470 Federal Register / Vol. 90, No. 2 / Friday, January 3, 2025 / Rules and Regulations 

DEPARTMENT OF EDUCATION 

34 CFR Parts 600, 643, 644, 645, 647, 

and 668 

[Docket ED–2024–OPE–0050] 

RIN 1840–AD85 and 1840–AD92 

Program Integrity and Institutional 

Quality: Distance Education and 

Return of Title IV, HEA Funds 

AGENCY: Office of Postsecondary 

Education, Department of Education. 

ACTION: Final regulations. 

SUMMARY: The Secretary amends the 

Student Assistance General Provisions 

regulations governing participation in 

the student financial assistance 

programs authorized under title IV of 

the Higher Education Act of 1965, as 

amended (HEA), to promote program 

integrity and institutional quality. These 

regulations clarify, update, and 

consolidate certain provisions that 

apply to distance education and the 

return of title IV, HEA funds. They also 

make technical changes to the TRIO 

program regulations to reflect the 

current status of the Republic of Palau 

as a member of the Freely Associated 

States. This document provides notice 

that the Department fully closes out the 

Program Integrity and Institutional 

Quality: Distance Education and Return 

of Title IV, HEA Funds notice of 

proposed rulemaking. That is, we will 

not be finalizing the remainder of the 

Federal TRIO program provisions but 

may promulgate through future 

rulemaking efforts. 

DATES: The regulations are effective July 

1, 2026. For the implementation dates of 

the regulatory provisions, see the 

Implementation Date of These 

Regulations in SUPPLEMENTARY

INFORMATION. 

FOR FURTHER INFORMATION CONTACT: For 

distance education: Brian Schelling. 

Telephone: (202) 987–0443. Email: 

Brian.Schelling@ed.gov. For return of 

title IV funds: Aaron Washington. 

Telephone: (202) 987–0911. Email: 

Aaron.Washington@ed.gov. 

If you are deaf, hard of hearing, or 

have a speech disability and wish to 

access telecommunications relay 

services, please dial 7–1–1. 

A brief summary of these final 

regulations are available at 

www.regulations.gov/docket/ED-2024- 

OPE-0050. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Abbreviations 

II. Executive Summary 

1. Purpose of Regulatory Action 

2. Authority for the Regulatory Action 

III. Summary of Major Provisions 

IV. Summary of Costs and Benefits 

V. Implementation Date of These Regulations 

VI. The NPRM and Public Comment 

VII. Analysis of Public Comment and 

Changes 

1. Process for Out of Scope Comments 

2. Public Comment Period 

3. Distance Education 

4. Return of Title IV Funds 

5. Federal TRIO Programs 

VIII. Regulatory Impact Analysis 

1. Congressional Review Act 

2. Need for Regulatory Action 

3. Summary of Comments and Changes 

From the NPRM 

4. Discussion of Costs, Benefits, and 

Transfers 

5. Accounting Statement 

6. Alternatives Considered 

7. Regulatory Flexibility Act 

IX. Paperwork Reduction Act of 1995 

I. Abbreviations 

CFR: Code of Federal Regulations 

CIP Code: Classification of Instructional 

Programs Code 

DEOA: Department of Education 

Organization Act 

EOC: Educational Opportunity Centers 

FFEL: Federal Family Education Loan 

program 

FSA: Federal Student Aid 

Freely Associated States: the Republic of 

Palau, the Federated States of Micronesia, 

and the Republic of the Marshall Islands 

HEA: Higher Education Act of 1965, as 

amended 

McNair: Ronald E. McNair Postbaccalaureate 

Achievement Program 

PEP: Eligible prison education program 

PRWORA: Personal Responsibility and Work 

Opportunity Reconciliation Act 

R2T4: Return of title IV funds 

RIA: Regulatory Impact Analysis 

SSS: Student Support Services Program 

Title IV, HEA Programs: Student financial 

assistance programs authorized under title 

IV of the HEA 

TRIO: Federal outreach and student services 

programs designed to identify and provide 

services for individuals from 

disadvantaged backgrounds 

TS: Talent Search 

UB: Upward Bound 

II. Executive Summary 

1. Purpose of This Regulatory Action 

These final regulations address two 

substantive areas: distance education 

and return of title IV funds (R2T4). 

