Committee Meetings - 01/21/22 

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 DEPARTMENT OF EDUCATION

OFFICE OF POSTSECONDARY EDUCATION

 INSTITUTIONAL AND PROGRAMMATIC 

ELIGIBILITY COMMITTEE

 SESSION 1, DAY 4, MORNING

January 21, 2022
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Committee Meetings - 01/21/22

P R O C E E D I N G S

MR. WAGNER: FMCS. I will be 

facilitating the morning session. This is the fourth day 

of the first week of the regulatory negotiations, so I 

will go ahead and get to the roll call. So I will call 

out folks. The other thing is, before I do that, I'll 

just make a note today that Will Durden will be sitting 

in for Dr. Anne Kress for the public two-year 

institutions for this session, Dr. Laura Rasar King will 

not be joining in the morning, Jamie Studley will be 

representing the accrediting agencies, and that Ashley 

Schofield will be sitting in for Dr. Beverly Hogan, 

representing minority-serving institutions. With that, I 

will go ahead and go through the roll call. So.

DR. HOGAN: Excuse me. This is Beverly 

Hogan, I am here today.

MR. WAGNER: Oh, wonderful.

DR. HOGAN: I was out yesterday. Thank 

you.

MR. WAGNER: Welcome. Welcome, 

Beverly. Okay, great. Good to see you. Okay, so.

MS. JEFFRIES: I have, Kevin, one 

other change. We have been notified that Barmak 

Nassirian will be sitting in for the service members and 

veterans on the certification piece this morning, and 
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Committee Meetings - 01/21/22

Jessica Ranucci will be sitting in for legal aid.

MR. WAGNER: Okay, great. Thank you so 

much. Okay, let's go to go to roll call. So for 

accrediting agencies, we have Jamie Studley.

MS. STUDLEY: Good morning and happy 

Friday. Correction on number six: Laura Rasar King is 

here as the alternate and she will be sitting in the 

chair for accrediting agencies for certification.

MR. WAGNER: Wonderful, so she's, is 

she into the meeting at this point?

MS. STUDLEY: She is on the screen.

MR. WAGNER: Okay, great. Oh hi, I can 

see you. So, Dr. Laura Rasar King?

DR. KING: Good morning.

MR. WAGNER: Good morning. 

Representing consumer advocacy organizations, we have 

Carolyn Fast.

MS. FAST: Morning.

MR. WAGNER: Good morning. And Jaylon 

Herbin. He's just getting admitted; we'll come back. 

We'll move to representing civil rights organizations, 

Amanda Martinez.

MS. AMANDA MARTINEZ: Here, present.

MR. WAGNER: Good to hear from you. 

Representing financial aid administrators at 
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Committee Meetings - 01/21/22

postsecondary institutions, Samantha Veeder.

MS. VEEDER: Good morning.

MR. WAGNER: Good morning. And David 

Peterson.

MR. PETERSON: Morning.

MR. WAGNER: Representing four-year 

public institutions of higher ED, Marvin Smith.

MR. SMITH: Morning.

MR. WAGNER: Okay. And Deborah 

Stanley.

MS. STANLEY: Morning.

MR. WAGNER: Good morning. We also 

have, from the legal assistance organizations that 

represent students and/or borrowers, Johnson Tyler.

MR. TYLER: Good morning.

MR. WAGNER: And Jessica Ranucci.

MS. RANUCCI: Good morning.

MR. WAGNER: Morning. Previously, we 

heard from Dr. Hogan, but for minority-serving 

institutions, Dr. Beverly Hogan.

DR. HOGAN: Here.

MR. WAGNER: And Ashley Schofield.

MS. SCHOFIELD: Good morning.

MR. WAGNER: Morning. From private 

nonprofit institutions, we have Kelli Perry.
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MS. PERRY: Morning.

MR. WAGNER: And Emmanual Guillory.

MR. GUILLORY: Good morning, everyone.

MR. WAGNER: From proprietary 

institutions of higher ED, Brad Adams.

MR. ADAMS: Good morning.

MR. WAGNER: Good morning. And Michael 

Lanouette.

DR. LANOUETTE: Good morning.

MR. WAGNER: From the state attorneys 

general, we have Adam Welle.

MR. WELLE: Good morning, I'm here.

MR. WAGNER: And Yael Shavit.

MS. SHAVIT: Here.

MR. WAGNER: From the state higher ED 

executive officers, state authorizing agencies, and/or 

state regulators of institutions of higher ED and/or 

loan servicers, we have Debbie Cochrane.

MS. COCHRANE: Present.

MR. WAGNER: And David Socolow.

MR. SOCOLOW: Good morning.

MR. WAGNER: Morning. From the 

students and student loans borrowers, we have Ernest 

Ezeugo.

MR. EZEUGO: Good morning.
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MR. WAGNER: And Carney King.

MR. KING: Good morning.

MR. WAGNER: For the two-year public 

institutions of higher ED, we have Dr. Anne Kress, who 

we mentioned was not going to be here, and sitting in 

Will Durden.

MR. DURDEN: Good morning, nice to see 

you all.

MR. WAGNER: Nice to see you. And 

representing U.S. military service members, veterans, or 

groups representing them, we have Barmak Nassirian.

MR. NASSIRIAN: Present.

MR. WAGNER: Is, Barmak, is Travis 

Horr also on?

MR. HORR: Yep, I'm here. Good 

morning.

MR. WAGNER: Good morning, Travis. For 

advisers, we have David McClintock.

MR. MCCLINTOCK: Morning, everyone.

MR. WAGNER: Morning. And Dr. Adam 

Looney. Okay. Representing the Department from the OGC, 

we have Steve Finley.

MR. FINLEY: Hey, everyone.

MR. WAGNER: Hello. And the federal 

negotiator, Greg Martin.
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MR. MARTIN: Good morning.

MR. WAGNER: Morning, Greg. Just want 

to give everybody a quick reminder to try to keep the 

discussions focused on major issues and concerns. We 

have a lot to get through today. We did have a logical 

breakpoint yesterday. We'll turn it over to Greg. I 

assume we're going to begin with certification 

procedures.

MR. MARTIN: Thank you, Kevin. And 

it's nice to be with all of you today on our last day of 

negotiated rulemaking for our first session. And for 

those of you who just like winter the way I do, I have 

worn a a seasonally inappropriate spring tie for wishful 

thinking purposes. Because if you're on the East Coast 

this morning, you know it is very cold and not at all 

spring-like, so I'm being optimistic. And if you're if 

you're one of those people who like skiing and like this 

kind of weather, then my apologies. But for those allies 

of mine, springtime. Okay, so we're moving into a 

discussion of certification procedures this morning, 

issue paper number six, and so I'll give you a second to 

pull that up so that you have it in front of you, and 

then we'll get it on the screen. Here we go. So for

certification procedures, the statutory cite is given to 

you, there are regulatory cites as well. The 
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certification procedures and this is actually in 668.13. 

And so, let's go into the summary of the issues here.

The regulations in 668.13 spell out procedures for 

certification to participate in the federal aid 

programs, and further regulations in 668.14 include the 

requirements of a program participation agreement, or 

PPA, that institutions enter into as a condition of 

participation in the aid programs. However, the 

Department is concerned that procedures for certifying 

institutions of higher education to participate through 

the PPA are not sufficiently rigorous to adequately 

protect students and taxpayers. With that in mind, we'll 

go to our proposal. The Department proposes changes that 

will provide for heightened oversight of institutions, 

particularly those that have engaged in activities that 

are high risk for students or taxpayers. We believe 

these proposed changes will help ensure that students 

have access to high-quality educational opportunities 

and are protected from predatory and/or abusive 

behaviors. So, let's go into the overview of what those 

proposed changes are. These are under 668.13, 

certification procedures. First, the Department proposes 

to eliminate the requirement to automatically recertify 

institutions after one year on a month-to-month status 

if the Department has not made a decision. Current 
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regulations require that the Department make a 

determination to grant or deny certification,

provisional or full, within 12 months for any 

institution's application submitted on or after July 1, 

2021. Under that provision, if the Department does not 

decide to grant or or deny certification within 12 

months, the institution is automatically granted renewal 

of certification, which may be provisional. However, 

institutions that remain on a month-to-month for an 

extended time are typically those that require more 

extensive investigation before we reach a decision. 

Forcing early decisions could have substantial negative 

consequences for students and for taxpayers. At the same 

time, the Department is working to improve its 

administrative processes and expand its resources to 

support more efficient and timely decisionmaking where 

possible. Next, we seek to provide additional events 

that will lead to provisional certification, including 

when the institution has incurred repeated findings 

related to the same compliance concern from program 

reviews or audits, or when the institution or an owner 

of the institution also owns another institution with 

liabilities owed to the Department. These are high-risk 

situations where the Department might need to take 

further steps to protect students and taxpayers by 
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putting the institution on a provisional certification 

status. We also seek to require recertification for 

certain provisionally certified schools after two years. 

Namely, this provision applies to schools who were 

provisionally certified for reasons related to major 

consumer protection issues, such as pending or approved 

Borrower Defense or false certification claims. Moving 

on to 668.14, we propose to ensure that both private 

colleges and the companies that own them are required to 

sign PPAs. To allow us to ensure owner entities with at 

least 50 percent interest in the institution are liable 

for taxpayer losses that may be incurred. We intend to 

add state attorneys general to the list of entities that 

have authority to share with each other and the 

Department any information that pertains to the 

institution’s eligibility for participation in Title IV, 

HEA programs, or any information on fraud or abuse. 

Next, we seek to ensure that all programs that require 

programmatic accreditation and/or licensure 

certification actually meet those requirements. Too 

often, students have enrolled in programs without 

knowing that they won’t be able to find employment in 

the recognized occupation because the program does not 

meet the necessary requirements for employment. 

Institutions will now be required to have those 
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necessary certifications or programmatic accreditation. 

We are seeking feedback from the committee on the 

appropriate maximum length of aid eligibility for a 

program that prepares students for gainful employment in 

a recognized occupation. We are aware of significant 

variations in the required length of programs that are 

tied to the same occupations across states. Longer 

programs result in significantly larger amounts of 

student loan debt. For instance, an American Institutes 

for Research analysis found that state requirements for 

cosmetology licenses range from 1,000 hours to more than 

twice as long at 2,300 hours without any evidence of 

increased pay or better program outcomes associated with 

those longer programs. We offer multiple options and 

seek additional feedback from the Committee on capping 

the appropriate length of aid eligibility by program 

type. We seek to establish additional conditions for use 

with provisionally certified institutions. The 

Department proposes a non-exhaustive list of conditions 

that may be used as a way to ensure institutions are 

aware of the requirements that may be applied to their 

schools. This allows the Department to formalize tools 

that are available now, but not typically used. So next, 

we seek to specify that the use of provisional 

conditions that will be applied to prior proprietary 
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institutions seeking to convert to nonprofit status. 

These conditions include compliance with 90/10 and 

gainful employment requirements, and the submission of 

reports on agreements with the owner of the institution 

for an institution that is certified as a nonprofit 

institution or that converts to a nonprofit institution. 

Conditions include reports on accreditor or state 

authorizer actions and new servicing agreements entered 

into by the school, as well as updates on IRS 

communications related to the school's tax-exempt 

status. And finally, under 668.43, institutional 

information, we propose to eliminate a disclosure 

requirement regarding the licensure or certification 

prerequisites to align with and reflect the proposed 

changes in 668.14, as described above, which will make 

this disclosure redundant. So, given that, then let's 

move into the actual proposed regulatory changes 

themselves, and we're going to start with 668.13, 

requirements for certification. We'll go through this 

starting with paragraph A. As we move through, we see 

that the change here is in B romanette three. And you 

see where we have removed the language, which says in 

the event that the Secretary does not make a 

determination to grant or deny certification within 12 

months of the expiration of the current period of 
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participation, the institution will automatically be 

granted renewal of certification, which may be 

provisional. So that's been taken out or proposed to be 

removed. And just a little more background, we propose 

to eliminate this requirement. We believe that the 

Department needs the discretion to investigate 

institutions thoroughly so, prior to their being 

approved, to make sure they comply with federal rules 

serving the interests of students and taxpayers. So,

this provision will allow the Department to take 

additional time when that is needed. And with that, I 

will open the floor for discussion or comment on the 

change proposed here in 668.13(b).

MR. WAGNER: Okay, I see Jessica.

MS. RANUCCI: Good morning, everybody. 

First, I just want to speak broadly to this section. I 

really appreciate what the Department's trying to do 

here, and I think that these are really important 

consumer protections that I understand the Department is 

trying to implement to prevent exactly some of the types 

of problems that we've seen that lead to clients coming 

to my office seeking legal help. And I just appreciate 

the mission of what you're doing here. As to this 

particular section, again, I'm completely on board with 

the goal. I think it is very important that the 
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Department make these tough decisions and make them 

quickly. As we said before, I think that the whole point 

of a lot of these changes is that we need to see the 

early warning signs we need to shut down the schools. My 

question is just that we don't want to leave students 

holding the bag. And I guess they do have some concerns 

here that if this provision, if the Department in fact 

does not make a decision and this provision kicks in, 

then I would just want to make sure that we have the 

right consumer protections. And to me, what would make 

the most sense, is that these students would be able to 

apply for closed school discharge, but I'm not sure that 

under the current regulations they would technically 

apply. So, I guess I would ask the Department what if 

your best efforts at your aggressive timeline don't 

work, what protections are there for students at these 

schools? Because obviously many students can't continue 

attending school without Title IV and it would be very 

disruptive, and I think we'd also be very unfair to 

require them to drop out of school and start repaying 

their loans after grace because of the opposite effect 

of what you're trying to have here.

MR. MARTIN: Alright. Thank you. So,

with regard to this provision, it wouldn't affect that. 

So, if we go back to, this regulatory change you see 
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here was only effective July 1, 2021; it was a 

relatively recent rule. And before that, when when a 

school was up to be recertified, and this continues to 

be the case, that as long as they've applied properly to 

the Department for recertification, once the PPA 

expires, that their certification goes month-to-month

until such time as we make a decision to provisionally 

certify, fully certify, or deny a certification. So,

what we had done here was in response to some criticism 

in the past that the Department wasn't doing this in a 

timely enough manner, to say that if 12 months had 

elapsed from the time of application and we hadn't made 

a decision, that the school would be automatically 

recertified. Now, that could be provisional, we didn't 

have to do a full recertification. But it was sort of an 

instance where the Department regulated itself on 

timeframes. So, with this removed, this won't prejudice 

students in any way because the effect on students will 

be essentially no different, because that school's 

participation would continue to go month-to-month while 

we make the decision. So, it's just going back to what 

the situation was prior to 2021. I don't see it 

prejudicing students in any way, or their rights to 

redress in the case of closed schools, or anything like 

that. It just takes away this obligation to for the 
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Department to give or not, you know, this automatic 

approval. And I think, you know, we don't want this 

automatic. We concluded that we don't. It's not in the 

best interests of students or taxpayers to have any 

process like this be automatic and that, you know, there 

is a month-to-month continuation while we are making a 

decision. But this is different. This is just that the 

recertification triggers after a certain amount of time 

if we don't take action, if we don't make the decision. 

