of 

education provided to students. University of Illinois 

distance education programs currently serve over 8,000 

learners across all 50 states and from around the world. 

Distance education provides a pivotal role in expanding 
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access to education for underserved and marginalized 

communities. Restricting the ability of institutions to 

offer these programs across state lines would severely 

limit educational opportunities, exacerbating existing 

disparities in access and attainment. One of the primary 

concerns with the proposed changes is the potential for 

increased administrative burden and regulatory 

complexity. Moreover, the proposed changes undermine the 

principles of collaboration and cooperation that underpin 

the reciprocity agreement framework. Thus, the 

Department risks fragmenting the higher education 

landscape and eroding the trust and cooperation among 

member states. We also have concerns regarding the 

proposed changes to the treatment of Title IV funds. 

While it is essential to ensure accountability and fiscal 

responsibility and the administration of Federal 

financial aid programs, the proposed modifications will 

inadvertently create barriers for students seeking to 

access higher education. We disagree that taking 

attendance and distance education programs would simplify 

application of the last day of attendance rule, which 

already holds online learners to higher engagement 

standards than those enrolled in our on-campus courses. 

Mandating our faculty to maintain additional attendance 

records for every student is not simplifying. Moreover, 
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it is unclear how attendance tracking would be achieved 

in asynchronous online courses. Moreover, equitable 

application of the Department's 14-day drop requirement 

poses challenges. For one, it is not uncommon for online 

students to stop out for two weeks and still successfully 

finish courses. Just as on-campus students may face 

unforeseen circumstances necessitating a temporary break 

from coursework, online students should not be penalized

for facing similar challenges. In fact, many learners 

pursuing online education choose this modality precisely 

because of the flexibility that the modality provides. 

At the University of Illinois, our online program student 

populations are more diverse in background, race, 

ethnicity, and experiences because we've removed many of 

the traditional barriers of pursuing high quality 

education. This diversity [30 seconds] rich learning 

environment is one of the key markers of the quality 

educational experience in our programs. In essence, the 

proposed changes overlook the complexity of online 

education and fail to recognize the diverse needs and 

circumstances of learners that we are striving to serve. 

We strongly urge the Department to reconsider these 

proposed changes. Thank you. 

MR. WAGNER: Thank you, Brooke. 

Brady, who do we have up next?
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MR. ROBERTS: Alright. I just 

admitted Robert Boyd, who's here on behalf of Independent 

Colleges and Universities of Florida. I believe Bob is 

in the room. 

MR. BOYD: Yes. Thank you. 

MR. WAGNER: Alright. Welcome, 

welcome. 

MR. BOYD: Good afternoon, everybody. 

I would like to speak about the proposed rule on the 

state authorization exemption regarding accreditation 

status. Again, I'm Bob Boyd. I'm president and CEO of 

ICUF, the Independent Colleges and Universities of 

Florida. We're 31 institutions, 175,000 students, all 

nonprofit, all SACSCOC, regionally accredited, four-year 

chartered in Florida. So, what I wanted to say was this 

proposed rule does not help achieve your goal of 

protecting students. In fact, it does the opposite. We 

think it jeopardizes Title IV funding financial aid for 

the most vulnerable students in the ICUF sector. So, the 

rule on state authorization, eliminating the 

accreditation exception, that would be our position. And 

here's why. The ICUF schools are exempt from licensure 

in Florida from the CIE, which is the Commission for 

Independent Education. This is a for-profit higher ed 

board because of our SACSCOC regional accreditation and 
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because we are EAS-eligible, which is our access grant. 

This was done in a huge fight in the 80s over 40 years 

ago. It saved us fees and relieved us from burdensome, 

unnecessary regulation. But the most important thing to 

remember here is even though we're exempt from licensure, 

we still have to report to the state and to the public. 

Let me just give you an example. Fiscal plant safety, 

credit transfer ability, refund policies to prospective 

students, job placement services, professional licensure 

requirements. We have to follow requirements for 

advertising. We have to report crime statistics. And 

this is key. Student complaints reporting and 

procedures. Then on top of that, over the years we've 

got to do foreign gift reporting. We have to report on 

our bathroom policy. You can imagine the things we have 

to report in Florida. But we essentially give a fair 

consumer report to the state of Florida annually and 

we've got to do that every single year and update the 

data. So, our position is, there's no need to change the 

state authorization because it's completely separate from 

the state regulation in Florida protecting student 

consumers. And all this proposed language does is it 

forces us into the CIE. Our fees would go up over 

$10,000 a year per institution. It would create new, 

duplicative regulations, for example, like site visits, 
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which SACs already does. And the CIE, in my 

conversations with them, have told me they don't have the 

staffMS. JEFFRIES: 30 seconds, Bob. 