Additionally, this document makes 

technical changes to the TRIO program 

regulations to reflect the current status 

of the Republic of Palau as a member of 

the Freely Associated States and 

removes references to the Trust 

Territory of the Pacific Islands. As noted 

above, we will not be finalizing the 

remainder Federal TRIO provisions but 

may consider them in a future 

rulemaking efforts. 

The Department is addressing these 

areas to help ensure students are well 

served by the eligible institutions they 

attend and ensure that Federal Student 

Aid (FSA) programs work in the best 

interests of students. As the two distinct 

topics are structured and addressed 

independently in this final rule, the 

Department generally intends the rule’s 

provisions to be severable from each 

other. If any provision of a particular 

subpart or its application to any person, 

act, or practice is held invalid, the 

remainder of the subpart or the 

application of its provisions to any other 

person, act, or practice will not be 

affected thereby. 

The distance education final 

regulations help the Department 

improve its oversight of distance 

education and correspondence 

programs. To accomplish this, the 

distance education regulations improve 

the information available about students 

in such programs who receive title IV, 

HEA funds by adding a definition of 

distance education course, and 

requiring institutions to report their 

students’ distance education status. 

The R2T4 final regulations increase 

the accuracy and simplicity of 

performing R2T4 calculations; address 

unique circumstances for what 

constitutes a withdrawal; and codify 

longstanding policies into regulation. 

The July 24, 2024, Notice of Proposed 

Rulemaking (NPRM), 89 FR 60256, for 

the Federal TRIO programs proposed to 

expand student eligibility under certain 

TRIO programs for students who have 

enrolled in or who seek to enroll in a 

high school in the United States, 

territories, or Freely Associated States. 

After reviewing comments received on 

the proposed rulemaking for TRIO, the 

Department has decided not to finalize 

the Federal TRIO provisions other than 

the technical change mentioned above, 

to reconsider how best to ensure that the 

TRIO programs are able to reach all 

populations of disadvantaged students. 

The Department may consider the 

remaining Federal TRIO provisions in a 

future rulemaking effort. 

2. Authority for This Regulatory Action 

The legal basis for these final 

regulations is title IV of the Higher 

Education Act of 1965, as amended 

(HEA), which authorizes the Federal 

government’s major student financial 

aid programs that are the primary source 

of direct Federal support to students 

pursuing postsecondary education. 20 

U.S.C. 1070–1099d (sections 400–499 of 

the HEA). Institutions participating in 

the title IV, HEA programs must satisfy 

certain threshold and ongoing 

requirements, see id., and the Secretary 


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1 2005–06 FSA Handbook—(page 5–32)— 

chrome—https://fsapartners.ed.gov/sites/default/ 

files/2021-03/2005-2006%20Volume%205%20

Master%20File.pdf. 

2 20 U.S.C. 1089(c)(1). 

3 20 U.S.C. 1089(c)(2). 

is given broad authority to carry out 

program requirements. 20 U.S.C. 

1070(b) (section 400(b) of the HEA). As 

part of its oversight responsibilities 

under title IV, the Department seeks to 

promote program integrity and 

institutional quality. See generally 20 

U.S.C. 1099c, 1099c–1, 1099c–2 

(sections 498, 498A, and 498B of the 

HEA). To this end, the Department’s 

Student Assistance General Provisions 

regulations establish threshold 

requirements for institutions to 

participate and to continue participation 

in student financial assistance 

programs. See generally 34 CFR parts 

600–603, 642–647, 668, 673–676, 682– 

694. These final regulations update, 

consolidate, and revise requirements in 

two distinct title IV areas: distance 

education and the return of title IV, 

HEA funds, impacting 34 CFR parts 600 

and 668. The Department’s specific legal 

authority in these areas is set forth 

below. 

Distance Education. Section 103(7) of 

the HEA defines ‘‘distance education,’’ 

and section 484(l) sets forth rules 

relating to courses offered through 

distance education. 

Return of Title IV, HEA Funds. 

Section 484B of the HEA outlines the 

process that an institution must follow 

if a title IV, HEA aid recipient 

withdraws from the institution during a 

payment period or period of enrollment 

(also known as R2T4). The Department’s 

various changes to the R2T4 regulations 

benefit both institutions and students. 

III. Summary of the Major Provisions of 

This Regulatory Action 

These final regulations make the 

following changes. 

Distance Education (§§ 600.2, 668.3, 

668.41) 

• Amend § 600.2 to add a definition 

for distance education course. 

