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##  The U.S. Department of Education and Student Financial Aid for                  Distance Education: An Update. ERIC Digest.                                  

Since the mid-1990s, there has been a boom in the number of U.S.                colleges and universities providing courses and degree programs via             distance education--education or training courses delivered to                  off-campus locations via audio, live or prerecorded video, or                   computer technologies, including both synchronous and asynchronous              instruction (Lewis, Snow, Farris, and Levin, 1999, pp. vi, 2).                  Between 1995 and 1998, enrollments in distance education classes                more than doubled, reaching 1,632, 350, and this rapid growth is                expected to continue (U.S. Dept. of Education, 2001,  June                      25). 
This virtual explosion in distance education has piqued the              interest of parents, students, distance education providers, and                federal officials in the rules governing the U.S. Department of                 Education's distribution of federal student financial aid for                   distance learning. Under the current federal student aid                        programs (Title IV of the Higher Education Act of 1965, as amended),            the bulk of student aid is awarded to a college or university's                 resident students; there are a number of statutory and regulatory               provisions that limit the eligibility of distance education students            to receive financial assistance  (U.S. Dept. of Education, 1999,                June 25). 
The Education Department is now reexamining these                   provisions, considering how student financial aid  regulations are              affecting distance education programs, and formulating                          recommendations for change.  This paper offers a brief discussion               about the growth of distance education in the postsecondary arena               and summarizes the Education Department's progress in evaluating                current rules governing financial aid for distance                              learning. DISTANCE EDUCATION AT POSTSECONDARY                                 INSTITUTIONSDistance Education at Postsecondary Institutions:               1997-98, a 1999 Education Department report, found that 1,190                   distance learning programs were offered by higher education                     institutions in 1998, a 72 percent increase from 1995.  In 1998,                1,680 institutions offered a total of about 54,000 online-education             courses, with 1.6 million students enrolled. Forty-four percent of              higher education institutions offered distance education courses in             1998, an 11% increase from 1995 (Carnevale, 2000, January                       7). 
Other report findings include: 
1) The Internet was the                  medium of choice for most  institutions providing distance                      education.  From 1995 to 1998, the  proportion of institutions that             used two-way interactive video dropped from 57 percent to 56                    percent; the proportion that used recorded video courses dropped                from 52 percent to 48 percent.  The proportion of those offering                asynchronous courses on the Internet increased from 22 percent to 60            percent, while the proportion providing synchronous courses on the              Internet increased from 14 percent to 19 percent (Carnevale, 2000,              January 7). 
2) Seventy-seven percent of institutions charged the              same tuition for similar online and traditional courses, and 66                 percent did not charge additional fees for distance education                   courses (Carnevale, 2000, January 7). 
3) Of the schools offering              distance education programs, 70 percent offered courses in English,             social and behavioral sciences, and the humanities; 55 percent                  offered courses in business and management; 36 percent offered                  courses in health care; 32 percent in mathematics; 29 percent in                education; 26 percent in computer science; 17 percent in vocational             and technical fields; 12 percent in engineering; 7 percent in                   agriculture and natural resources; and 6 percent in library and                 information sciences.  Sixteen percent of the colleges offered other            distance education courses (Carnevale, 2000, January 7). BATTLING             FRAUD AND ABUSE IN THE STUDENT AID PROGRAMSThe rapid expansion              of distance education introduces potential risks for fraud and abuse            of the Department of Education's student financial assistance                   programs.  Similar risks were present in the 1980s as the numbers of            institutions offering postsecondary vocational education increased              substantially.  A number of student aid program abuses were exposed,            including questionable recruiting practices, sudden school closures,            participation of low quality schools, and courses expanded in order             to obtain more student aid (U.S. Dept. of Education, OPE, PPI, 2001,            p.29). To combat such abuses, the Department's oversight authority              was expanded by provisions enacted in the late 1980s and early                  1990s.  The Higher Education Amendments of 1992 were particularly               effective in addressing the fraud and abuse in the Title IV student             financial aid programs that occurred primarily in schools that                  delivered instruction by print-based correspondence.  The Amendments            effectively  barred schools offering over half of their courses via             correspondence or a combination of correspondence and                           telecommunications from participating in Title IV, student financial            aid programs.  One rule limited to less than 50 percent the numbers             of students an eligible institution is allowed to enroll in                     correspondence courses.  Another stipulated that correspondence                 students are allowed to receive Title IV financial assistance only              if  enrolled in associate's, bachelor's, or graduate degree                     programs.  Congress also imposed a 30-week academic year requirement            on eligible institutions in response to abuses such as course                   stretching and other issues of program length (U.S. Dept. of                    Education, OPE, PPI, 2001, pp.16, 29). 