MR. BOYD: Okay, -nor the ability nor 

the desire to add all the students. Finally, I would say 

Florida may not pass this legislation. I don't think 

they would. That would jeopardize the Title IV funds for 

all of our active students. And so we would ask you not 

to change the state authorization language, which again, 

is separate from state regulatory action protecting 

students. We appreciate it. Thank you. 

MR. WAGNER: Thanks, Bob. Appreciate 

your comment. Who do we have next, Brady?

MR. ROBERTS: Alright. I just 

admitted David Tretter, who's here on behalf of the 

Federation of Independent Illinois Colleges and 

Universities. And David's in the room. 

MR. WAGNER: Can you hear me, Dave?

MR. TRETTER: I can. 

MR. WAGNER: Alright. You have three 

minutes to speak. You'll be given notice when you have 

30 seconds remaining, and your three minutes begins when 

you start speaking. You have the floor. 

MR. TRETTER: Great. Thank you for 
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the opportunity. Dave Tretter with the Federation of 

Independent Colleges, an advocacy organization here in 

Illinois, I represent 56 nonprofit colleges and 

universities throughout the state educating over 200,000 

students annually, larger than our public universities 

here. Illinois nonprofits here are the leading producers 

of teachers, engineers, medical doctors, disease 

researchers here in Illinois. And we're proud of our 

over 150-year record of higher education. I appear today 

to express my grave concerns on behalf of the Illinois

Nonprofit Colleges and Universities in relation to 

proposed changes on program integrity and institutional 

quality that would eliminate some current regulations 

that exempt institutions from in-state approval or 

licensure, in addition, some other proposals that we view 

as harmful. It's unclear, at least in the information 

I've been provided over the last couple of weeks what 

ailment we're trying to cure here. But I can tell you 

that you may have heard this from my colleagues across 

the country, will create what I think is legislative 

chaos in the States, not only in Illinois but many other 

states and seem to target, in my opinion, our finest and 

longest serving institutions in the country I think some 

of the best track record of good, high-quality higher 

education leading to jobs, etcetera, that I think we're 
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all interested in. Let me end with the provisions laid 

out. I think at a minimum there's some questions about 

Federal authority over the states here. And I think 

you're hearing it today; I suspect some pushback on what 

I would view as an overreach of Federal authority. And I 

sincerely hope that that is relooked at, reconsidered, 

and that efforts are made to reach out to the states, 

including Illinois, so that we can work with you to find 

a better solution. That's all I got. Thank you for the 

time today. 

MR. WAGNER: Thank you for your 

comment, David. Appreciate it. Brady, who do we have 

next?

MR. ROBERTS: Alright. We are 

hearing from Hope Williams now, who's here representing 

the North Carolina Independent Colleges and Universities. 

MS. WILLIAMS: Good afternoon. 

MR. WAGNER: Hi. Can you hear me?

MS. WILLIAMS: Yes. Can you hear me?

MR. WAGNER: I can hear you. 

Welcome. You have three minutes to speak. You'll be 

given notice when you have 30 seconds remaining and your 

three minutes begins when you start speaking. You have 

the floor. 

MS. WILLIAMS: Alright, thank you. 
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Good afternoon. I am Hope Williams, President of North 

Carolina Independent Colleges and Universities, the 

statewide office of North Carolina's private higher 

education sector. And I'm here today to address the 

issue of state authorization in relation to eligibility 

for our students to receive Title IV funds. When the 

Higher Education Act was passed by Congress in 1965, 

North Carolina's 36 private liberal arts and research 

colleges and universities had long been authorized by the 

state. Many had been conferring undergraduate, graduate, 

and professional degrees for more than 100 years. This 

relationship with the state and the preexisting state 

authorization was why, when the North Carolina General 

Assembly consolidated public universities under one 

governing board in 1971, the legislature also exempted 

our private, nonprofit colleges and universities from 

licensure by the public system's then newly established 

Board of Governors. A state's process for authorization 

of colleges and universities, and a separate state 

licensure requirements or exemption from licensure 

granted by state law have been recognized since the 

inception of the Higher Education Act. Only in 2010 did 

the U.S. Department start questioning that state's 

authority. At that point, our office researched state 

statutes and other official state documents to prove the 
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state authorization of each of our colleges and 

universities. There is a sense of Deja vu today, 

although nothing has changed since those discussions in 

2010, in terms of the authorization of our institutions 

by the state or the state remedies that students have for 

issues they cannot resolve at the institutional level. 