• Add § 668.41(h) to require 

institutions to report student enrollment 

in distance education or correspondence 

courses using a procedure that would be 

determined by the Department. 

Return of Title IV Funds (§§ 668.21, 

668.22) 

• Amend § 668.22(a)(2)(ii)(A)(6) to 

exempt institutions from performing an 

R2T4 calculation if: (1) a student is 

treated as never having begun 

attendance; (2) the institution returns all 

title IV, HEA assistance disbursed to the 

student for that payment period or 

period of enrollment; (3) the institution 

refunds all institutional charges to the 

student for that payment period or 

period of enrollment; and (4) the 

institution writes off or cancels any 

payment period or period of enrollment 

balance owed by the student to the 

institution due to the institution’s 

returning of title IV, HEA funds to the 

Department. 

• Amend § 668.22(b)(2) to codify 

longstanding guidance (since the 2005– 

06 award year 1) that an institution that 

is required to take attendance must 

document the date of the institution’s 

determination that the student 

withdrew no later than 14 days after the 

student’s last date of attendance as 

determined by the institution from its 

attendance records. 

• Amend § 668.22(d)(1)(vii) to allow a 

confined or incarcerated individual, in 

a term-based setting, to return at a 

different point in their eligible prison 

education program (PEP) than the point 

at which the student left off. 

• Amend § 668.22(f)(1)(ii)(A) to 

streamline and make consistent 

institutions’ calculation of the 

percentage of the payment period 

completed for a clock-hour program. 

• Amend § 668.22(l)(9) to consider a 

module part of the payment period used 

in the denominator of the R2T4 

calculation only when a student begins 

attendance in the module. 

IV. Summary of Costs and Benefits 

As further detailed in the Regulatory 

Impact Analysis, the Department 

estimates net present value costs of 

$27,349,749 over ten years at a 2 percent 

discount rate. This is equivalent to an 

annualized cost of $3,044,753 over ten 

years. Additionally, we estimate 

annualized quantified costs of 

$9,423,657 related to paperwork burden. 

As also further detailed in the RIA, 

these final regulations will have 

benefits, including, ensuring students 

are well served by the institutions of 

higher education they attend and that 

Federal Student Aid programs work in 

the best interests of students. New 

regulations for distance education will 

help the Department better measure and 

account for student outcomes, improve 

oversight over distance education, and 

ensure students are receiving effective 

education by requiring students’ 

distance education enrollment status. 

The R2T4 final regulations will increase 

the accuracy and simplicity of 

performing R2TV calculations, add 

additional clarity to institutions on 

reporting, and codify longstanding 

policies. 

V. Implementation Date of These 

Regulations 

These regulations are effective on July 

1, 2026. Section 482(c)(1) 2 of the HEA 

requires that regulations affecting 

programs under title IV of the HEA be 

published in final form by November 1 

prior to the start of the award year (July 

1) to which they apply. HEA section 

482(c)(2) 3 also permits the Secretary to 

designate any regulation as one that an 

entity subject to the regulations may 

choose to implement earlier and outline 

the conditions for early implementation. 

The Secretary is exercising his 

authority under HEA section 482(c) to 

designate certain regulatory changes to 

part 668 in this document for early 

implementation beginning February 3, 

2025. The Secretary has designated the 

following provisions for early 

implementation: allow an incarcerated 

student enrolled in a term-based 

program who takes a leave of absence to 

return without resuming coursework at 

the same point, and exempting 

institutions from performing an R2T4 

calculation under the withdrawal 

exemption in § 668.22(a)(2)(ii)(A)(6). 

VI. The NPRM and Public Comments 

On July 24, 2024, the Secretary 

published a NPRM for these regulations 

in the Federal Register. These final 

regulations contain changes from the 

NPRM, which we explain in the 

Analysis of Comments and Changes 

section of this document. The NPRM 

included proposed regulations on three 

topics: distance education, R2T4, and 

the Federal TRIO programs. 

We developed these regulations 

through negotiated rulemaking. Section 

492 of the HEA requires that, before 

publishing any proposed regulations to 

implement programs under title IV of 

the HEA, the Secretary must obtain 

public involvement in the development 

of the proposed regulations. After 

obtaining advice and recommendations, 

the Secretary must conduct a negotiated 

rulemaking process to develop the 

proposed regulations. The Department 

negotiated in good faith with all parties 

with the goal of reaching consensus. 