So, this pretty much just sets it back to where we were,

and I think actually protects students and taxpayers 

more than than the existing regulation.

MS. RANUCCI: Thank you. If I can just 

respond, I don't understand what you said. I think maybe 

what you said is, and maybe somebody else can explain it 

better, but, the summary language that's provided in 

this document just says eliminate the requirement to 

automatically recertify institutions after one year on a 

month-to-month status if the Department has not made a 

decision. But I think what you what you said is 

different, which is that somehow this would be like reputting in a requirement to do month-to-month. Carolyn, 

maybe you can explain it.

MR. MARTIN: No, I want to point out 

that we're not putting back. It's currently the case 
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that when schools, that we do that. This was different. 

This says after automatically after 12 months, 

irrespective of what we do, if we don't make a decision, 

the school is automatically recertified. That's all. All 

removing this would do is take away the automatic aspect 

of that. There will still be month-to-month. That would 

not go away. We're not putting that back or taking that 

away. It's just that if we didn't have month-to-month, 

then when a school certification was up, then they would 

just lose eligibility. And sometimes we don't act on it 

by the time it has lost eligibility. So all this does is 

take away the the automatic aspect of that. And I'll 

turn it over to Steve. Maybe he can expand on that a 

little bit and make it a little more clear.

MR. FINLEY: Unmuting myself first. 

So, the way it works is pending applications remain 

pending until a decision is issued. There was a concern 

that some applications were taking too long, and the 

regulations were changed to say if it's pending for a 

year, you're going to issue some type of approval. Now 

when you peel that away, the applications that are 

pending for a long time tend to be because there are 

underlying issues being examined related to the 

recertification, the kind of things we're going to be 

talking about later. And so those were left open. And 
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frankly, if the Department was going to be forced to 

issue a decision for something where there were still 

issues being looked at, it was likely going to be 

provisional anyway, and it would be a short-term 

provisional approval. So, this is just going to go back 

to the status quo ante the way it was before this 

regulation went into effect. Schools will continue on 

month-to-month until the decision on any pending 

recertification application is issued.

MR. MARTIN: Thanks, Steve.

MR. WAGNER: I see several hands, I 

see you're first Kelli, but before I call on you, I just 

want to let everyone know that Yael Shavit will be 

sitting in for Adam for the state attorneys general. And 

I did want to welcome Jaylon Herbin and Dr. Adam Looney. 

Jaylon's representing the consumer advocacy 

organizations and Dr. Adams Looney is an advisor. So,

they've joined us since we started. With that being 

said, Kelli, you're up.

MS. PERRY: Good morning, and I 

apologize for asking this question. I just don't know 

the answer, and I just want to clarify. If a school is 

on month-to-month and they're left on month-to-month, 

are there additional requirements that they have to meet 

during that month-to-month process?
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MR. MARTIN: I'll let Steve, in case 

if I don't say something right, Steve you can come in. 

No, they continue on that, the month-to-month is a 

continuation of the existing PPA until until such time 

as we provisionally certify or fully certify the 

institution, or we could also not certify the 

institution. I think one thing Steve said, I want to 

point out that this simply goes back to the way it was 

prior to July of 2021, that it was for years. I don't 

know when we started that practice, but ever since I can 

remember. So, it's only been a very short period of time 

that this has been in effect.

MR. WAGNER: Thanks, Greg. Barmak?

MR. NASSIRIAN: Yeah. I'm not sure 

where this belongs, but I want to flag that statutory 

language places great emphasis on state authorization. 

And you do have language and support in the second 

bullet in the issue paper referring to the AGs. We do 

need to talk about what state authorization means. It 

should at the very, again, I'm aware of reciprocity 

agreements amongst the states to deal with distance ed. 

I would certainly encourage the Department to address 

that issue by ensuring that all state consumer debt, any 

reciprocity agreement that satisfies this language does 

include retention of state consumer protection language. 
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That is, they are the people closest to the problem 

oftentimes, and allowing institutions to circumvent 

state consumer protection laws is a problem. So that's,

I don't know where this belongs. Maybe it should come up 

in issue number two, but just wanted to flag that. I 

should also express concern about this notion of 

reversion to status quo ante on a month-to-month basis 

without additional protections. That has been a 

significant again path of least resistance [inaudible]. 

So, it just strikes me as very odd. It's almost worse 

than automatic renewal because, at the very least, 

automatic renewal basically means that the Department 

washes its hands of its obligations. Here, you're 

affirmatively extending the ability of an institution to 

operate legally, and that tends to portend future 

problems. So I would encourage the Department, if any 

institution goes on whatever the right length of time is 

for the Department to to act on most applications, to 

the extent that there are problem applications that 

failed that timeline, any month-to-month renewal should 

absolutely, at the very least, have a generic statement 

in the regs that entitles the Secretary to make 

additional demands on that institution.

MR. MARTIN: I would point out that, 

though it is the case that oftentimes the Department 
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takes more time, that we need to use the month-to-month

because the PPA is expiring, that certainly in cases 

where we were aware there are issues, the Department 

could could prioritize that and actually act 

immediately, that the month-to-month is at our 

discretion. So, it doesn't give the schools any kind of 

automatic, you know, that they get to have a certain 

number of months or anything like that. So, where the 

Department perceives it needs to act with priority, it 

could always do. But there's no requirement that we give 

it a certain number of months or even even one month, we 

could act on it right away if we wanted to.

MR. NASSIRIAN: But in a renewal on a 

month-to-month basis, can you alter the terms of the 

provisional PPA?

MR. MARTIN: I'll turn that one over 

to Steve. I think that what we normally do is, once we 

issue a provisional PPA, that would provisionally 

certify somebody, that would have that provisional 

certification could have stipulations in it. But maybe 

Steve wants to clarify that a little bit.

MR. FINLEY: No, Barmak is correct. 

It's a continuation of the prior approval on a month-tomonth basis, just like a lease is extended month-tomonth beyond its term. And the Department would/could 
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issue a more restrictive approval to talk about what 

you're doing, can issue a decision on a provisional 

certification with additional conditions if it wanted 

to, and that's usually under consideration during these 

extended periods.

MR. MARTIN: And I do want to point 

out that, in the vast majority of cases, we don't have 

problems with the schools.

FEMALE SPEAKER: I want to open it so 

I see, so we can see their chat.

MR. WAGNER: I was just going to say,

just a reminder, if you can mute yourself if you're not 

speaking, that'd be great. Go ahead. Is that it, Greg? 

Okay. So, I see Carolyn, you're up.

MS. FAST: Thank you. I don't know if 

this adds to the conversation too much, but I think that 

there still might be some confusion here about the 

provision. And I just wanted to add, if this helps at 

all, that part of the issue is that when an automatic 

certification happens, it would be for for an extended 

period of time, like maybe a two-year period. And this 

elimination of the automatic certification provision is 

helpful, because then it doesn't lock the Department 

into a long period of time where they couldn't easily 

take action against a school that's problematic. So, I 
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think that one of the benefits of this change that's 

been proposed is it puts the Department on greater 

footing to quickly respond after taking a long time to 

respond to a problem. So, I think that is a positive 

outcome in making the proposed change that we would 

certainly support. But I certainly share concerns that 

were raised by others about if a problematic school is 

allowed to continue even on a month-to-month for a 

really long extended period, that does seem like a 

problem in terms of not protecting students and 

taxpayers. So, I think Barmak was suggesting that 

perhaps, as part of a temporary provisional status, 

there could be a set of conditions, such as the ones 

that are laid out in this reg that give a higher level 

of protection. Perhaps that could be built into a 

temporary provisional program agreement, if not already.

MR. MARTIN: Thank you. Just want to 

make one clarification, I do want to point out that 

under the current regulations, while it is true that 

after 12 months the school would be automatically 

renewed, the Department has the right or retains the 

right to make that a provisional. So, we're not 

obligated to fully certify them or certify them for a 

specific period of time. We could, in fact, do a 

provisional for a very short period of time, but it's 
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just that it obligates us to do that. That's the main 

difference.

MR. WAGNER: Jessica.

MS. RANUCCI: I'll be brief. I'm sorry 

for getting us off on the wrong foot. I now understand 

this provision and I agree largely with what Carolyn 

said. I just want to push back on the Department's 

reasoning that just because this worked before 2021,

that's a good enough reason to do it. ITT was before 

2021. Corinthian was before 2021. I think that a lot of 

the problems that I really appreciate you're trying to 

address, were real problems before 2021, and so I think 

in thinking about how to make these provisions stronger 

in general, I just don't think going back to the status 

quo is good enough. And I'm not saying that's exactly 

what you were suggesting, or that this is the right 

place to do it. But I do think this group should think 

creatively beyond just “let's go back to what was 

working,” because I'm not sure that it was working.

MR. MARTIN: Thank you. We're 

certainly open to any suggestions that any of the people 

from the table have. I do want to point out, just to 

make sure everybody understands the process, that while 

it is month-to-month, --and I get that people are very 

concerned about problem schools--I just must say that 
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the Department can right now, if hypothetically 

someone's school's PPA expired and they went on monthto-month, if the Department wanted to act the next day, 

we we could do that. So, we're certainly aware, our 

compliance staff is aware of issues, they would not just 

allow it to go month-to-month until caught up in a queue 

or something. Where we were aware of that, we could act 

right away. Which is not to prejudice anything any of 

you were saying about having ideas to strengthen this,

so we're certainly open to those.

MR. WAGNER: Beverly.

DR. HOGAN: I muted myself. Yes. I 

will not speak to the issues that have already been 

raised, but I do have some similar concerns. But my 

question is simply this, and is based on 15 years of 

experience that I had working at state government and 

being over a lot of the programs that had to come under 

regulatory authority: is it advisable that there's 

language in there, and it could just set a tone, that 

the Department should hold itself to a timely review 

process? Because again, I get back to the shared 

responsibility. Institutions are waiting, and if the 

Department has the costs, your backlog, or whatever it 

is, and just continue to move that from month-to-month, 

it kind of holds the institution in a period of waiting. 
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And if there are problems, they don't get addressed, 

they just continue to grow. And what kind of guidelines 

do you have for the Department to say there should be a 

timely process, a review process, and some parameters 

for that?

MR. MARTIN: Yeah. Well, the issue 

here is not that the Department faces a huge backlog of 

these that they can't get to. In fact, we time the 

expirations of these of these PPAs so that it fits into 

our workload. Normally when we can't act on one in a in 

what someone might consider to be a timely matter, there 

are problems with that institution that we need we need 

to iron out. It takes some time to do, or we have issues 

with the institution that need to be resolved before we 

can go ahead with the PPA, so that's what this is about. 

As far as the Department acting timely, we make every 

effort, as I said, to act as timely as we can on issues. 

Where everything is fine and where there are no issues 

involved in a PPA or renewal, we can act quickly. But it 

may take time, because there's a back and forth that 

needs to occur. It's like with any time the Department 

interacts with institutions where there has to be a 

decision made by the Department. We understand the 

community's concerns about timeliness on our part, and 

we're making every effort to address those things, and 
27

Committee Meetings - 01/21/22

it could be with PPAs, or program reviews for another 

one. Generally, when program reviews go for a period of 

time, it's not because the Department is sitting on or 

choosing not to do it. It's because there are issues 

that involve back and forth between the schools and the 

Department. So, that's what this is more of a 

recognition of. And it's not in any way, I don't want to 

be signaling that the Department doesn't want to be held 

to timeliness standards or wants to say, “well, you 

know, we don't believe we should have to act on 

something timely.” Quite the contrary. It's just that we 

don't feel that this is the best way to do that, to have 

the Department regulated in this way that forces 

something to occur that we might not want to occur. So, 

I'll leave it at that.

MR. WAGNER: Now we have Debbie.

MS. COCHRANE: I wanted to chime in to 

say how much I support this provision and how important 

I think it is. I certainly heard a lot about the 

timeliness, and I definitely agree that expedient 

response to problems is important both for student 

protection as well as for fairness to institutions. I 

also agree that it's important that the Department has 

the latitude it needs to address the problem. So, if 

there is language to be added, that could be around 
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Committee Meetings - 01/21/22

adding more terms or conditions as the Department is 

warranted. If that is authority, it doesn't feel like it 

has been put to use. It would be supportive of that. But 

I think the predominant factor for me is also that, if 

the concern is about problem schools, and the schools 

that are probably falling in this category are ones that 

are thorny and potentially problematic, I think we also 

want the Department to have the time it needs to ferret 

out those problems thoroughly and appropriately. It's 

just not in students’ or taxpayers’ interests for that 

process to be shortchanged.

MR. MARTIN: Thank you.

MR. WAGNER: I just want to mention 

Emmanual Guillory is stepping in for private nonprofits, 

and he has a question, so Emmanual take it away.

MR. GUILLORY: Thank you so much. At 

this point, I want to echo what my colleague Beverly had 

mentioned--Dr. Hogan, sorry--had mentioned, regarding 

institutions being in limbo if there is no response or 

overall recommendation decision by the Department after 

12 months. For an institution just to not know if 

they're going to be recertified or not, and have that 

lingering and lingering and lingering with no end date,

to not really know when the end will be. I definitely 

understand if there's something concerning, the 
29

Committee Meetings - 01/21/22

Department will need time to continue to review things, 

and I think that the Department should have that time to 

do that, but communicate with the institutions so they 

can have some sort of idea of what to expect. When the 

Department previously put this language in, and I 

believe it was in the Distance Education and Innovation 

final regulations when they put this language in, it was 

to push the Department to have some sort of timeline. 