Regardless of the number of years colleges have operated 

in a state, or how the state recognizes the college by 

name or in another manner, in state law or in other state 

documents, it is deeply concerning that administrative 

regulation would be poised to try to discount, even 

supersede state law on state authorization passed by the 

state's elected officials. Such a change after almost 60 

years would cause tremendous upheaval for thousands of 

students attending our independent colleges and 

universities and receiving Federal Financial Aid, aid 

which is absolutely critical to the ability of these 

students to attend and graduate from college. Almost 

half of North Carolina students attending our 36 

independent colleges and universities received Pell 

Grants, a percentage that is higher than our [30 seconds] 

many other university systems. Each of these North 

Carolina Pell Grant recipients, under the auspices of the 

governor and the North Carolina General Assembly, also 

received state need-based financial aid. The fact that 
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the General Assembly provides the state support to 

students attending our colleges and universities is 

further confirmation of our state authorization. The 

final point I will make today is to ask you to reflect 

carefully about the mixed message you will be sending on 

state authorization if you implement what is being 

proposed. The Department would be telling states that 

recognizes a state's legal right and authority by virtue 

of the state's funding of two and four-year.

MR. WAGNER: Alright Brady, who do we 

have as our last scheduled speaker?

MR. ROBERTS: Our final speaker is 

Thomas Foley, who is here representing the Association of 

Independent Colleges and Universities of Pennsylvania. 

He is in the room. He just needs to come off mute. It 

looks like he can hear us, but someone needs to unmute 

him. I see someone working in the background. 

MR. FOLEY: Can you hear us okay?

MR. ROBERTS: We can. I think what 

you might need to do is mute it. Because I think you're 

logged in under two devices if you just want to mute it 

on one of them. So otherwise, we'll get feedback. But 

we can hear you and see you. 

MR. FOLEY: Alright. That's super. 

My name is Tom. Thank you. My name is Tom Foley, I'm 
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president of The Association of Independent Colleges. 

MR. ROBERTS: Wait, you muted 

yourself. 

MR. FOLEY: Nine independent 

nonprofit colleges, serving over 275,000 students. I'm 

here to speak against the Department's proposal to 

eliminate regs that exempt institutions from state 

approval or licensure requirements for in-state schools; 

1) the institution is established by name as an 

educational institution, by a state, through a charter, 

statute, constitutional provision or other action; and 2) 

state law provides an exemption to institutions based on 

an institution's accreditation or based on the 

institution being in operation for at least 20 years. 

Most of the existing independent, nonprofit colleges and 

universities in Pennsylvania are authorized via a charter 

from the General Assembly of the Commonwealth. Twentythree of these institutions were chartered before 1850, 

29 more before 1900. All of these institutions have 

educated students and served their communities for over 

100 years, and have persisted through a Great Depression, 

two World Wars, a Great Recession, and at least one 

worldwide epidemic. This proposed regulation suggests 

that these same institutions should not suddenly be 

viewed as neither legitimate nor trustworthy. This 
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proposal to ignore the authority of states to approve 

institutions of higher education through, “charter 

statute, constitutional provision or other action,” is 

redundant with existing safeguards unnecessary for 

institutions with over 100 years of experience and very 

likely harmful to students in our state if implemented. 

All independent, nonprofit higher ed institutions in 

Pennsylvania have to demonstrate their effectiveness to 

regional accreditors on a regular basis. They're subject 

to periodic program reviews of their financial aid 

policies by the Office of Federal Financial Aid, and then 

must follow numerous consumer protection laws enacted by 

the Commonwealth of Pennsylvania and the Federal 

government. It is unclear to us what additional 

education or student protection goals the proposed regs 

by the Department identifies and meets. In 2012, 

legislation was passed in Pennsylvania that allowed these 

colleges to implement new degree courses or programs 

without direct approval from the Pennsylvania Department 

if the college or university had regional accreditation 

and the institution had been in operation for at least 10

years. The legislature acted because of a three to fouryear backlog in the state's department's process for 

reviewing these applications. This backlog prevented 

colleges from quickly responding to community [30 
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seconds] needs for trained workers, especially in the 

areas of STEM, healthcare, and teaching. Unfortunately, 

that Pennsylvania Department continues to be both 

underfunded and understaffed. There's little likelihood 

that that situation would change absent accompanying 

Federal funding resources to enable it. Individual 

states are closest to the action. They understand the 

importance of quick pivots to satisfy educational 

[inaudible]-

MS. JEFFRIES: Your time is up. 