Though fraud and abuse of              the Title IV financial aid programs were greatly remedied by the                increased number of provisions set forth in the 1992 HEA amendments,            these rules are now hampering distance education students in                    receiving financial aid (Van der werf, 2000). Until recently, the               1992 Amendments had little effect on the majority of institutions               participating in Title IV, student financial assistance programs.               Providing distance education via correspondence or                              telecommunications was a small part of their activity.  The                     postsecondary education landscape has changed dramatically over the             last few years, however, as the Internet and other technologies have            extended institutions' reach and the demand for online education has            grown rapidly.  (U.S. Dept. of Education, OPE, PPI, 2001, p.                    16). DISTANCE EDUCATION DEMONSTRATION PROGRAMBy the late                  1990s, Congress recognized the importance of the growing trend in               distance education as an option to on-campus study and its potential            for increasing access to postsecondary education for some groups of             students--students living in rural areas, working parents, and                  students with disabilities that limit their access to the                       traditional campus setting (U.S. Dept. of Education, 1999, June 25).            At the same time, Congress wished to proceed cautiously in amending             the rules regulating student financial aid for distance                         education (U.S. Dept. of Education, OPE, PPI, 2001, p.                          29). 
Congress acted by authorizing the Distance Education                     Demonstration Program in the 1998 Higher Education Amendments.  The             Demonstration Program is designed to provide increased student                  access to higher education through distance education and to test               the quality and viability of expanded distance education programs               currently restricted under the Higher Education Act. It is also                 designed to help determine the most effective means of delivering               quality education via distance education, the statutory and                     regulatory requirements that should be altered to provide greater               access to distance education, and the appropriate level of Title IV,            student financial assistance for students enrolled in distance                  education programs (U.S. Dept. of Education, OPE, PPI, 2001, p.                 1). 
In short, the Demonstration Program will test some of the                 issues related to student aid for distance learning  before Congress            considers policy changes that might again result in increases in                fraud and abuse (U.S. Dept. of Education, OPE, PPI, 2001, p.                    34). PROGRAM WAIVERSThe Distance Education Demonstration                  Program allows selected postsecondary schools, systems, and                     consortia waivers of two rules that currently limit the eligibility             of financial aid for distance education: 
1) the rule that makes               schools ineligible for student aid if they enroll 50 percent or more            of their students in distance education programs or offer 50 percent            or more of their courses via distance education. 
2) the rule that             requires that a school's academic year consist of a minimum of 30               weeks for students to receive the maximum federal financial                     aid. 
Waivers are also granted from some Title IV financial aid                regulations to facilitate arrangements such as: 
1) sharing of                 distance education courses among consortia members; 
2) enrollment             tracking to verify status of students taking courses at several                 institutions simultaneously; 
3) collaborations between two- and               four-year institutions that will allow a student who has earned an              associate degree from a community college to complete a                         baccalaureate degree via distance education; 
4) calculating a                 student's cost of attendance by limiting costs to tuition, fees,                books and supplies, and excluding living expenses, to help determine            the appropriate amount of federal aid for distance education                    students (U.S. Dept. of Education, 1999, June 25). PROGRAM                    ADMINISTRATIONThe Distance Education Demonstration Program began            to be implemented on July 1, 1999 with the selection of 15                      postsecondary schools, systems and consortia to participate in the              first year of the program.  Additional participants were selected to            join the program in its third year, beginning July 1, 2001 (U.S.                Dept. of Education, OPE, 2001, October 26). The projects are                    expected to continue through the 2003-2004 academic year at which               time Congress is expected to consider amendments to the Higher                  Education Act (U.S. Dept. of Education, 2001, June 25).  There are              currently 24 participants, including over 100 institutions from 20              states and the District of Columbia (U.S. Dept. of  Education, OPE,             2001, October 26) 
* American InterContinental University                      http://www.aiu-online.com 
* Brevard Community  College                        http://www.brevard.cc.fl.us 
* Capella University                              http://www.capellauniversity.edu 
* Community Colleges of                      Colorado (system schools) http://www.cccoes.edu 