And I think that kind of goes back to previous Borrower 

Defense to Repayment regulations, where there was a time 

period that the Secretary gave themselves to respond to 

certain Borrower Defense claims, just to make sure 

things were moving in some sort of a timely order. So, I 

see here that under this current regulatory text, 

there's proposed language under the provisional 

certification status to allow the Department to do 

additional things. And I also know that currently, if 

the 12 months pass and there's an automatic renewal,

that that could be provisional, it doesn't have to be 

full. And so basically, I feel like there could be maybe 

some sort of a happy medium somehow, instead of 

completely eliminating it. And I know that they're still 

on a month-to-month, and from what you said that it's 

the current certification that they're still under. So 

they're not technically provisional, and Barmak was 
30

Committee Meetings - 01/21/22

getting to maybe there should be additional if they are 

on a month-to-month. Instead of eliminate it completely, 

I just feel like there could be a balance, just so the 

institution could know what to expect in 12 months, or 

is it 14 months. And I also wanted to add that the 

institution has to submit their recertification 90 days 

in advance before their time is up, so that's 3 months 

plus the 12 months which is 15 months. So, if there's an 

additional 6 months, that they know, “okay, if the 

Secretary hasn't made a decision now, then something's 

going to happen.” I just kind of think there should be 

some sort of timeframe for the institution as well. 

MR. MARTIN: Thank you.

MR. WAGNER: Marvin.

MR. SMITH: I just wanted to applaud 

the efforts here, and maybe ask a specific question. You 

say that the Department is working to improve its 

administrative processes and expand its resources to 

support more efficient and timely decision making. As 

someone that's worked with this PPA system, and I think 

a lot of my colleagues have, your own folks call it a 

dinosaur of a system. And I don't know if that's part of 

the answer, are we going to modernize this PPA system 

that we're using out in the field, or what type of 

resources are at the Department? To me, you deserve all 
31

Committee Meetings - 01/21/22

the resources you can get for such an important topic.

MR. MARTIN: I work in policy, I don't 

work over in FSA where the operational side of this 

occurs. But I do know, and we can probably get some more 

information for you about that, but recently FSA has 

undergone a great deal of modernization to their 

systems. And what they're doing, they've been spending a 

lot of resources, both monetary and and human resources,

on bringing this up, so I think that they've made some 

great strides. I don't have statistics or anything like 

that, but we take this very, very seriously. We 

definitely want to be timely in every way possible. But 

I'll also point out that this is a serious thing,

recertifying an institution. There are serious 

consequences to getting it wrong. So, obviously, we want 

to make certain that what we're doing is measured and 

and exact, and that takes time and it takes a lot of our 

people power to do that. But I can say that we are 

making efforts to modernize, but we're not sitting on 

our hands, or we're not content with old systems. But 

yes, we are burdened with some older systems, and we're 

trying to deal with that. This just has to do with not 

regulating the Department in this way, which we feel 

actually hamstrings our ability to act in the interest 

of students and taxpayers.
32

Committee Meetings - 01/21/22

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

hands up. We did go through 668.13(b). Greg, do you want 

to take a temperature check on that? Do you want to move 

to something else?

MR. MARTIN: Sure, let's take a 

temperature check so that we were doing it by paragraph 

wherever possible.

MR. WAGNER: Got it. Okay, so if you 

remember from the last three days, we'd like to take a 

temperature check on 668.13(b) and hold your thumbs up 

high so we can all see them. Looks like there are no 

thumbs down. Okay great, none down.

MR. MARTIN: Thank you very much.

MR. WAGNER: Okay. So Greg, where 

would you like to go next?

MR. MARTIN: I'd like to move to 

paragraph (c), provisional certification, and I'll wait 

for the screen to come up, and we're going to be looking 

at, if you look down into what we've eliminated there 

under (F). We have eliminated the text that says the 

Secretary may provisionally certify an institution if,

and then we go down to (F), the institution is a 

participating institution provisionally certified, or 

rather provisionally recertified under the automatic 

recertification requirement, which we're proposing to 
33

Committee Meetings - 01/21/22

remove. So that text becomes redundant, and we remove 

it. Then we move down to (c)(1) romanette two, some 

additional text there regarding some new provisions. The 

institution’s certification automatically becomes 

provisional upon notification from the Secretary if the 

institution triggers one of the financial responsibility 

events under 668.171(c) or (d) and as a result the 

Secretary requires the institution to post protection. 

(B), the institution has received the same finding of 

noncompliance on more than one program review or audit. 

And finally (C), the institution or an owner of the 

institution with control over that institution as 

defined in 34 CFR 600.31, also owns another institution 

with liabilities owed to the Department. We go down to 

(2), if the Secretary provisionally certifies the 

institution, the Secretary also specifies the period for 

which the institution may participate in the Title IV 

program, except as provided in (c)(3) of this section, a

provisionally certified institution's period of 

participation expires--and here you see the our 

addition--not later than the end of the second complete 

award year, following the date on which the Secretary 

provisionally certified the institution that had been 

fully certified for reasons related to substantial 

liabilities owed or potentially owed to the Department 
34

Committee Meetings - 01/21/22

for discharges related to a Borrower Defense to 

repayment, or false certification, or other consumer 

protection concerns identified by the Secretary. And 

just as a review of our reasoning for this, we've added 

several events or circumstances the Department considers 

to automatically require provisional status. These 

events are significant and suggest major issues with the 

institution and the interests of students and taxpayers. 

We believe additional oversight is needed, and I just 

went over those. And what was here in (2), we changed 

items in romanette one, two, and four. These are 

technical changes to address incorrect cross references. 

And in romanette two, the text automates the maximum 

timeframe for recertification of an institution with 

significant consumer protection concerns, such as 

Borrower Defense or false certification claims, to two 

years. This will ensure more frequent oversight of the 

institution and allow the Department to reassess 

regularly. And those, except for some minor technical 

changes to address errors, that is everything for 

paragraph (c). So, I'll entertain discussion from the 

floor on what is there.

MR. WAGNER: Okay. Kelli, you're up.

MS. PERRY: Thank you. So, first a 

comment, and then a question. So, the comment is on (1),
35

Committee Meetings - 01/21/22

romanette two, (A). I would propose that you change the 

order of the wording of this, such that it would read 

that the Secretary requires an institution to post 

financial protection as a result of being deemed not 

financially responsible relating to one of the triggers. 

And the reason being is that the way that this reads, 

it's basically saying that an institution hits a trigger 

and the Secretary requires them to post financial 

protection. An institution can post a 50 percent letter 

of credit and be financially responsible. So, in order 

for them to automatically be provisionally certified 

when they posted that 50 percent letter of credit and 

are considered financially responsible, I think if it's 

not reworded, that institution would fall into this 

provisional certification. So, that's one comment. The 

second one is in (B), where it talks about “an 

institution has received the same finding of 

noncompliance on more than one program review or audit.”

Is this consecutive audits? Or is this, for example, if 

someone had an immaterial compliance finding in an audit 

in 2020, and then two or three years later ended up with 

the same potentially non-material compliance finding, is 

that a trigger for automatic provisional certification?

MR. MARTIN: So generally I think, and 

I'll ask Steve to confirm this, that we're talking about 
36

Committee Meetings - 01/21/22

what we refer to as repeat findings here. So we say here 

the institutions received the same funding of 

noncompliance for more than one program review or audit, 

and so once it's identified in the program review or the 

audit, then it would be the next time they're audited or 

reviewed the same finding appears again and is not 

addressed. So, I think that would be where it's 

identified, and then in an additional audit or program 

review, the reviewer or auditor finds the same thing. We 

don't say anything here about severity of the of the 

finding or whether, so your suggestion is that we make 

some type of clarification as to what types of findings?

MS. PERRY: Well, just my concern is 

that you could potentially have the same type finding 

but it could not be consecutive, that it could be years 

apart and it could be a non-material finding. So, for 

example, you could have 120--I'll use cash management, 

for example, right?--you could have $120 that you didn't 

pay the supplier prior to asking for reimbursement from 

the Department. And it's just a one-off where you have 

procedures in place, you have corrected it and then, say 

2 years later, for some reason they find another

immaterial noncompliance finding. So, my concern is that 

the way that this reads is that it doesn't define 

whether or not it's a consecutive finding that hasn't 
37

Committee Meetings - 01/21/22

been corrected, right? Or if there's any materiality to 

that compliance finding.

MR. MARTIN: Yeah, well, certainly I 

can say that it's certainly not the Department's 

intention to have a regulation where we find there might 

be an unintentional repeat of something that was very 

non-material or, like you said, you didn't pay a vendor 

$200 or something like that, but that wouldn't be a 

Title IV finding necessarily. But I think we'll take 

this back. Your concerns are legitimate. I think it's 

certainly clear what we're trying to do here, but we 

understand that it takes institutions time to fix a 

finding. So, what we're generally talking about here 

would be repeat findings, not maybe a program review

occurred and then an audit at the same time or very 

close, that would not be a repeat finding. A repeat 

finding has been identified in a report, and then the 

time has gone by sufficient for the institution to 

address that and they still haven't done it. But I think 

we'll take it back and take a look at maybe how we can 

flesh that out a little more to get to where we're 

trying to go there.

MS. PERRY: Thank you. Appreciate 

that.

MR. MARTIN: Sure.
38

Committee Meetings - 01/21/22

MR. WAGNER: Brad?

MR. ADAMS: Hi, good morning. 

Committee and members of the public, and to add to just 

what Kelli just referenced, the Department is proposing 

in section (1), romanette two (B), in certain audit 

events automatically place an institution on provisional 

certification. Worth noting that provisional 

certification is a big deal. Often comes with 

limitations, restrictions on when an institution can 

implement adding new programs, locations, has additional 

reporting requirements. It also changes how and when the 

Department can take action on an institution. This is 

all just to say that there should be good reasons to put 

an institution on provisional status, which is how the 

law is currently designed. With that in mind, I'll offer 

a comment. In romanette two, the Department is proposing 

that an institution would automatically go on 

provisional if it, quote, “received the same finding of 

noncompliance on more than one program review or audit.”

Again, no materiality threshold here. Someone who's gone 

through the school side of many compliance audits has 

written an institution can have a single late refund of 

$20 two years in a row and be put on provisional. 

Second, there's no provision that says finding should 

have to have occurred in consecutive audits. The 
39

Committee Meetings - 01/21/22

proposal suggests that if an institution had a single 

late R2T4 in an annual audit, and they had another 

single R2T4 in an audit five years later, it would 

automatically go on provisional approval. In other 

words, if you ever have a repeat finding, you go on 

provisional. I guess here every school in America could 

be on provisional within years. By the way, this applies 

to all schools, not just proprietary. That being said, 

the single audit for nonprofits only requires findings 

to be reported if they rise to being material. The

proprietary audit guide requires reporting all instances 

of noncompliance, without consideration of questioned

cost, or number of instances, or materiality. I would 

love for David to come in and comment on what the 

average number of findings are in a normal compliance 

audit for a school in a normal year? And how many repeat 

findings are there in a normal year? Because they're 

substantial. Thank you.

MR. MARTIN: We could ask David to 

respond to that.

MR. MCCLINTOCK: I'm not sure that I 

can comment to the average number of findings. I would 

say that I would add context to two issues that that 

Brad, and I think Kelli, brought up. One is, and we work 

with financial aid administrators across all institution 
40

Committee Meetings - 01/21/22

types, and there's nobody that works harder at the 

schools, but the regulations are constantly changing. 

They're dealing with turnover in their departments, and 

occasionally things come up that become a finding in 

their audit report. But often that doesn't get raised to 

the financial aid department until they've gone through 

the audit process, at which point they may implement 

changes, but often they might be 4 or 5 months into the 

next audit period. And so, almost by definition, 

findings such as these will become a repeat finding 

because the school has not had opportunity to take 

corrective action to solve the problem. So, it's 

possible, even by the end of the second fiscal year or 

audit period, the problem would be resolved, but that it 

would be a repeat binding for those schools. Yeah, I 

would agree, the second issue for proprietary schools 

and the audit guide requires disclosing any instances of 

noncompliance, even those without questioned costs, and 

no consideration for the instances, and so that can lead 

to repeat findings that are not significant. I would say 

most commonly would be Pell Awards to students, just due 

to academics not always advising the financial aid 

department about students who drop or add classes. And 

if you review 120 students, I think at any institution 

you're likely to come across 1 or 2 Pell findings. A 
41

Committee Meetings - 01/21/22

consideration could be add a minimum. For this, there 

are requirements about a school's requirement to post a 

letter of credit due to late refunds that does consider 

a 5 percent threshold and not considering just instances 

of 1 or 2 in the finding. And so maybe considering 

something like that, as if you're above that threshold 

for multiple years, I might suggest a third year unless 

a finding was egregious, would make sense for when this 

would potentially come into play.

MR. MARTIN: Thank you, Dave. I 

appreciate that. I just want to say going forward that I 

do understand everybody's concerns here, about maybe 

there should be more specificity in the language. But I 

do want to say that it's not our intention to put 

schools on a provisional certification for minor 

findings. We do have, I think, a real concern about 

repeat findings, where schools have been told in either

program review reports or audits that they're failing to 

make credit balance returns to students or R2T4 issues. 

So, there are some serious instances where we do see 

repeat findings that are, in fact, very material. So, I 

just want to point that out, which is not to say that I 

don't understand the concern some of you have voiced 

here. We will take the language back and take a look at 

it to see what we can do to make it more specific.
42

Committee Meetings - 01/21/22

MR. ADAMS: Thanks, Greg. And I had a 

small comment on romanette three, would you like me to 

get back in line or?

MR. MARTIN: I'll leave that to our 

facilitator.

MR. WAGNER: If it's brief, go ahead.

MR. ADAMS: Okay, it should be under a 

minute. Under romanette three, the Department also 

proposes that a school would automatically go on 

provisional if an owner of an institution with control 

over that institution also owns another institution with 

liabilities owed to the Department. There should be some 

clarification here around what constitutes a liability. 

Schools owe funds back to the Department all the time, 

part of just normal processing. There also is again no 

materiality qualifier. The amount owed should have to be 

significant. Finally, there should be a requirement that 

the liability is not being timely paid pursuant to an 

agreement with the Department. Even if the school owes a 

material liability, if paying it back in a timely 

manner, other affiliated schools shouldn't be put on 

provisional. Thank you.

MR. WAGNER: Thanks, Brad. Barmak.

MR. NASSIRIAN: Yeah, I'm a little 

curious as to why these three particular criteria are 
43

Committee Meetings - 01/21/22

there, not other markers of potential trouble that 

should automatically place an institution into 

provisional? Why these three, to the detriment of lots 

of others? We had an institution that was found guilty 

of fraud in a court of law. Should that institution not 

automatically be in provisional?