MR. FOLEY: and they should retain 

the authority to utilize specific limited exemptions for 

higher ed authorization to meet the needs of employers 

and communities. 

MR. WAGNER: Thank you for your 

comment. 

MR. WAGNER: And with that, excuse me, that brings an end 

to the public comment portion of the day. And that also 

means that we're at the end of the day one, session 

three. It's completed. I want to thank everyone for 

their participation and their hard work and see everyone 

tomorrow. 
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Zoom Chat Transcript

Program Integrity and Institutional Quality- Session 3, Day 1, Afternoon, March 4, 2024

*Chat was copied as presented, as a result minor typos or grammatical errors may be present.

From P - Robyn Smith, Legal Aid Orgs. to Everyone:

+1 to Barmak’s concerns.

From P, DC, HBCUs, TCUs, MSIs to Everyone:

Reacted to "+1 to Barmak’s conce..." with ���

From A. Ashlynne Haycock-Lohmann (vets) to Everyone:

Reacted to "+1 to Barmak’s conce..." with ���

From Joe Weglarz NACUBO to Everyone:

+2 to Barmak's concerns, key word is cost.

From P - JoEllen Price, Financial Aid Administrators to Everyone:

Is there any way to develop an approval process for these programs similar to CTP using the 

Participation Agreement as a means for ensuring the program meets ED requirements?

From A - Magin Sanchez, Civil Rights/Consumer to Everyone:

Reacted to "+1 to Barmak’s conce..." with ���

From A - Zack Goodwin (he/him), Financial Aid Administrators to Everyone:

Reacted to "Is there any way to ..." with ���

From P - Carolyn Fast, Civil Rights/Consumer Organizations to Everyone:

Reacted to "+1 to Barmak’s conce..." with ���

From P, Jillian Klein, Proprietary Institutions to Everyone:

Are we going to talk about the virtual location language or no?

From P-Jamie Studley, Institutional Accreditors to Everyone:

same question as Jillian

From Dave Musser, ED FSA to Everyone:
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Let's return to that when Greg is finished

From P, Jillian Klein, Proprietary Institutions to Everyone:

Reacted to "Let's return to that..." with ���

From A, Emmett Blaney, Students/Borrowers to Everyone:

Reacted to "+1 to Barmak’s conce..." with ���

From P-Jamie Studley, Institutional Accreditors to Everyone:

thanks. It was a quick transition, didn't hit the buzzer fast enough

From A - Zack Goodwin (he/him), Financial Aid Administrators to Everyone:

Reacted to "Let's return to that..." with ���

From P - Erika Linden - Private Nonprofit Institutions to Everyone:

Why are we jumping ahead to State Authorization? The agenda distributed on Friday night 

indicates next topic.

From P, Jillian Klein, Proprietary Institutions to Everyone:

David Cohen is coming to the table for a comment

From A, Scott Dolan, Private/Nonprofit IHEs to Everyone:

the rationale provided here about concerns regarding third-party providers and closure 

provides more context than what was included in January sessions.

From P - Robyn Smith, Legal Aid Orgs. to Everyone:

They did talk about this in January, as I commented on that.

From P - Robyn Smith, Legal Aid Orgs. to Everyone:

Rationale re closed school/discharge issues, sorry wasn’t clear.

From Cindy Jeffries - FMCS Facilitator to Everyone:

Replying to "Why are we jumping a..."

Erika, State Authorization is next as we will have time this afternoon to start it. The TRIO 

subcommittee is not able to attend today for their report out so they will remain in their slotted 
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time for tomorrow am and then we will return to statue authorization.

From A, Scott Dolan, Private/Nonprofit IHEs to Everyone:

understood. didn't see the direct relation to third party providers at the time

From A, Scott Dolan, Private/Nonprofit IHEs to Everyone:

thanks for the follow up Dave!

From P-Jamie Studley, Institutional Accreditors to Everyone:

The word "location" may be misleading here, wonder if there is some way to indicate that 

the use of the term doesn't trigger other references/reqts re location. "Unit"?

From A. Ashlynne Haycock-Lohmann (vets) to Everyone:

I should have been added to the caucus room and was not?

From P-Jamie Studley, Institutional Accreditors to Everyone:

Following on the virtual location discussion with Dave, for ED consideration later: My 

understanding is that closed school discharges only if the entire location closes, not a program, 34 

CFR 685.214, so the question is: would a university with online programs in different schools of 

study, e.g., an MBA and a masters in nursing online, do both go into the same “virtual location”? -

and if so, and the MBA fails/closes, how would ED use CSD? Or, will an IHE be forced to have a 

virtual location for each online program?