* Connecticut                 Distance Learning Consortium (consortium members)                               http://www.ctdlc.org 
* Eastern Oregon University                              http://www.eou.edu 
* Florida State University                                 http://www.fsu.edu 
* Franklin University (consortium members)                 http://www.franklin.edu 
* JesuitNET Consortium                                http://www.ajcunet.edu 
* LDS Church Education System (system                  schools)  http://www.byu.edu 
* Marlboro College                               http://www.gradcenter.marlboro.edu 
* New York University                      http://www.scps.nyu.edu 
* North Dakota University System (system              schools)  http://www.ndus.nodak.edu 
* Quest Education Corp -                  Kaplan College   http://www.kaplancollege.com 
* Regis University              http://www.regis.edu/distance.asp 
*Southern Christian University              http://www.southernchristian.edu 
* Texas Tech University                      http://www.dce.ttu.edu 
* United States Sports Academy                         http://www.ussa.edu 
* University of Maryland University                       http://www.umuc.edu 
* University of Phoenix                                   http://www.phoenix.edu 
* Walden University                                    http://www.waldenu.edu 
* Washington Community and Technical                   College System Online Consortium (consortium members)                           http://www.sbctc.ctc.edu/dl/default.htm 
* Washington State                    University http://www.wsu.edu 
* Western Governors University                  http://www.wgu.edu 
(U.S. Dept. of Education, OPE, Distance                    Education Demonstration Program. Participating                                  Institutions). 
Staff from the Education Department's Office of                Postsecondary Education and Office of Student Financial Assistance              administer the Demonstration Program. The Office of Postsecondary               Education, as the office responsible for the development of Title IV            Student Financial Assistance policy, provides the Program                       leadership (U.S. Dept. of Education, OPE, 2001, October                         26). PROGRAM RESULTSCongress required that Program findings be            reported after 18 months with subsequent reports submitted                      annually  (Carnevale, 2001, Feb. 9). The Report to Congress on the              Distance Education Demonstration Program,  issued January 2001,                 responds to some of the concerns that institutions have about the               federal financial aid rules and statutes, but does not make specific            recommendations about what actions Congress should take (Carnevale,             2001, Feb. 9). 
According to the report, inflexibility in financial            aid regulations hurts the advancement of distance education.                    Current rules that restrict which colleges and universities can                 provide federal financial aid to distance education students are                complex and inhibiting and should be updated to reflect the growth              of alternative education (Carnevale, 2001, Feb. 9). One of these                rules--the "50 percent rule"-- disallows schools offering more than             half of their courses via distance learning from providing federal              student aid.  A second rule targeted as inhibiting is the +12-hour              rule" -- a rule created to exclude diploma mills --  that requires              that students enroll in at least 12 hours of course work a week to              qualify for full-time status and the maximum amount of student                  aid (Carnevale,  2001, Jan. 19, Feb. 9). Proponents of distance                 education assert that distance education and other alternative                  teaching methods do not rely on classroom hours to gauge students'              learning and call the 12-hour rule an antiquated measure; distance              education allows students to be in class for as long as they need               to, they argue,  rather than for a prescribed period (Carnevale,                2000, Sept. 15).  The report also suggests the possibility of                   experimenting with a student-based delivery system --disbursing                 financial aid to students directly, instead of the current practice             of giving it to postsecondary institutions to distribute (U.S. Dept.            of Education, OPE, PPI, 2001, p.vi). THE FUTUREThough the                 Distance Education Demonstration Program was begun during the last              Administration, the matters involved are bipartisan.  The new                   Administration has stated it will work with Congress throughout the             coming months to explore the myriad issues that must be carefully               considered before crafting new student financial aid                            regulations (Carnevale, 2001, Jan. 19). Interested parties may stay             abreast of developments by visiting the Distance Education                      Demonstration Program web site at                                               http://www.ed.gov/offices/OPE/PPI/DistEd/ BIBLIOGRAPHYAmerican            Council on Education. (March 2000).  Developing a distance education            policy for 21st century learning.  Retrieved June 8, 2001, from the             American Council on Education, Division of Government and Public                Affairs Web site:                                                               http://www.acenet.edu/washington/distance_ed/2000/03march/distance_e            d.html 
Carnevale, D. (2000, January 7).  Survey finds 72% rise in             number of distance education programs [Electronic version].  The                Chronicle of Higher Education, p. A57. 