MR. MARTIN: We'll certainly, this is 

what's identified in the proposed rules. We’ll certainly 

take any comments or suggestions back with us.

MR. NASSIRIAN: Is it possible to have 

a catch-all that that simply captures any significant 

noncompliance across the board?

MR. MARTIN: Well, no, I think the 

Department wants to be careful about what obligates us 

to automatically place the school on the provisional 

certification. So, let me just ask Counsel. Steve, do 

you have any comments on that?

MR. FINLEY: I think the idea that we 

will entertain suggestions of things to add to the list 

is a good one. These issues are pretty much related to 

direct concerns about administrative capability and 

financial risk. I think they're probably obvious to most 

people. And the comments on materiality are certainly 

things we're taking back for discussion. I think it's 

obvious from Greg's comments that this wasn't intended 
44

Committee Meetings - 01/21/22

to be just a simple gotcha for something that would 

happen to everyone. But comments of other things that 

should be considered here would be welcome. Thank you.

MR. MARTIN: Thank you, Steve.

MR. WAGNER: Alright. Amanda, you're 

next.

MS. AMANDA MARTINEZ: Sorry, coming 

off mute, I'm on my phone. I was going to make this 

suggestion for extended coverage, but I'm wondering if 

this might say here-I'll bring it up again when we get 

to that section--but I'm wondering if an institution 

should, potentially, this is just me throwing out ideas 

here, for the Education Department to think creatively 

about, but to all think about this more deeper too, to 

go into provisional certification if there are disparate 

impacts on student civil rights, and if there's been 

found evidence that institutions are disproportionately 

impacting students’ civil rights. I think that should be 

considered just as much as these financial 

responsibility and noncompliance, just as much as those 

are held to a high standard here. I think civil rights,

or consideration of civil rights and the protection of 

student civil rights, should be also equally thought 

about at that high level of the threshold for 

certification. But that is a separate comment, and I 
45

Committee Meetings - 01/21/22

will think of what do you believe, that if that doesn't 

make sense, because I'm not an expert here, then it 

doesn't make sense. But I just want to just throw that 

out there. But my specific question in this part is 

mostly for part (C). It mentioned that the institution 

or an owner of an institution with control over that 

institution, and it references CFR 600.31. I'm wondering 

what that percent threshold is? I could also look, but I 

was just wondering if someone could just quickly state 

what that control percent threshold is when you cite 

600.31.

MR. MARTIN: Well to be sure, I'll 

have to look. Steve, can you check, is that 25 Steve?

MR. FINLEY: Greg, could you repeat 

the question, I'm sorry.

MR. MARTIN: Yeah, so in (C), the 

institution or an owner of the institution with control 

over the institution, the control as defined in 600.31. 

She wants to know the percentage what the control is in 

600.31.

MR. FINLEY: Well, I think based on 

the discussion we had yesterday, I think it would depend

on how the determination of control was made. But I 

think the comment that this should be clarified here is 

is a good one.
46

Committee Meetings - 01/21/22

MR. MARTIN: Okay.

MR. WAGNER: Okay, thank you. Jessica, 

you're next.

MS. RANUCCI: I have a minor drafting 

question. You don't have to respond now, but I'm a 

little confused about romanette two, which is the 

Borrower Defense, false certification, and other 

consumer protection part. I'm all for that, but I'm 

confused as to where it fits in (c)(1). There's no cross 

reference, and it seems to me like there should be some 

explicit corollary in (c)(1), either romanette one or 

two, rather than just putting that in the timeframe.

MR. MARTIN: Okay, thank you. I'll 

take that back.

MR. WAGNER: Steve, you had your hand 

up. Did you put your hand down? I just want to be sure 

if you had anything to add.

MR. FINLEY: I was just cycling 

through and trying to end up on not having my hand 

raised. Thank you.

MR. WAGNER: No problem. Okay, that 

being said, I jumped the gun here. I don't see any other 

hands up. So, Greg, do you want to take a temperature 

check on 668.13(c)?

MR. MARTIN: Sure.
47

Committee Meetings - 01/21/22

MR. WAGNER: Okay.

MS. JEFFRIES: Let me just note here, 

Dave put his hand up. I don't know if he has something 

he wants to add prior to the temperature check.

MR. WAGNER: Thanks for looking at 

that, Cindy. Appreciate it. Dave?

MR. MCCLINTOCK: Yeah, thanks, Cindy. 

I just wanted to provide some insight, and I understand 

the path where we're trying to go. Johnson put a note in 

the chat about just removing the word “automatic.” And 

that is part of the issue here. There is some discretion 

right now from the Department about how to consider 

repeat findings, without any real definition of what is 

considered to be a significant enough repeat finding 

under some of the discussions we're having today. We 

have just seen a generic comment included in the final 

audit determination letters that there was a repeat 

finding, and this could lead to additional action being 

taken. So just removing the word “automatic“ I don't 

think eliminates that possibility. And we just encourage 

trying to put together language to describe the types of 

issues that would rise to that level, beyond just 

removing the word “automatic.”

MR. MARTIN: Thank you.

MR. WAGNER: Thanks Dave. Alright, 
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Committee Meetings - 01/21/22

we'd like to take a temperature check on 668.13(c). Make 

sure you hold your thumbs up so we can see. Okay, we 

have several negotiators that have their hands down. And 

if anyone would like to comment on why, that'd be fine. 

If not, we'll move on.

MS. VEEDER: I just wanted to say it's 

based on what we talked about already. I think we need 

significantly more clarity, particularly in relation to 

item (B) in this in this section, before I can get on 

board.

MR. WAGNER: Got it, thank you. Okay, 

Greg, you want to move on to 668.13(d)?

MR. MARTIN: Sure. I was on the wrong 

page. Yeah, before we do that, I just want to say again 

that we've heard your concerns, certainly about what we 

just discussed in (c), and I will take that back and we 

will work on it. Hopefully have something else for you 

during our next session. So, moving on to (d), (d) is 

the revocation of provisional certification. This should 

be a pretty easy one. So, if we go down to (d)(3), an 

institution may request reconsideration of a revocation 

under the section within 20 days of receipt of the 

Secretary’s notice, providing written evidence that the 

revocation is unwarranted, and the filing date of the 

request on which the request is hand-delivered, mailed,
49

Committee Meetings - 01/21/22

or we just changed “sent by facsimile” to “electronic 

transmission.” Getting to the point now where people,

born past a certain date, don't know what a fax machine 

even is anymore. They never seem to work real well, so I 

don't miss them. But anyway, that's been changed to 

“electronic,” just in recognition of advancing 

technology and getting rid of antiquated phrases. So,

I'm not going to ask for a concensus check there, but I 

do want to give people the opportunity to comment if 

anybody does have a comment on that and loves fax 

machines and wants to see it kept there. I can't see if 

we have any comments on that or not.

MR. WAGNER: Oh, I'm sorry, I wasn't 

sure whether we were, if you want to go through the rest 

of it or we wanted to go.

MR. MARTIN: No, because we'll be done 

with 13 and moving on to 14. So yeah, I can't imagine 

many comments there, but I did want to give people the 

option to do that if they're inclined.

MR. WAGNER: Understood. And Aaron, 

can we stop sharing if possible? Thank you. Kelli, you 

have your hand up.

MS. PERRY: Yeah, I would just 

recommend making the same change in romanette one. The 

first one, where it talks about the facsimile 
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Committee Meetings - 01/21/22

transmission, as you're also making in romanette two. 

So, make it in one and two.

MR. MARTIN: Yeah, thank you. So 

noted. We will do that.

MR. WAGNER: Anything else?

MR. MARTIN: I think that's it. We 

don't have any references to rotary telephones in here 

or anything, so we don't have to do that. Okay, why 

don't we move on to 668.14? Alright, we are in 668.14, 

program participation agreement, and our first change 

comes in (a)(3). And just for a little bit of context 

here, this language will specify that the Department 

will regularly require signatures on program 

participation agreements not only from a representative 

of the institution, but for private institutions also 

from an authorized representative of any entity with 

direct or indirect ownership of the college. We believe 

this will provide critical protections for the 

Department and for taxpayers in the event of closure. 

This will allow the Department to recoup liabilities 

from the owner entity that remains open. So, let's take 

a look at that. Under 3, an institution's program 

participation agreement must be signed by an authorized 

representative of the institution and, for a proprietary 

or private nonprofit institution, an authorized 
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Committee Meetings - 01/21/22

representative of the entity with direct or indirect 

control of the institution if that entity has the power 

to exercise control over the institution. The Secretary 

considers the following as examples of circumstances in 

which an entity has such power. If the entity has at 

least 50 percent control over the institution through 

direct or indirect ownership, by voting rights, or by 

its right to appoint board members to the institution or 

any other entity, whether by itself or in combination 

with other entities or natural persons with which it is 

affiliated or related, or pursuant to a proxy or voting 

or similar agreement. If the entity has the power to 

block significant actions. If the entity is the 100 

percent direct or indirect interest holder of the 

institution, or if the entity provides or will provide 

the financial statements to meet any of the requirements 

in 34 CFR 600.24(g),(h), or subpart L of this part. And 

that is the entirety of what we changed for paragraph 

(a), so I'll entertain any comments on that.

MR. WAGNER: Let's see. Dave, before I 

go to Brad, you're first in line. Dave, do you have 

anything you'd like to add?

MR. MCCLINTOCK: Oh, I'm sorry, I just 

didn't lower my hand.

MR. WAGNER: Okay, no problem. Brad, 
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Committee Meetings - 01/21/22

you're up.

MR. ADAMS: On the PPA cosigning, I 

have some concerns about this proposal and would 

appreciate some clarifications from the Department. 

First, I know that in limited circumstances, the Higher 

Education Act authorizes the Department to require 

financial guarantees from an institution's board of 

directors, president, or in the case of a proprietary 

school, from its owners to cover certain financial 

losses and penalties. This is from Title 20 U.S.C.,

Section 1099c, subsection (e). The Department is only 

authorized to use this authority to the extent necessary 

to protect the financial interests of the United States. 

The statute is very specific that the Department shall 

not require these kinds of guarantees if the institution 

in question satisfies certain compliance thresholds. I 

do not see those kinds of restrictions built into this 

language. The Department's proposal here also seems to 

require owners in other controlling entities to cosign 

the PPA as a routine matter without regard to the 

statutory language. The question is what is the 

significance of the cosigning? If the Department is 

requiring compliant institutions to guarantee the 

institution's liability, this would seem at odds with 

the previously stated statute. If cosigning is not a 
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Committee Meetings - 01/21/22

guarantee of liabilities, then what is it? In the 

appendix of the PPA, it says the owners are jointly and 

severally liable for performance. Can the Department 

state what this means, and I'll follow that up with 

another question?

MR. MARTIN: As this involves a 

statutory citation, I'll ask our counsel to respond to 

that, so Steve, do you have any comments on that?

MR. FINLEY: Sure, so the language 

that Brad was bringing to our attention in the Higher 

Education Act deals with limitations on requiring 

individuals to sign PPAs. And the language in front of 

the group right now is dealing with requiring 

representatives of legal entities to sign PPAs in 

certain situations. So that's the distinction here that 

I think is relevant and the discussion should focus on, 

I would suggest, the relationship between these entities 

and the institution that's being reviewed. I hope that 

helps clarify it, Brad. Not that I necessarily expect 

you to agree with me, but I did want to get that 

clarification into the discussion.

MR. ADAMS: I'll defer to the lawyers 

on that one, sir. Can you explain what the “jointly and 

severally liable for performance” statement in the 

current PPA means to the Department?
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Committee Meetings - 01/21/22

MR. FINLEY: It means those entities 

share financial responsibility for ensuring the 

institution's obligations to administer the programs 

properly under the Title IV regulations and statute.

MR. ADAMS: To my last point, I also 

want to point out that this is not just to proprietary 

schools. This proposal considers any entity that has the 

power to block significant actions stated in point (B)

at the school. So, I would think this covers lots of 

churches that exercise reserve powers over faith-based 

institutions, hospital systems that found and oversee 

nursing and medical schools, and any other organization 

that may have governance authority over a private 

nonprofit. So, are we saying here that the Catholic 

Church will be signing the University of Notre Dame and 

Georgetown's PPA?

MR. MARTIN: I don't think that's what 

we're saying. I will take your concerns back. Certainly, 

the Department has a compelling interest in providing 

protection for taxpayers and for students here. And I 

think, well, I personally feel that it's not, and it's 

the Department's view that we're not able to do that 

unless we have all the parties which control the 

institution involved here. So, we believe that this 

provides protections where there are other entities that 
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Committee Meetings - 01/21/22

exercise actual control over the institution. I think 

that there are differences between affiliated and 

exercising control. I'm not aware of the details of 

exactly what authority the Roman Catholic Church has 

over the institution you named. I don't know the details 

of that, so will not speak to that. But I can speak to 

the Department's intentions here, and that we don't feel 

it's appropriate to not take into account these other 

entities that do exercise significant control over an 

institution and its actions to students and in being a 

fiduciary for federal funds.

MR. ADAMS: Thank you, Greg. And maybe 

Steve could help the group explain what that means,

“entity has power to block significant action.” I don't 

understand.

MR. MARTIN: Well, and I'll let, if 

Steve wants to add to this, certainly. You know, 

blocking the power has the power to block significant 

actions. We are concerned over any entity that has the 

authority to control what's going on in an institution. 

And we have seen, it's been a long time, but I 

personally have participated in program reviews, 

compliance actions where I have seen institutions where 

arrangements such as this exist, where there was an 

effort on the part of the institution to do something 
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Committee Meetings - 01/21/22

that was in compliance, but other entities involved in 

decision making prevented that from happening, and 

certainly were involved in the day-to-day operations of 

the institution, especially as regards the school's 

finances. So, we are concerned here about an entity 

that's present that's able to intercede in decisions 

that the institution makes, because some of the 

decisions that institution makes might be, or all, could 

be in the best interest of the programs, but that those 

are being changed or altered in some way by this other 

entity. And this is a recognition that that is a 

reality, that that does happen. So, we have concern to 

address that.

MR. ADAMS: That would include faithbased institutions if they had that power to block.

MR. MARTIN: I don't want to make a 

comment about faith-based institutions at this point, 

because first of all I'm not an expert on what the 

relationship between a faith-based institution is and 

generally the churches they're connected to. But I would 

imagine they have to be looked at on a case by case 

basis, but I'll ask Steve if he wants to comment on 

that.

