To: 2024 Negotiated Rulemaking Program Integrity and Institutional Quality Committee

From: Dom Chase, Business Officers from IHEs (Alternate)

Jason Lorgan, Public Four-Year IHEs (Primary)

Alyssa Dobson, Public Four-Year IHEs (Alternate)

Erika Linden, Private Nonprofit IHEs (Primary)

Scott Dolan, Private Nonprofit IHEs (Alternate)

Jo Blondin, Public Two-Year IHEs (Primary)

Jillian Klein, Proprietary IHEs (Primary)

David Cohen, Proprietary IHEs (Alternate)

Laura Rasar King, Programmatic Accrediting Agencies (Primary)

Date: February 8, 2024 

RE: Issue Paper 1: Cash Management 

 

The Department’s issue paper provided to the committee in advance of Session 1 noted concerns with 

current 34 CFR § 668.164(c) and (m), which since July 1, 2016 have permitted an institution – under 

specified conditions – to credit a student’s title IV, HEA program funds to institutional charges for books 

and supplies. The concerns specifically referenced by the Department as rationale for proposed 

regulatory changes were the lack of sufficient disclosures and transparency, which in turn can limit a 

student’s ability to assess whether the institution’s method of providing books and supplies is the most 

affordable option.

The Department’s proposed language to date, however, addresses its stated concerns by effectively 

eliminating the ability of institutions to offer inclusive access programs for books and supplies. 

Negotiators representing institutions of higher education across a variety of constituencies have been 

negotiating in good faith and are providing alternative language to address the Department’s stated 

concerns, while also seeking to maintain the benefits of inclusive access models and the robust evidence 

that institutional negotiators have submitted to support student success by providing timely and 

accessible course content to all students at affordable prices. 

The proposal set forth below therefore maintains the option for institutions to use inclusive access 

programs for books and supplies. The proposed language assures that the elements of an inclusive 

access program are clearly and conspicuously disclosed to students on a regular cadence, upon 

enrollment and throughout their matriculation at the institution, both on the student’s account and via 

the institution’s website and catalog. It ensures affordability by requiring institutions to certify to the 

Department that the institutional charge for books and supplies is below market cost. It enhances the 

opt out provisions of current regulation to require more explicit instructions to students about how to 

opt out. The language below also clarifies that institutions must, for students who opt out, directly 
provide to such students the title IV, HEA funds that would otherwise have been applied to the 

institutional charge for books and supplies.

***

§ 668.164 (c)(1) and (2) - Crediting a student's ledger account

(c) Crediting a student's ledger account.

(1) An institution may credit a student's ledger account with title IV, HEA program funds to pay 

for allowable charges associated with the current payment period. Allowable charges are

(i) The amount of tuition, fees, and institutionally provided food and housing assessed 

the student for the payment period or, as provided in paragraph (c)(5) of this section, 

the prorated amount of those charges if the institution debits the student’s ledger 

account for more than the charges associated with the payment period;

(A) An institution may only include costs of books and supplies as a part of 

tuition and fees if—

(1) The institution demonstrates there is a compelling health or safety 

reason to do so;

(2) The institution documents on a current basis that the books or 

supplies, including digital or electronic materials, are not available or 

accessible to students enrolled in the program, in the same or a 

substantially similar form, from sources other than those provided or 

authorized by the institution; or

(3) The institution—

(i) Has an arrangement with a supplier of books and supplies

that enables it to make those books and supplies available to 

students at or below competitive market rates;

(ii) Certifies to the Department on an annual basis that the 

institution is offering books and supplies to students at or below 

the competitive market rates;

(iii) Provides a way for a student to obtain those books and 

supplies by the first day of a payment period, but no later than 

the seventh day of the payment period;

(iv) Specifies the included costs of books and supplies as a 

separate institutional charge on a student’s account and related 

billing correspondence for each applicable payment period;

(v) Has a policy and procedure, which must be clearly and 

conspicuously disclosed on the institution’s website and catalog,

under which a student may opt out of the institutional charge 

for books and supplies, including:
(a) direct, written notice to the student at the time of 

enrollment, and again at least two weeks before the 

start of each academic term, that the student may opt 

out of the institutional charge, including clear and 

conspicuous instructions for opting out and an 

explanation that the student bears the obligation to

options to find alternate sources for the books and

supplies upon opting out of the institutional charge; 

(b) a prominent web-based opt-out capability that is 

available to the student through the first day of the 

course or the last date of the add/drop period, 

whichever is later; and

(c) within 14 days of the student opting out of the 

institutional charge, provision to the student of the title 

IV, HEA program funds that would otherwise have been 

applied to the institutional charge.

***