From A, Scott Dolan, Private/Nonprofit IHEs to Everyone:

thank you!

From P. Jo Blondin, Community Colleges to Everyone:

I haven't had time to look at the proposals, but I am curious about the date of exemption 

being set at 1965. A lot of community colleges were chartered after that date.

From P-Jamie Studley, Institutional Accreditors to Everyone:

are we going to go section by section at some point, or is all of it on the table at once?

From A, Scott Dolan, Private/Nonprofit IHEs to Everyone:

would be helpful to pull up the language

From A, Scott Dolan, Private/Nonprofit IHEs to Everyone:

thanks!
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From P- John Ware, State Regulator to Everyone:

Rob Anderson is coming in for states to make some comments

From A, Scott Dolan, Private/Nonprofit IHEs to Everyone:

agreed on the written rationale. as this provided more context for how we got to proposed 

redlines from January until now. something that I raised in February and as part of data request

From P. Jo Blondin, Community Colleges to Everyone:

Reacted to "agreed on the writ..." with ���

From P-Jamie Studley, Institutional Accreditors to Everyone:

is the word applicable even needed --wouldn't a state only pursue a law if it believes a law 

is applicable?

From A, Scott Dolan, Private/Nonprofit IHEs to Everyone:

it's an incredibly fair question

From P - JoEllen Price, Financial Aid Administrators to Everyone:

What happens on July 1, 2030? How many schools are impacted and will there be a backlog 

of renewals causing delays in 2030?

From P, Jillian Klein, Proprietary Institutions to Everyone:

I don't believe I said "what is the big deal?" I asked how this language makes a difference 

when the rest of the language indicates that all schools (even those operating under reciprocity 

agreements) would be subject to all state oversight rules.

From A - Zack Goodwin (he/him), Financial Aid Administrators to Everyone:

Reacted to "What happens on July..." with ���

From A, Scott Dolan, Private/Nonprofit IHEs to Everyone:

Reacted to "I don't believe I sa..." with ���

From P, Laura Rasar King, Specialized Accreditors to Everyone:

Reacted to "I don't believe I sa..." with ���

From A, Scott Dolan, Private/Nonprofit IHEs to Everyone:

couldn't states do this by opting our of reciprocity?
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From P- John Ware, State Regulator to Everyone:

Rob Anderson is going to come in for States

From P, Jillian Klein, Proprietary Institutions to Everyone:

I think to your question Erika, schools would need to individually monitor state laws in all 

states on an ongoing basis.

From (A) Dom Chase - Business Officers to Everyone:

Requiring institutions to conform with all of a State’s laws – other than initial approval and 

application processes – based on the location of students rather than any other institutional 

presence or activity, fundamentally undercuts the purpose of a reciprocity system.

From A, Scott Dolan, Private/Nonprofit IHEs to Everyone:

Reacted to "Requiring institutio..." with ���

From P-Jamie Studley, Institutional Accreditors to Everyone:

Dave's answer did help me to understand why the word 'applicable' is there -- because a 

state can by law decide that certain laws will or will not be applicable to schools within reciprocity.

From P - Erika Linden - Private Nonprofit Institutions to Everyone:

Reacted to "Requiring institutio..." with ���

From P - Erika Linden - Private Nonprofit Institutions to Everyone:

Scott Dolan

From P - Erika Linden - Private Nonprofit Institutions to Everyone:

And Barmak - I'm a compliance officer - I'm all about regulations and following rules. But I 

will also argue whether rules are reasonable.

From P. Jo Blondin, Community Colleges to Everyone:

Reacted to "And Barmak - I'm a..." with ���

From P, Jillian Klein, Proprietary Institutions to Everyone:

I am not sure if Rob directed that DEI example question at ED, but I would like to hear an 

answer to how they envision schools would handle (tomorrow is fine).

From P, Jason Lorgan, Public 4-years to Everyone:
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Reacted to "I am not sure if Rob..." with ���

From A - Zack Goodwin (he/him), Financial Aid Administrators to Everyone:

Reacted to "I am not sure if Rob..." with ���

From P. Jo Blondin, Community Colleges to Everyone:

Reacted to "I am not sure if R..." with ���

From A, Scott Dolan, Private/Nonprofit IHEs to Everyone:

Reacted to "I am not sure if Rob..." with ���

From A, Scott Dolan, Private/Nonprofit IHEs to Everyone:

thanks all