MR. FINLEY: And I can say the 

intention here is to address a number of ownership 
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Committee Meetings - 01/21/22

structures we've seen where there are entities that do 

not control the day-to-day operations of an institution, 

but they absolutely have control over a lot of more 

significant decisions that the entity owning the 

institution might undertake. Which is either taking on 

additional debt, or change of ownership, operations, and 

other restrictions, and in essence gives them a lot of 

control over the institution. So, the scenario where we 

would welcome comment and input, if there's further 

distinctions that we should look at here, that'd be very 

helpful.

MR. MARTIN: Thanks, Steve. I do want 

to echo what Steve just said, that we do welcome 

comments on this.

MR. WAGNER: Alright. Barmak, you're 

up.

MR. NASSIRIAN: As a graduate of a 

Catholic institution, I can tell you that Georgetown and 

Notre Dame are owned by the Jesuit order, not by the 

Catholic Church. More importantly, I think with regard 

to the faith-based institution issue, to whatever extent 

faith, the affiliated order, or religious authority 

exercises control, that control tends to be curricular 

and academic, not financial and administrative. So,

there is a distinction there. I think what the 
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Committee Meetings - 01/21/22

Department is going after is control of administrative 

and financial decision making at the institution, not 

whether the Pope speaking at its cathedral is 

necessarily a case of infallibility. Be that as it may, 

it is, but a separate conversation. A couple of thoughts 

here. One, subpart (A), the 50 percent control is really 

inadequate for publicly traded. It's generally 

inadequate, but it's particularly inadequate for 

publicly traded corporations because very rarely does a 

publicly traded organization, a corporation, have one 

person controlling 50 percent. I mentioned this 

yesterday. The SEC defines insider shareholders as 

anybody that controls 10 percent or more of the shares 

in a publicly traded corporation. So that, to me, that's 

a huge thing. Secondly, even with even with smaller 

corporations, what you probably want is the single 

largest shareholder, whoever that is. It may be that 

they only own 49 percent, but then the rest of the 

shares are owned by 100 people. That doesn't mean that 

49 percent equity ownership doesn't give that one 

individual control. So, I would modify that in 

appropriate ways to make sure that you're capturing 

everybody. The other point I wanted to make is that 

there are nonprofits, let me rephrase that, there are 

publics and nonprofits that may that may form a sole-
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Committee Meetings - 01/21/22

member subsidiary, a sole-member, nonprofit subsidiary,

and it seems to me that that parent entity needs to sign 

as well. I don't know that this requires it. Subpart 

(C), “if an entity is the 100 percent direct interest 

holder of the institution,” can you define what that 

means? I don't quite understand what that means.

MR. MARTIN: I'll take that back, 

Barmak. I'm not 100 percent sure. I want to make sure 

that I get that correct, so I'll inquire about that.

MR. WAGNER: Yael?

MS. SHAVIT: Thank you. A couple of 

things. One, I want to echo what Barmak was just saying 

about the 50 percent ownership threshold, and I think 

that those ideas make sense and offer a more realistic 

picture of how these institutions and how ownership 

actually works. But more broadly, I wanted to just lend 

support to what the Department is trying to do here. I 

think that it's critical to capture control over 

institutional decision making in this regard for these 

regs to be meaningful, and I think this is an important 

effort. And just for members of the public who aren't 

able to see the comments, I want them to know that 

representatives from accrediting agencies and state 

authorizers have also noted that this type of language 

is consistent with the with issues that authorizers and 
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Committee Meetings - 01/21/22

accreditors face as well.

MR. MARTIN: Thank you.

MR. WAGNER: Let's see, we have Brad,

and then Debbie back up.

MR. ADAMS: This is not something 

through the comments being made by the committee 

members, this is directly related to publicly traded 

institutions. I'm just curious if the Department intends 

to try to pierce the corporate veil and hold individual 

stockholders liable under this pronouncement?

MR. MARTIN: Well, what we're doing 

here is, I think we don't reference stockholders. We're 

talking about an authorized representative of an entity. 

So, we're looking at the entity that has direct or 

indirect ownership of the institution and an authorized 

representative of that entity having signed the PPA. I 

don't think there's a reference here particularly to 

stockholders.

MR. ADAMS: Maybe Barmak could add 

more to that, I know he brought that up in the past few 

days.

MR. WAGNER: I see Debbie.

MS. COCHRANE: Okay. I am looking at 

the language, and I'm trying to understand the 

Department's intent. I'm wondering why, we would have a 
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Committee Meetings - 01/21/22

PPA signed by, it looks like it would be effectively two 

people: an authorized representative, and one of 

presumably several people who have the power to exercise 

control over the institution. I guess I'm trying to 

think about why that would be just one of the people who 

has substantial control over the institution, and kind 

of thinking about how some of that would even play out,

and whether that undermines the goal of what the 

Department's trying to get at here.

MR. FINLEY: I'll take that one, Greg. 

The people that are signing are authorized 

representatives of those entities. So, this is not 

piercing the corporate veil. It is actually requiring 

the higher-level entities to directly sign the contract 

on behalf of the institution as well, so an authorized 

representative of an entity is binding that entity to 

meet those obligations.

MS. COCHRANE: They would be the one, 

but I guess under (3), romanette two it would only be,

if there are five people have that have the power to 

block significant action, say only one of them would be 

flagged under this. Is that correct?

MR. FINLEY: The entity that's 

required to sign would be responsible. If you'd like to 

suggest some clarifications there, we will be happy to 
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Committee Meetings - 01/21/22

consider them, but that's kind of where we're trying to 

go.

MR. WAGNER: Is that it, Debbie? Okay. 

Let me just make sure I don't see any additional hands. 

Do you want to take a temperature check, Greg, on 

668.14(a)?

MR. MARTIN: Yes, why don't we do 

that?

MR. WAGNER: Okay, everyone, you know 

the drill. Make sure we can see your thumbs. Thank you. 

Okay, I see one thumb down. If you'd like to make any 

comment, that's great. If not, we can move on. Okay. 

Alright, Greg, would you like to move on to the next 

section, 668.14(b)?

MR. MARTIN: Sure. Let's move on to 

discussion (b) here. By entering into a program 

participation agreement an institution agrees that the 

Secretary, guaranty agencies and lenders, nationally 

recognized accrediting agencies, the Secretary of 

Veterans Affairs, state agencies recognized under 34 CFR 

part 603 that legally authorize institutions and branch 

campuses or other locations of institutions to provide 

postsecondary education, and we have added here state 

attorneys general, have the authority to share with each 

other any information pertaining to the institution's 
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Committee Meetings - 01/21/22

eligibility for participation in the Title IV, HEA 

programs or any information on fraud and abuse. And we 

propose to add state attorneys general to the list of 

entities included in the information sharing related to 

Title IV participation for fraud or abuse. This 

recognizes that AGs play an important role in the 

oversight of colleges, and we believe this edit will 

provide greater clarity about that importance. Moving on 

to (b)(26), you'll notice this is not a change, but we 

do highlight this text and I'm about to read, but I 

pointed out earlier when we did the overview a summary 

of what we propose to do here. The Department is aware 

of significant variation across states and the minimum 

required length of programs tied to licensure in many 

states in a variety of fields. Otherwise equivalent 

programs that require many more hours, and once they can 

lead students in that state to spend more time in 

school, take on more loan debt. So, we already discussed 

that and I will move to the Department's seeking 

feedback on the appropriate maximum length of time for 

gainful employment in a program in the situations where 

the equivalent programs have substantially different 

lengths. The Department would not limit the discretion 

of states to establish program length requirements, but 

is concerned about the costs to students providing aid 
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Committee Meetings - 01/21/22

eligibility beyond the minimum required for state 

licensing. So, let's read that language that we 

currently have in and would remain. Right now, we have 

not offered any amendatory text at this point. If an 

educational program offered by the institution is 

required to prepare a student for gainful employment in 

a recognized occupation, the institution must 

demonstrate a reasonable relationship between the length 

of the program and entry-level requirements for the 

recognized occupation for which the program prepares the 

student. The Secretary considers the relationship to be 

reasonable if the number of clock hours provided in the 

program does not exceed the greater of 150 percent of 

the minimum number of clock hours required for training 

and the recognized occupation for which the program 

prepares the student as established by the state in 

which the institution is located, if the state has 

established such a requirement or as established by any 

federal agency, or the minimum number of clock hours 

required for training in the recognized occupation for 

which the program prepares the student as established in 

a state adjacent to the state in which the institution 

is located; and establishing the need for training for 

the student to obtain gainful employment and the 

recognized occupation. So, giving you the current 
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Committee Meetings - 01/21/22

regulatory text and opening it up to a discussion of 

whether or not we should retain this or what we might do 

differently here.

MR. WAGNER: Aaron, if we could stop 

sharing, that would be great. Okay Brad, I see your hand 

and then Barmak.

MR. ADAMS: I want to say out of the 

gate. So, we completely agree that if an institution 

operates a professional licensure or certificate 

program, for the licensure, then the state... Actually, 

you know what, I am off one section, I'm on 32 here. I'm 

going to come back. I have a different comment on 26. I 

apologize.

MR. MARTIN: No problem. We'll get to 

32 shortly.

MR. WAGNER: Okay, Barmak.

MR. FINLEY: So in section 17, first 

of all, I certainly support the inclusion of AGs in the 

list that is enumerated in current law, but I'm 

wondering why we cite the Secretary of Veterans Affairs 

and we do not include the Secretary of Defense? The DOD 

runs a significant educational assistance program, the 

tuition assistance program, and should probably be 

listed there. In addition to which, it seems to me that 

we would probably want to allow CFPB data sharing as
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Committee Meetings - 01/21/22

well, so that would be two suggestions. At the very 

least, we can have a conversation later on about 90/10. 

The Department apparently wants to publish a longer list 

of agencies that provide student assistance. And my 

assumption is that all of those agencies ought to be 

able to share data with each other. But at the very 

least, to the extent that you mentioned the Secretary of 

the VA, the Secretary of Defense ought to be listed here 

as well because DOD runs a significant tuition 

assistance program. Second point I wanted to make has to 

do with the peculiarity of allowing 150 percent of the 

minimum required number of hours in your state, but only 

the minimum requirement in adjacent states, which is 

basically a formula that says the algorithm produces the 

higher of either 150 percent of yours or whatever is the 

highest minimum required elsewhere if they're adjacent. 

That just doesn't make a lot of sense to me. Can you 

explain how that was arrived at and why?

MR. MARTIN: Sure. So, this came out 

of the Distance Education and Innovation package that 

was done under the previous administration. The 

justification for this, and I'm not saying that it's my 

justification or the Department's current opinion, was 

that there are instances where a student could be in a 

state and one that was commonly cited was, for instance, 
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Committee Meetings - 01/21/22

areas like New Jersey, New York, Connecticut, where you 

have a high population in a very compact area, and it 

could be the case that somebody wants to receive their 

education in one state and then practice in another, but 

those requirements are different, so that it would allow 

the students in the one state to take the program. To 

allow that institution. that may have numerous students 

who want to actually be licensed to practice in this 

adjacent state. to get the number of requisite hours 

that they would need to do that. There was no accounting 

for things like MSAs. I'll give you an example of the 

way it's currently written: you could have a student in 

a school in Key West Florida, and there could be a 

different standard in Alabama, that's probably an 11-

hour drive or something. So, it wasn't like an MSA, it 

just literally meant adjacent state. But that was what 

it was meant to accommodate, Barmak. And the reason why 

it's the minimum at the other state is so that, if the 

student needed the hours to be in the other... I don't 

want to say students. The program needed to be such that

it met the requirement of another state, then it could 

just be up to the minimum required in that state and no 

more. So, I hope that that explains it.

MR. WAGNER: Okay, Brad, your next.

MR. ADAMS: I think Johnson has his 
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Committee Meetings - 01/21/22

hand up in front of me.

MR. WAGNER: Okay, Johnson. Johnson is 

stepping in for Jessica Ranucci, representing legal 

assistance organizations. You're up.

MR. TYLER: Oh, thanks Brad. Thanks, 

Kevin. Just a small note on the adding the attorney 

generals, it's come to my attention, and not knowing who 

to complain to about actions, that there's this thing 

called Sentinel, which the Federal Trade Commission 

uses, where you can, if I complain to the local consumer 

agency in New York City, it uploads that information 

into a federal database that's accessed by many entities 

so that they can then have access to forms of 

information from all different sources. So, I think this 

(17) is too limited just having AGs added to it. I think 

you just want to figure out how to get everyone in 

there. The Department of Consumer Affairs and the local 

communities are sources of information about the schools 

within that area, and their information should be used 

as well. Thank you.

MR. MARTIN: Thank you. I'll take that 

back.

MR. WAGNER: Okay, Brad and then

Barmak.

MR. ADAMS: Thank you. Back to (26)
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Committee Meetings - 01/21/22

now, off of (32). So first, I just want to point out 

that the Department is proposing treating institutions 

differently. The Department does not impose a 120 or 126 

credit hour cap on a bachelor's degree, but essentially 

that's what they're trying to do here for clock-hour 

programs. But on the proposals on the table in the 

comment, we think the first two are better than the 

third. The third option attempts to inappropriately use 

national medians for something that is entirely 

regulated at the state level. State legislators set 

these standards. If the Department has a problem with 

the clock requirements being too high, those comments 

should be directed to the states. In practice, the third 

option would make it hard for institutions to operate if 

they are in a state that requires students to earn more 

clock hours than the national median. I feel this is an 

attempt by the Department to strong-arm the state 

legislators to change licensing requirements. That's not 

really the role of the Department, so I think the third 

option is particularly bad. Thank you.

MR. MARTIN: Thank you.

MR. WAGNER: Okay. Barmak, you're up.

MR. NASSIRIAN: I appreciate the 

response that Greg gave to my question. I would strongly 

urge the Department to, first of all, consider reducing 
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Committee Meetings - 01/21/22

the 150 percent to no more than 125 percent. There is no 

reason, if the minimum threshold is X, for the 

Department to allow 50 percent more than thatJust that 

margin strikes me as way too long. And I would also 

limit the extent to which adjacent states’ requirements 

factor in. There is some sort of a proximity definition, 

right? I mean, out west the adjacent state could be 

hundreds of miles away. And furthermore, I don't know 

how we deal with distance education here. Should it be 

pegged to where the student is located in the case of 

programs delivered primarily via distance?

MR. MARTIN: Thank you.

MR. WAGNER: Okay, Jessica, you're 

back in for Johnson and you're up. No?

MS. RANUCCI: Yeah, sorry, I just 

lowered my hand.