Carnevale, D. (2000,                   September 15). U.S. mulls aid changes for distance                              courses [Electronic version]. The Chronicle of Higher Education, p.             A28. 
Carnevale, D. (2000, November 3). Colleges receive tips on               joining federal effort on aid for online-education                              students [Electronic version]. The Chronicle of Higher Education, p.            A43. 
Carnevale, D. (2001, January 19). Education Dept. told that              aid rules impede distance education [Electronic version].  The                  Chronicle of Higher Education, p. A33 
Carnevale, D. (2001,                    February 9).  Report to Congress says financial-aid rules are                   hurting distance programs [Electronic version].  The Chronicle of               Higher Education, p. A34. 
Lewis, L., Snow, K., Farris, E., Levin,             D. (1999).  Distance education at postsecondary education                       institutions: 1997-98. (National Center for Education Statistics                Report No. 2000-013). Washington, DC: U.S. Department of Education.             Retrieved June 8, 2001 from the Department of Education web site:               http://nces.ed.gov/pubs2000/2000013.pdf 
U.S. Department of                    Education. (1999, June 25).  New ED projects promote distance                   learning for college.  Press Release. Retrieved June 8, 2001 from               the Department of Education web site:                                           http://www.ed.gov/PressReleases/06-1999/distep.html 
U.S.                      Department of Education (2001, June 25).  Ten new distance ED                   projects expand higher ED access.  Press Release. Retrieved October             26, 2001 from the Department of Education web site:                             http://www.ed.gov/PressReleases/06-2001/06252001.html 
U.S.                    Department of Education, Office of Postsecondary Education. (2001,              July).  Student Financial Assistance and Nontraditional Educational             Programs (Including the "12-Hour Rule").  A Report to Congress.                 Retrieved October 15, 2001 from the Department of Education web                 site:                                                                           http://www.ed.gov/offices/OPE/News/12HourRuleReport.html 
U.S.                 Dept. of Education, Office of Postsecondary Education. Distance                 Education Demonstration Program. Retrieved October 26, 2001 from the            Department of Education web site:                                               http://www.ed.gov/offices/OPE/PPI/DistEd/ 
U.S. Dept. of Education,            Office of Postsecondary Education.  Distance Education Demonstration            Program.  Participating Institutions.  Retrieved October 26, 2001               from the Department of Education web site:                                      http://www.ed.gov/offices/OPE/PPI/DistEd/participants.html 
U.S.               Department of Education, Office of Postsecondary Education, Policy,             Planning and Innovation. (2001). Report to Congress on the Distance             Education Demonstration Programs. Retrieved June 8, 2001 from the               Department of Education web site:                                               http://www.ed.gov/offices/OPE/PPI/distEd.html 
Van der werf,                   M. (2000, July 9).  Colleges picked for project on aid to distance              learning students [Electronic version]. The Chronicle of Higher                 Education, p. A34. 
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The mission of the ERIC system is to               improve American education by increasing and facilitating the use of            educational research and information to effect good practice in the             activities of learning, teaching, educational decision making, and              research, wherever and whenever these activities take place.  This              publication was partially prepared with funding from the Office of              Educational Research and Improvement, U.S. Department of Education,             under contract no. RR-93-00-0036. The opinions expressed here do not            necessarily reflect the positions or policies of OERI or the                    department.  Permission is granted to copy and distribute this                  ERIC-HE Digest.                                                              **Title:** The U.S. Department of Education and Student Financial Aid for                  Distance Education: An Update. ERIC Digest.                                  **Note:** Contains small print.                                                        **Document Type:** Information Analyses---ERIC Information Analysis Products (IAPs) (071); Information Analyses---ERIC Digests (Selected) in Full Text (073); **Available From:** ERIC Clearinghouse on Higher Education, One Dupont Circle, Suite                630, Washington, DC 20036-1183. Tel: 800-956-7739 (Toll Free). For              full text: http://www.eriche.org.                                            **Descriptors:**  Distance Education, Educational Finance,  Federal Government,                  Fraud, Higher Education, Institutional Characteristics,  Student                Financial Aid                                                                **Identifiers:** ERIC Digests                                                                 
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