MR. WAGNER: No problem.

MS. RANUCCI: I just want to briefly 

say that I think that this is really important to think 

about. We're talking about gainful employment programs 

here. The whole point of those programs is to prepare 

students for jobs. Many of us might have gone to 

[inaudible] and gotten bachelor's degrees where we took 

a poetry class or something for our own edification. And 

I think that that is not what we're talking about here. 
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Committee Meetings - 01/21/22

And I think that treating these programs very seriously 

is important. I don't know how to say it right, but this 

is the exact kind of program where people can get 

saddled with lots and lots of extra debt, and I think 

we've heard that from some of those public commenters. 

So, it's important and I appreciate what the 

Department's trying to do.

MR. WAGNER: Thank you, Jessica and 

Debbie, you're up.

MS. COCHRANE: At the risk of jumping 

ahead a slight bit, I think that actually this question 

really relates also to (32), romanette two, which we're 

going to get to, and also one. Anyway, the question of 

whether a program has the requisite state approvals, I 

think the most important piece here, rather than 

thinking about adjacent states, is really around whether 

the program is appropriately training people for the 

states in which they will be working. And I think that's 

going to be really important when we get to (32), not 

just about the state where the program is located, but 

also anywhere where the program is being offered. But I 

bring that up here because I think it's not just the 

number of hours that's relevant here. Each of these 

programs that has an hour requirement has specific 

classifications for each of those hours. Maybe 
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Committee Meetings - 01/21/22

California has 200 hours in health and safety, but 

Nevada has 250. So, it's not just about the number of 

hours, it's about the number of hours in the right 

configuration. So, I kind of think that maybe getting at 

this problem through the requisite certifications might 

be a more effective path than just looking at a blunt 

instrument like ours.

MR. MARTIN: Thank you.

MR. WAGNER: Thank you. Laura, you're 

up.

DR. KING: I just had a clarifying 

question related to this one. It's written only in clock 

hours, and other folks have alluded to it, but is there 

a credit-hour conversion that you're using, or is this 

really intended only for clock-hour programs? And I'm 

asking because there are GE programs in community 

colleges, for example, that I'm thinking of that are 

credit-hour not clock-hour programs.

MR. MARTIN: Yeah, that's an excellent 

question, and let's see if I have an excellent answer. 

You were right to say that there are many of these types 

of programs that do operate with credit hours, 

especially with clock- to credit-hour conversion. 

Whether or not that is the case for the purpose of 

enforcing this particular provision has been a matter of 
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Committee Meetings - 01/21/22

it's not specified in regulation, so what's specified is 

its clock hours, and it's not laid out whether that 

applies to credit hours. That's been a matter of ED 

policy, how can I say this, that has evolved depending 

upon leadership. So what I could do, what I will try to 

do, is take that back and see what the call on that 

would be per for where we are now. And I guess your 

question is, if an institution offered the program in 

credit hours, would they be completely exempt from this 

or would we do some type of a conversion back to see 

what the applicable number of clock hours was? I'm going 

to go on a limb here and say that I believe we would 

convert that, but I will need to check with our 

compliance people and leadership first before I can make 

a definite statement about that. But it was a very good 

question.

DR. KING: Thank you. It would 

definitely be helpful to know that, I think, in 

considering it.

MR. MARTIN: Steve, do you want to add 

to anything I said?

MR. FINLEY: Yeah, I certainly agree 

with Greg saying we'll take it back. I mean, these 

programs are designed to be subject to the restrictions 

established by the state licensing requirements to 
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Committee Meetings - 01/21/22

practice in these fields. So, if we're talking about 

state licensing requirements that also speak to credit 

hours as well, that's something we'll consider when 

we're taking it back.

MR. MARTIN: Thank you, Steve.

MR. WAGNER: Thanks, Steve. Brad, 

you're up.

MR. ADAMS: Thank you. I put this in 

the chat, and I just wanted to reference it for the 

public, I do agree with Jessica's point. From a gainful 

employment perspective, let's pick cosmetology just 

because it's easy, if salary is equal across the country 

but states have varying hour requirements, and if hours

equal more cost, students that live in states with a 

higher hour requirement, that's a higher cost. The 

program would be at a disadvantage from a gainful 

employment perspective. So that's comment one, and then 

I’m just curious if the Department has ever limited 

Title IV eligibility in the way it proposes, and what is 

the statutory authority for this change?

MR. MARTIN: We've not limited, this 

regulation changed with the Distance Education and 

Innovation rules. So, before that, there was just a 150 

percent minimum, just the requirement. So we had those,

and I don't know when that went into effect, but it has 
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been a long time, so the statutory authority had been 

established. The more recent rule, which was, I believe, 

effective July 1, 2021, but couldn’t have been really 

implemented, was what allowed for the adjacent state. 

So, we determined at that time that we had the statutory 

authority to open that up, because that was the thought 

at the time, about allowing schools to have a program 

with more hours to accommodate the minimum requirements 

in adjacent states. So, I don't think the statutory 

authority changes here from the rule we had before this 

rule to this rule here. And I just want to remind 

everybody that this is not a change. What you see here 

is existing regulation. We have not yet provided any 

redlines for the change. What we're asking all of you is 

if you have any ideas for how this might be different, 

or do you like the way it is currently and think that's 

the best way to have it? Or should there be, as I think 

Barmak suggested, some type of accounting for reasonably 

contiguous areas like MSAs or some other type of 

arrangement?

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

this. Oh, I do see a hand. Johnson, if you could come on 

camera.

MR. TYLER: Yeah, hi, I'm sorry.

MR. WAGNER: No, no problem, you're 
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Committee Meetings - 01/21/22

in.

MR. TYLER: Yeah, I just want to 

respond briefly to something Brad said, and what the 

Department is trying to achieve here. There was an 

article about, I think it was the state of Iowa, which 

has a huge number of credit hours needed to become a 

hairdresser or cosmetologist. And this is, you're asking 

a gainful employment school to certify that they've 

taken into consideration what those requirements are 

when they open a school, and with respect to gainful 

employment, whether they're going to meet that mark. So,

it seems to me that in Iowa, if I have the state right, 

they don't want any more hairdressers because they're 

created such a barrier to entry that there shouldn't be 

a school training people to become hairdressers in that 

city. And as a lawyer, I'm sort of familiar with this 

because, you see, you pass the bar in New York, but New 

Jersey doesn't want you, and they don't want you because 

they want to protect the New Jersey lawyers. They don't 

want more people in there, and vice versa. So, I think 

it's a political process, and I think all the Department 

of Education is saying, if you're going to open a school 

here, make sure gainful employment is going to work.

MR. MARTIN: Thank you.

MR. WAGNER: Thank you. Greg, would 
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Committee Meetings - 01/21/22

you like to take a temperature check on 668.14(b)?

MR. MARTIN: No. We need to move on to 

one more section there, (32). And before I do that I've 

been asked to clarify, I think maybe it wasn't brought 

up at the table, but maybe in some of the chat here. So,

I want to make clear to everybody (that's not so much 

the table, which knows that) that although the chat is 

not being shared in real time, it is part of the record 

and will be shared with the transcripts. So, the chat 

that is going on is not something which is only to be 

seen by members of the committee, it's just that we 

don't have the means of sharing that real time. We do 

have to worry about 508 compliance and whatnot, but 

there will be access to that, so I just wanted to make 

that clear. And now we'll move on to (b)(32). And here 

we talk about language requiring that an institution 

offering a program that leads to an occupation that 

either requires programmatic accreditation per state or 

federal requirements, or requires the program to meet 

certain licensure requirements, meets those 

requirements. We are aware of examples of programs that 

enroll or previously enrolled students in such programs 

without meeting the requirements, where most students 

struggle to find employment and often take on student 

loans to finance a virtually worthless credential. We 
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Committee Meetings - 01/21/22

propose this language because we believe all programs 

financed by taxpayers should meet the minimum 

requirements for the field in which they prepare 

students. So, let's take a look at what is proposed in 

(32). In each state in which the institution is located, 

or in which the institution is otherwise required to 

obtain state approval under 34 CFR 600.9, the 

institution must ensure that each program is 

programmatically accredited, if such accreditation is 

required by a federal government entity or by a 

governmental entity in the state, and ensure that each 

program satisfies the applicable educational 

prerequisites for professional licensure or 

certification requirements in the state, so that the 

student who completes the program and seeks employment 

in that state qualifies to take any licensure or 

certification exam that is needed for the student to 

practice or find employment in an occupation that the 

program prepares students to enter. So, I'll open it up 

for discussion.

MR. WAGNER: Carolyn, I see you're 

first.

MS. FAST: Thank you. I think this is 

a really critical protection that the Department is 

proposing that is very, very much needed to protect 
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students. Students put a lot of trust in their 

institution, and assume that if their institution is 

offering a program to them, that that institution is 

going to lead to employment, and they should expect that 

from their school. So, I think that's a minimum kind of 

requirement, that I would really be surprised that 

schools would object to, that they would be providing a 

program that would lead to licensure in the state to 

people. So, I really think this is a minimal requirement 

that should not be looked at as a burden, but really 

just as the very least it could do in offering a 

program. But in terms of the actual language here, I do 

have one concern, which is that I want to make sure that 

students who are enrolled in distance education programs 

have the same protections as brick-and-mortar students. 

And I think that that is intended by this provision, but

the way it's written it's a little bit unclear. So, I 

would suggest that the language be changed so that 

instead of referring to the state authorization 

regulation, that either that would be clarified to make 

it clear that that applies to distance education 

students, or that the provision be rewritten so that it 

refers just to ‘in each state where an institution 

offers a program’ rather than linking it to the 

authorization. Because my understanding is that it's 
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Committee Meetings - 01/21/22

possible to be, let's say, in Arizona and be enrolled in 

a distance education program that's geared toward a 

particular profession, such as teaching, and to have 

that program be offered without necessarily having to be 

required to be authorized by the state, depending on the 

laws of that state. And also, there is some confusion in 

here because of the reciprocity agreements we're working 

here. So, my suggestion would be, rather than referring 

to the authorization recommendation, I would just say 

where a program is offered in a state, it has to lead to 

licensure.

MR. MARTIN: Thank you. So, I just 

want to clarify a little bit. So, you would be 

suggesting that it be made clear that, in a distance 

education environment, that wherever the student is,

that it be that the program meet the licensure 

requirements for that student in that state based on the 

student's residence?

MS. FAST: That's right. Because my 

understanding is that if a school is going to offer a 

program to students in that state, then at minimum they 

should ensure that that student can get a job in that 

field that's a career-oriented program.

MR. MARTIN: Okay, thank you.

MR. WAGNER: Brad, you’re next.
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Committee Meetings - 01/21/22

MR. ADAMS: Thank you. I just want to 

start off by saying that our industry completely agrees 

that if an institution is offering a professional 

licensure or certificate program with a license or 

certifications required for a graduate to enter the 

profession, the school should be sure that its program 

is providing the necessary educational and state 

prerequisites. But the language here needs to be clear 

that we're talking about professional licensure or 

certification, which is required under the law for the 

student to practice in the state. The phrase “needed”

which is used here is a little vague, especially given 

that many types of licensure or certification are 

optional. Also, to add to what Carolyn just said about 

distance location or distance education, is it the state 

where the school is located in, or is it the state where 

the student is located? In the case of distance ed, 

those may be two different things.

MR. MARTIN: Thank you, we'll seek to 

clarify that.

MR. WAGNER: Okay, Jessica, I see 

you're next.

MS. RANUCCI: Thanks. I just want to 

echo everything Carolyn said. And just, you know, this 

is a real problem. It's one of the things we see in our 
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Committee Meetings - 01/21/22

office all the time, and I think you know what this 

looked like. We heard last night from someone who talks 

about what it looks like, the paralegal program, in my 

office, this is often--for example, a working adult who 

currently has a low-wage job as a medical assistant who 

says, ‘oh, I think I would like another job in the 

medical field. I'll try and become a cardiac 

stenographer, someone that takes ultrasounds of your 

heart.’ That's not a program you go to for fun, right? 

It's not, it's a lot of money and you're saddled with a 

lot of debt. And if in fact you don’t get a job as a 

cardiac stenographer, it really was a waste of time. And 

so I just want to emphasize how important this is. One 

very minor point on subsection one, I'm not sure this is 

a question for Laura, if there are any circumstances 

under which an institutional accreditor would require 

that certain programs be programmatically accredited? 

But if so, I would think that that would also be 

important to add in to romanette one, because if the 

institutional accreditor thinks programmatic 

accreditation is important, then I think the school 

should be required to do that.

MR. MARTIN: Thank you.

MR. WAGNER: Thank you. Laura.

DR. KING: To answer Jessica's 
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Committee Meetings - 01/21/22

question, I'm the programmatic accreditor 

representative, Jamie can add it in the chat. I'm not 

aware that any institutional accreditors require 

programmatic accreditation. You know, certainly they 

support it, but not aware that they require it. I wanted 

to, so first of all, I really applaud the Department for 

taking a stab at this particular provision. Back in 2019 

when we were negotiating, we talked about this and then 

we ended up on the disclosure provision instead. And so 

I wanted to kind of talk about this in combination with 

the elimination of the disclosure provision, because I'm 

not sure that requiring programmatic accreditation will 

necessarily eliminate the need for some disclosure. Now, 

perhaps the disclosure that is required right now in the 

regs is not the right disclosure if accreditation is 

required. But I think we need to kind of ferret out what 

that might be. There are some occupations that may have 

requirements in licensure that don't have programmatic 

accreditors. So that's something to consider. I think 

some of the language addresses that. But just to kind of 

put that on the table, there also may be general 

accreditation but also certifications within that 

general accreditation in different subspecialties, and 

this might be a place where disclosure is required. So, 

for example, a student may enroll in a counseling 
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Committee Meetings - 01/21/22

program, but does that mean that they're able to take 

the certification exam for marriage and family, or for 

alcohol and drug abuse counseling, or school counseling?

So that might be a place where disclosures are 

necessary. The other thing actually Brad raised with the 

language about needed prerequisites because there are 

certifications that are required in state law or federal 

law, but there are also certifications that are broadly 

accepted within occupations and professions that might 

not be required in law, but in practice are really 

needed to get a job or to practice in the profession or 

the occupation. So, I think that I'm arguing kind of the 

separate the opposite point for distance Laura is trying 

to make, but I think that's really important. And then 

the second item I wanted to get on the table is related 

to timing and implementation. Some accreditors will not 

accredit until programmatic accreditors and a lot don’t 

accredit until a class has gone through. So, our program 

is required to get accreditation prior to offering the 

program or within some reasonable timeframe. I know I'm 

out of time for this one, but I'm happy to circle back 

to that since it is a welcomed issue.

MR. MARTIN: Thank you.

MR. WAGNER: Thank you, Laura. Yael, 

you're up.
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Committee Meetings - 01/21/22

MS. SHAVIT: Thanks. I just wanted to 

offer a state enforcement perspective on this issue and 

note that this is one area where I think I speak very 

comfortably for all state AGs on this. We see countless 

students fall into exactly this problem, where they 

participate fully in programs with a specific goal of 

having a professional outcome that was very obvious to 

the schools that enrolled them, that were misled either 

explicitly or through omission throughout the entire 

process, expecting they would be able to work in that 

profession and ultimately weren't able to. And it is a 

huge, huge problem. I think it's critical that the 

Department is taking it on this way. This is truly 

essential, and there are two other points that I want to 

piggyback on here. It is completely critical that we 

ensure that distance the Department is included here. If 

a school wants to be enrolling a student from out of 

state, they increase its student body and its coffers 

presumably. It needs to ensure that it is only enrolling 

students who will be able to actually benefit from the 

professional certification or licensure that they're 

hoping to achieve in the state that they live in. And if 

that's a problem for schools, they shouldn't be 

enrolling students from out of state. So again, this 

goes back to this is a choice the school is making. To 
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Committee Meetings - 01/21/22

participate in distance ed, they should make sure that 

students are getting what they expect to be getting. And 

my final point is that I agree fully that ‘required by 

law,’ the suggestion that Brad put forward, isn't 

workable here. It's simply too narrow. It's not 

consistent with the reality of a lot of the professional 

fields that these students are entering. This is 

something that schools that are offering professional 

certification programs in those fields are or should be 

well aware of. I think ‘needed’ is appropriate, and it's 

something that these schools should understand and 

incorporate into their decision making and they're 

ensuring that whatever they're offering is sufficient 

and that allows students to get employed in the 

professions that they're seeking to enter.

MR. MARTIN: Thank you.

MR. WAGNER: Barmak.

MR. NASSIRIAN: So, I also strongly 

support what the Department is attempting to do here. I 

would suggest that under romanette two where it reads 

“ensure that each program satisfies the applicable 

educational prerequisites” that you add to 

“educational,” something--I'm not a regulatory draft 

person--but praxis MSA prerequisites. Because it's not 

just a specialized accreditation issue, it's also 
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Committee Meetings - 01/21/22

whether the appropriate internships and clinical 

placements are available to students for them to ever 

qualify to sit for licensure. So, that's one suggestion. 

The other suggestion has to do with the fact that we do 

have non-programmatically accredited institutions, 

typically law schools, for example, that go through the 

loophole of like one state not requiring ABA 

accreditation. This happens in California, where 23 law 

schools do not have ABA accreditation, 11 of which 

actually participate in Title IV, through the loophole 

of suggesting, of explaining to students, that well, of 

course you can become an attorney, guess where? In 

California, because California, unlike every other 

state, does not require ABA accreditation as a 

prerequisite for licensure to sit for the bar exam. So, 

in addition to ensuring that any distance ed delivery 

satisfies the requirements for licensure where the 

student happens to reside, it's also important to at the 

very least require disclosure or, ideally frankly,

prohibit institutions from enrolling students that they 

know will be going back to a state where that program 

does not meet licensure requirements.

MR. MARTIN: Thank you.

MR. WAGNER: Thanks, Barmak. Debbie, 

you’re next.
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Committee Meetings - 01/21/22

MS. COCHRANE: I want to slightly 

refine two points that have been made. One is just 

there's been a lot of talk about online education, and I 

wholeheartedly agree institutions should not be 

enrolling students from states in which their programs 

do not prepare students, but I really want to emphasize 

that is not just online education. Even when we were 

just talking about the prior point, we're talking about 

contiguous states, we're talking about MSAs, and that 

should not be. This is just a critical point to add to 

this provision for online students and brick-and-mortar

students, so I want to put that out there. And also, I 

definitely agree with the way that this is interpreted 

needs to be a practical reality for students. But I also 

fully agree with some of the comments that Laura made,

that I don't think any language here will actually 

nullify the need for disclosures, because there are 

going to be some fields where you get a leg up. It's not 

necessarily a requirement, but there is a leg up if you 

have certain certifications, and dental assisting is a 

good example of that. Massage therapy might be another 

one. So, I know again, jumping ahead a little bit, but I 

want to put that out there, that while this can be 

strengthened, we're still going to have to look at the 

disclosure piece.
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Committee Meetings - 01/21/22

MR. MARTIN: Thank you.

MR. WAGNER: Brad.

MR. ADAMS: I want to voice quickly 

again, as I referenced earlier, “needed” is my concern 

here. You could argue, as I mentioned in the chat, that 

a CPA is needed to get a job in accounting, but you can 

get a job in accounting with an accounting degree living 

in both of those worlds. And, an anesthesia assistant 

versus CRNA is another example. Anesthesia assistant is 

only recognized in about 16 or 17 states, and so they 

deal with that issue all the time. So, I really think 

that's a state and programmatic accreditor discussion. 

I'll defer to those experts on it. Medical assistance is 

another one where in certain states it's strongly 

suggested, if not required, and then there are others, 

it is not. And so again, the regional accreditors tend 

to defer to the programmatic accreditors here. So again, 

I'll defer to the other experts, but I do believe 

“needed” is not, can be interpreted in many different 

ways. Thank you.

MR. WAGNER: Thanks, Brad. We have 

Ernest.

MR. EZEUGO: Excuse me, thank you. 

Excuse me. I would just like to take a moment to harken 

back to some of the public comments provided by students 
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Committee Meetings - 01/21/22

here, throughout the course of the week, as a way of 

emphasizing that students don't often, if ever at all, 

intend on applying to, paying money to enroll in 

institutions that will profit on immediate, after of 

course graduating successfully benefit to the places 

where they live in. And a lot of the comments from 

students, particularly about needing to and kind of a 

focus on distance ed, about needing to attend programs 

that could that could acquiesce to their schedules, I 

just want to harken those comments and kind of support 

of this idea about making sure that, especially for 

institutions the need for including distance ed here, 

especially the institutions who are offering distance ed

to students not in their states, are being considered 

and protected here. Most institutions are making sure 

that these students can go and participate in whatever 

certifications are necessary, for instance, for jobs in 

their in their state where they reside. And I just also 

wanted to support the idea of talking about “needed”

language here, and kind of refute the idea of really 

limiting that by changing the language to “required.”

And, I did that in the chat, but just wanted to get that 

over a comment as well, because recognizing the chat is 

not going out live to folks. That's all for the time 

being.
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Committee Meetings - 01/21/22

MR. MARTIN: Thank you.

MR. WAGNER: Thank you. Laura.

DR. KING: I just want to circle back 

around to the idea of timing, and this might be a 

question for you, Greg, I'm not sure. With this added 

language about required programmatic accreditation, I 

mentioned this at the end of my last comments. There are 

some programmatic accreditors that, because outcomes 

data require the program to be run through at least one 

time, to have graduates from the program so that we can 

look at the data and make an accreditation decision, so 

the timing can be a bit chicken and egg, depending on 

what the requirement is. So, I don't know if the intent 

is that the program would be accredited as a condition 

of being approved? Or would it be that they have to 

obtain accreditation within a reasonable timeframe? You 

know, I can help think what that is, but I'm not exactly 

sure on the timing issue, although I absolutely support 

the inclusion of this, I just want to get it right.

MR. MARTIN: As written, it would be 

each program would have to have programmatic 

accreditation, currently have it in full.

DR. KING: Okay, so yeah, we might 

want to add in, let me think about that. Just because 

there are a variety, this is kind of where we ended up 
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Committee Meetings - 01/21/22

in 2019 to try to figure this out. There are a variety 

of approaches that programmatic accreditors use, and a 

lot of times there are safeguards in professions related 

to certification. But there are a lot of programmatic 

accreditors, so I can't guarantee that that would be the 

case in every instance. But it's something to consider.

MR. MARTIN: The intent here, 

obviously, is to make certain that students who are 

enrolled in these programs know going in that the 

program has the accreditation that's necessary for that 

individual to practice, to be licensed in the field. 

That's certainly what our primary concern is. That’s

something students can rely upon, so that would mean 

that the program would have that programmatic 

accreditation in hand if it's required.

DR. KING: Yeah, and I think that 

makes sense, I think it might require some changes on 

behalf of some of the programmatic accreditors, but 

yeah, thank you.

MR. MARTIN: If you have concerns 

about language, please submit that to us.

MR. WAGNER: I see Jessica.

MS. RANUCCI: I think this is implicit

in what you were saying, Laura, and I don't deny it's a 

hard problem, but I would say, on the other hand, one of 
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Committee Meetings - 01/21/22

the most common things we hear from students is that the 

school will represent that accreditation is in progress 

or going to happen or going to happen by the time they 

graduate. So, I think it's important that whatever fix 

doesn't create a loophole that allows that to continue 

because it really [inaudible].

MR. WAGNER: Sorry about that. Brad.

MR. ADAMS: Yes, sorry, I thought I 

was done on the section, and then I’ve got to respond to 

Greg's comment that that many, many, many programmatic 

accreditors, especially in the graduate levels, will not 

accredit your program until you actually graduate 

students and show results. A Doctor of Osteopathic 

Medicine is a perfect example. You can't give full 

accreditation on that program until after your four 

years and your students graduate and pass the test. So,

to say you have to have full programmatic accreditation, 

how could you ever have that before a student graduated? 

That was chicken or the egg. You'd never be able to 

graduate a student until understanding that you'd have 

to have that programmatic accreditation already fully 

approved. So, saying you have to have fully approved, 

you may be going through the process to be better 

wording, but programmatic accreditors would eat that 

alive.
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Committee Meetings - 01/21/22

MR. MARTIN: I'll take that back.

MR. WAGNER: Laura.

DR. KING: Osteopathic, so the health 

professions, you're not going to find that issue really,

because I talked about that as sort of covered in the 

preaccreditation. I think Brad's getting into a bit of, 

yes, Greg might not have used exactly the right word, 

but I knew what he meant. They have preaccreditation 

processes that are considered fully accredited in 

accreditation terms, so I don't think that that's a 

concern. There are accreditors that do require outcomes, 

mine is one of them, prior to accreditation, but those 

are also processes that can be modified depending on 

what's needed. So, just wanted to clarify.

MR. MARTIN: Thank you.

MR. WAGNER: Thank you, Laura. I don't 

see any other hands. Oh, Amanda, go ahead.

MS. AMANDA MARTINEZ: Sometimes I like 

to have the last word, not that it might make a 

difference in solving all the complexity of this 

specific part. But I do want to send a message to the 

Education Department to remind, and to remind folks who 

may not know, that distance, just the comments of making 

sure this language in particular is a form of 

accountability and ensuring quality education across the 
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Committee Meetings - 01/21/22

board for programs. And, I think also keeping in mind 

distance education students is extremely critical given 

the pandemic, the change that we've seen across the 

sector, right, that we've seen. According to recent data 

for fall of 2020, using IPEDS data, we see over 8 

million students are now in completely online distance 

education. While that's probably impacted by clearly the 

pandemic, and maybe that's by mostly brick-and-mortar

schools that uptick. In fall of 2019, just to show that 

distance education is now growing, there is about 3 

million students in fall of 2019. So that's without the 

pandemic involving there. So, it's still a significant 

amount of students, and what we know about the 

disaggregated breakdown by race and ethnicity of those

students, these nontraditional, which I would say 

actually nontraditional students, are the traditional 

students of today. More we see older students now are 

today's students. We see that more Black and Latino 

students are enrolling and making up a majority of

undergraduate students. So, students, when you look at 

those 3 million that they talked about in fall 2019, are 

most likely to be also a growing number of Black, 

Hispanic, or Latino, American Indian students. And we 

have for the latest data that shows that we can look to 

NPSAS data, which kind of gives you a proportion, like 
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Committee Meetings - 01/21/22

for Black students specifically, completely in online 

programs. About 15 percent of Black students are 

completely enrolled online, because this is even going 

back in 2016, the academic year of 2016. So, just to 

make sure we're ensuring protections at all costs, we're 

ensuring that federal aid dollars. Again, this is about 

federal student aid and access to that aid, and I really 

like what was stated before that access to this aid is 

not a right. It's a privilege. But at the end of the 

day, whose rights are we trying to protect? It’s 

students, and specifically those who have been 

disproportionately impacted in entering negative 

experiences. We want to avoid that scenario.

MR. MARTIN: Thank you.

MR. WAGNER: Okay. Just a time check, 

we're coming up, it's about 12:23. Greg, we still have 

some ways to go on 668.14. Do you think this is a good 

stopping point prior to the break, or should we take a 

temperature check?

MR. MARTIN: Let's do a temperature 

check on this paragraph, and then see if I could just 

introduce (e) if we have time. So let's take a 

temperature check on (b).

MR. WAGNER: Okay, great. Sure. 

Alright, everyone, you know the drill. This is a 
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temperature check on (b). Let's see. Okay, we have one 

hand down, I mean thumb, sorry. Is there anything you 

would like to add, Brad? Alright, thank you. Okay. Go 

ahead, Greg,

MR. MARTIN: I'll just introduce (e) 

and see where we are when we hit the lunch hour. So, we 

are offering here a non-exhaustive list of conditions 

the Secretary may opt to apply to institutions as 

appropriate. This will ensure greater monitoring and 

oversight of colleges about which the Department may 

already have concerns, and I'll list those out for you. 

But remember that this is a non-exhaustive list of 

conditions that the Department may require as a result 

of an institution being provisionally certified. So,

looking at (e), if the institution is provisionally 

certified, the Secretary may apply such conditions as 

are determined to be appropriate to the institution, 

including for an institution the Secretary determines 

may be at risk of closure, submission of a teach-out

plan or agreement to the Department and the 

institution's recognized accrediting agency, submission 

of a records retention plan to the Department, and the 

release of holds on student transcripts over a de 

minimis amount, and the release of all holds on student 

transcripts in the event of a closure. Restrictions on 
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the addition of new programs or locations. Restrictions 

on the rate of growth and enrollment. Restrictions on 

institutions providing a teach-out plan on behalf of 

another institution. Restrictions on acquisition of 

another participating institution, which may include 

posting of financial surety. Additional reporting 

requirements, which may include but are not limited to 

cash balances, an actual and protected cash flow,

student rosters, and interim unaudited financial 

statements. Limitations on the institution entering into 

an agreement with another eligible institution or 

ineligible institution or organization for that other 

eligible institution or ineligible institution or 

organization to provide between 25 and 50 percent of the 

institution's educational program. For an institution 

alleged or found to have engaged in misrepresentation to 

students, engaged in aggressive recruiting practices, or 

violated incentive compensation, requirements to submit 

marketing and other recruiting materials for review and 

approval by the Secretary. And, such other conditions as 

the Secretary may deem necessary or appropriate. And 

just to reiterate, the Secretary already has the 

authority to impose conditions on an institution which 

is provisionally certified, we just believe that this 

makes that more clear and lays out some of that in 
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regulation. So that's all of (e). It is 12:27, maybe we 

could provide maybe one comment before we go to lunch, 

but I'll leave that to the facilitators.

MR. WAGNER: Okay. We have two 

comments, I think we'll cap it at that just for now, we 

can always pick up after lunch, so we'll go ahead and 

take these two and then it'll probably be 12:30. So 

Jessica, you're up.

MS. RANUCCI: I'll be very quick. I 

support these. I think that they're great. Very minor 

point: I think the second half of romanette three under 

number one, which is requiring the release of all holds 

on student transcripts in the event of a closure, I 

think that should be pulled out to its own bullet point. 

I think that's a really important consumer protection. 

Getting transcripts from closed schools is really hard 

and obviously only happens in the event of a closure, so 

I don't see any reason why it should be limited only to 

schools the Department thinks are going to close. If the 

school ends up closing, the student should have the 

protection.

MR. MARTIN: Thank you. We'll take 

that back.

MR. WAGNER: Carolyn, you had a hand 

up, or are you down? Just checking. You're on mute.
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Committee Meetings - 01/21/22

MS. FAST: Sorry. I agree with 

Jessica's point. And in general, I just wanted to say 

that I also am supportive of this provision. I think 

it's very important, but it is reflecting what is 

already happening and that the Department already has 

the authority to do all these things. So, I just wanted 

to make sure that the way it's written doesn't have any 

unintentionally limiting effects, because the Department 

is able to impose conditions as it deems appropriate. 

Now this is just a way of providing additional notice to 

people that these are provided. So, what I would suggest 

is to make it more clear that this is not an exhaustive 

list by saying in (e) “including, but not limited to.”

And I would also not separate out the three things under 

(1) from the rest of it, because it seems to me that 

schools at risk of closure might need to have more 

conditions and vice versa, those conditions should not 

be limited to certain determinations, that the 

Department should have discretion to always be able to 

impose whatever conditions are relevant. So, I wouldn't 

necessarily lock them into separate sections. I would 

put them all in one. And we may have suggestions for 

additional conditions as well. I can stay after lunch.

MR. MARTIN: Okay, thank you. And we 

would, of course, entertain submissions. I do want to 
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point out, taking everything you said, but do want to 

just clarify that in number (9), we do say “such other 

conditions as the Secretary deems necessary or 

appropriate.” So, just want to note that. Alright, I 

think that’s back to the facilitators.

MR. WAGNER: Perfect timing. It is 

12:30. We'll take a 30-minute break for lunch. We'll be 

back with the live feed at 1:00 p.m. Have a good lunch,

and thanks for the discussion this morning. We can go 

off live.
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Committee Meetings - 01/21/22

Appendix

Department of Education, Office of Postsecondary Education 

Zoom Chat Transcript 

Institutional and Programmatic Eligibility Committee 

Session 1, Day 4, Morning, January 21, 2022 

 

From Barmak Nassirian (A) Servicemembers & 

Vets to Everyone: 

I am sitting in for servicemembers and vets for 

certification 

From Johnson Tyler, Brooklyn Legal 

Services to Everyone: 

Jessica Ranucci will be sitting in for Legal Aid 

From Jessica Ranucci (A)- Legal Aid to Everyone: 

I will be sitting in for legal aid 

From Adam Welle, P -- State AGs to Everyone: 

If it wasn’t said before, Yael will be again the 

primary for state AGs today 

From Beverly (Primary/MSIs) to Everyone: 

The south has cold weather as well today! 

From Bradley Adams - (P - Proprietary 

Institutions) to Everyone: 
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Committee Meetings - 01/21/22

+1 to Beverly's comment on timing issue

From Kelli Perry (P) - Private, Nonprofit Institutions of 

Higher Ed to Everyone:

Emmanual will be coming to the table temporarily to 

ask a question

From Sam (P) Fin Aid Admin to Everyone:

+1 to Debbie's comments

From Bradley Adams - (P - Proprietary 

Institutions) to Everyone:

+1 to Emmanual's comment

From Bradley Adams - (P - Proprietary 

Institutions) to Everyone:

Can the Department provide data on how many 

recertifications are handled timely? Within 90 days after 

expiration of the ppa? It seems like there is a persistent 

problem with untimely decision making and I think the 

committee would be better equipped to talk about this 

provision if we have data on this issue and how many 

institutions have had their PPAs auto renewed under this 12 

month provision under the current regulation ?

From Kelli Perry (P) - Private, Nonprofit Institutions of 

Higher Ed to Everyone:

I will be returning to the table.
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Committee Meetings - 01/21/22

From Bradley Adams - (P - Proprietary 

Institutions) to Everyone:

+1 to Kelli's comment

From Beverly (Primary/MSIs) to Everyone:

+1 to Keli's comments. Language should be clear

From Sam (P) Fin Aid Admin to Everyone:

+1 Dave, those were my comments as well. Simply 

adding "consecutive" does not resolve the issue on the 

wording here because of the timing of the annual audit 

resulting in a loss of opportunity to correct, once 

learning of the issue, prior to the next academic year.

From Johnson Tyler, Brooklyn Legal 

Services to Everyone:

I think DOE judgment goes into the issuing of the 

notification that triggers the provisional status. I think 

if you get rid of the word "automatic" you get the gist of 

this which is that these are factors that can influence 

that decision.

From Beverly (Primary/MSIs) to Everyone:

+1 to David's comments. Perhaps language can be 

included with specificity to the materiality of audit 

findings.

From Kelli Perry (P) - Private, Nonprofit Institutions of 

Higher Ed to Everyone:
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Committee Meetings - 01/21/22

+1 to Johnson on removing the word automatic

From Kelli Perry (P) - Private, Nonprofit Institutions of 

Higher Ed to Everyone:

+1 to David's comments

From Marvin Smith (P) 4 Year Publics to Everyone:

+ 1 to Johnson suggestion. Remove automatic.

From Dave McClintock (Advisor) auditor to Everyone:

would like to discuss Johnson's suggestion to remove 

automatic if Greg is open to it

From Bradley Adams - (P - Proprietary 

Institutions) to Everyone:

I don't understand Johnson's comment on automatic, so 

Dave it would help me.

From Jessica Ranucci (A)- Legal Aid to Everyone:

I understand that Johnson was suggesting moving the 2 

audit bullet from (c)(1)(ii) (automatic triggers) to 

(c)(1)(i), (discretionary triggers)

From Bradley Adams - (P - Proprietary 

Institutions) to Everyone:

Thanks for adding that commentary Jessica.
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Committee Meetings - 01/21/22

From Beverly (Primary/MSIs) to Everyone:

+1 to Dave's comment. So on point.

From Debbie Cochrane (P), State Agencies to Everyone:

You likely want to eliminate the word "facsimile" in 

(I) as well.

From Debbie Cochrane (P), State Agencies to Everyone:

(That's a lower case i which is autocorrecting)

From Beverly (Primary/MSIs) to Everyone:

+1 to Keli. Just use the phrase electronic 

transmission and remove outdated language

From Jamie Studley (P) Accrediting 

agencies to Everyone:

as a broad matter institutional accreditors also deal 

with issues of institutional control in many kinds of 

settings in order to evaluate the institution's 

independence. Where an entity controls institutional 

decisions, governance and direction it is reasonable to 

recognize that responsibility as this change would do.

From Debbie Cochrane (P), State Agencies to Everyone:

+1 to Jamie's comment. State authorizers face similar 

issues.
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Committee Meetings - 01/21/22

From Jamie Studley (P) Accrediting 

agencies to Everyone:

To Debbie: I read it that an auth rep of each and 

every entity that meets the definition in 3(ii) would have 

to sign along with the instit rep in (little i)

From Jessica Ranucci (A)- Legal Aid to Everyone:

Johnson is going to swap in on this.

From Johnson Tyler, Brooklyn Legal 

Services to Everyone:

I'm switching in on the AG sharing info amendment

From Carolyn Fast (P) Consumer Advocates/Civil Rights 

Organizations to Everyone:

+1 to adding CFPB and DOD information sharing

From Jamie Studley (P) Accrediting 

agencies to Everyone:

If federal agencies need to be mentioned by name here 

to allow sharing, then consider adding the FTC as well.

From David Socolow (A) State agencies to Everyone:

+1 to adding CFPB and DOD information sharing to 

668.14 (b)(17) along with all the other agencies that will 

be included in the 90/10 reg
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Committee Meetings - 01/21/22

From Carolyn Fast (P) Consumer Advocates/Civil Rights 

Organizations to Everyone:

+1 to adding FTC as well

From Beverly (Primary/MSIs) to Everyone:

+1 to Barmak's comment to add other federal agencies. 

Sharing of information among relevant agencies can only 

strengthen the effectiveness of the process and outcomes

From Carolyn Fast (P) Consumer Advocates/Civil Rights 

Organizations to Everyone:

+1 to Johnson's suggestion about sharing information 

including Sentinel complaints

From Johnson Tyler, Brooklyn Legal 

Services to Everyone:

I'm switching out and Jessica is back on. thanks.

From Bradley Adams - (P - Proprietary 

Institutions) to Everyone:

+1 to state approval Barmak point

From Bradley Adams - (P - Proprietary 

Institutions) to Everyone:

I agree with Jessica's point, but state's give the 

requirement on hours required to be certified so if they 

want to work in their state they have to meet that 
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Committee Meetings - 01/21/22

threshold and I agree that causes a GE issue for students 

in states that require programs to be longer than other 

states.

From Bradley Adams - (P - Proprietary 

Institutions) to Everyone:

Good question Laura

From Laura Rasar King (A) Accrediting 

Agencies to Everyone:

In terms of program length, there may also be a 

consideration of accreditation requirements for 

credit/clock hours (which are national in scope and 

intended to capture differing requirements nationally). It 

will not cover all GE occupations but it would be a good 

benchmark in some cases.

From Laura Rasar King (A) Accrediting 

Agencies to Everyone:

I like the idea of using MSA's rather than contiguous 

states.

From David Socolow (A) State agencies to Everyone:

+1 to using MSA's, not adjacent states.

From Bradley Adams - (P - Proprietary 

Institutions) to Everyone:

+1 to Johnson's question
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Committee Meetings - 01/21/22

From Beverly (Primary/MSIs) to Everyone:

Thank you, Johnson, for that concise clarification.

From Ernest Ezeugo (P), Students/Student Loan 

Borrowers to Everyone:

+1 Carolyn's comments, both related to what students 

would, at a minimum, expect from their brick and mortar 

institutions and considering rewriting the provision to 

protect distance ed students in the same way.

From Jessica Ranucci (A)- Legal Aid to Everyone:

+1 to Carolyn

From Yael Shavit (A) - State AGs to Everyone:

+1 to Carolyn's concern about the inclusion of 

distance ED

From Laura Rasar King (A) Accrediting 

Agencies to Everyone:

+1 to Carolyn

From Beverly (Primary/MSIs) to Everyone:

+1 to Carolyn's comments re distance education

From Debbie Cochrane (P), State Agencies to Everyone:
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Committee Meetings - 01/21/22

+1 - Institutions should not be enrolling students 

from states in which the program does not properly prepare 

students. That is true for BOTH online education and brickand-mortar education.

From David Socolow (A) State agencies to Everyone:

+1 to Carolyn's point that distance learning programs 

must prepare a student for licensure or certification in 

the state where the student will be employed

From Bradley Adams - (P - Proprietary 

Institutions) to Everyone:

Our request is the word needed should be replaced 

required.

From Jessica Ranucci (A)- Legal Aid to Everyone:

+1 to Laura. De facto requirements for employment are 

very important.

From Bradley Adams - (P - Proprietary 

Institutions) to Everyone:

A CPA is needed, but it is not required to get a job 

in accounting if you have an accounting degree.

From Ernest Ezeugo (P), Students/Student Loan 

Borrowers to Everyone:

+1 Laura's comment about keeping "needed" language as 

opposed to specifically required.
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Committee Meetings - 01/21/22

From Laura Rasar King (A) Accrediting 

Agencies to Everyone:

+1 to Yael - "needed" must remain in the language

From Yael Shavit (A) - State AGs to Everyone:

+1 to Barmak's praxis point

From Jessica Ranucci (A)- Legal Aid to Everyone:

+1 to Barmak

From Laura Rasar King (A) Accrediting 

Agencies to Everyone:

+1 to Barmak's point about practice placements

From Bradley Adams - (P - Proprietary 

Institutions) to Everyone:

I agree with Barmak's point on the law school, but 

that appears that is a programmatic accreditor/state 

issue. will defer to the other experts.

From Yael Shavit (A) - State AGs to Everyone:

+1 to Debbie's point

From Laura Rasar King (A) Accrediting 

Agencies to Everyone:

Osteopathic has a pre-accreditation process.
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Committee Meetings - 01/21/22

From Bradley Adams - (P - Proprietary 

Institutions) to Everyone:

correct

From Bradley Adams - (P - Proprietary 

Institutions) to Everyone:

pre-accreditation vs full accrediated

From Johnson Tyler, Brooklyn Legal 

Services to Everyone:

+1 on Amanda's comments on on-line education up-tick 

due to covid and need to ensure students are able to enter 

marketplace after earning degree

From Bradley Adams - (P - Proprietary 

Institutions) to Everyone:

i recommend breaking e down in sections. there is a 

lot in this section.

From Bradley Adams - (P - Proprietary 

Institutions) to Everyone:

maybe 1-3 first?

From Yael Shavit (A) - State AGs to Everyone:

emphatic +1 to Jessica

From Jessica Ranucci (A)- Legal Aid to Everyone:
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Committee Meetings - 01/21/22

+1 Carolyn

From Yael Shavit (A) - State AGs to Everyone:

+1 Carolyn