The Committee reached consensus on 

TRIO but did not reach consensus on 

the provisions under Distance 

Education and R2T4. However, after 

reviewing the comments received on the 

NPRM, the Department has determined 

not to finalize the Federal TRIO 

provisions other than the technical 

change mentioned above, to reconsider 

how best to ensure that the TRIO 

programs are able to reach all 


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populations of disadvantaged students. 

The Department may consider the 

remainder of the Federal TRIO 

provisions in future rulemaking efforts. 

In response to our invitation in the 

NPRM, 454 parties submitted 

comments. We discuss substantive 

issues under the sections of the 

regulations to which they pertain. 

VII. Analysis of Public Comment and 

Changes 

In this section, we have grouped 

issues according to subject, with 

appropriate sections of the regulations 

referenced. We discuss other 

substantive issues under the sections of 

the regulations to which they pertain. In 

instances where individual submissions 

appeared to be duplicates or near 

duplicates of comments prepared as part 

of a write-in campaign, the Department 

posted one representative sample 

comment along with the total comment 

count for that campaign to 

Regulations.gov. We considered these 

comments along with all other 

comments received. In instances where 

individual submissions were bundled 

together (submitted as a single 

document or packaged together), the 

Department posted all the substantive 

comments included in the submissions 

along with the total comment count for 

that document or package to 

Regulations.gov. Generally, we do not 

address minor, non-substantive changes 

(such as renumbering paragraphs, 

adding a word, or typographical errors). 

Additionally, we generally do not 

address changes recommended by 

commenters that the statute does not 

authorize the Secretary to make or 

comments pertaining to operational 

processes. 

1. Process for Out-of-Scope Comments 

We do not address comments that are 

out of scope. For purposes of this NFR, 

out-of-scope comments are those that 

are beyond the scope of the NPRM 

altogether. Generally, comments that are 

outside of the scope of the NPRM are 

comments that do not discuss the 

content or impact of the proposed 

regulations or the Department’s 

evidence or reasons for the proposed 

regulations. Analysis of the comments 

and of any changes in the regulations 

since publication of the NPRM follows. 

2. Public Comment Period 

Comments: Several commenters 

argued that the 30-day comment period 

denied the public their right to provide 

adequate comment. These commenters 

recommend extending the comment 

period for an additional 30 days for 

what they said would be a more 

comprehensive and thoughtful review of 

the proposed rulemaking. A few 

commenters mentioned that institutions 

have several tasks to balance, including 

challenges related to the FAFSA 

simplification rollout, the beginning of 

the semester, new regulations, and 

increased reporting requirements. One 

commenter noted that while they 

understand that a final rule must be 

published by November 1 for the rule to 

take effect the following academic year, 

they are frustrated that 30 days has 

become a routine timeframe at the 

Department because it is generally 

insufficient time to prepare a response 

reflective of the regulation’s impact. 

One commenter stated that there was no 

reason for the Department to give this 

rule a shorter comment period 

compared to other NPRMs and that 

doing so goes against the Administrative 

Procedure Act. One commenter asserts 

that Executive Orders (E.O.) 12866 and 

13563 support their claims of a 30-day 

comment period being too short. The 

commenter states that E.O. 13563 

instructs every agency to provide the 

public with a meaningful opportunity to 

comment on a proposed regulation and 

the comment period should generally be 

at least 60 days. The commenter points 

out that E.O. 12866 includes similar 

language. 

Discussion: The public comment 

period is consistent with the 

Department’s obligations under the 

Administrative Procedure Act and the 

Executive Orders cited by the 

commenters, and, given the extensive 

opportunity for comment provided over 

the course of the negotiated rulemaking 

process, the Department declines the 

suggestion to extend the public 

comment period for another 30 days. 

Contrary to the commenter’s assertion, 

the comment period for this NPRM is 

not shorter compared to other recent 

NPRMs, and the Department believes 30 

days gave the public sufficient time to 

prepare a response to the proposed 

regulations. Over 450 individuals and 

entities commented on the NPRM, and 

many provided detailed and lengthy 

comments. Those comments have 

helped the Department identify areas for 

improvements and clarification that 

have resulted in improved final 

regulations. 

Additionally, the negotiated 

rulemaking process, which began in the 

Spring of 2023, provided significantly 

more opportunity for public engagement 

and feedback than standard notice-andcomment rulemaking, which does not 

include multiple negotiation sessions. 

For example: 

• The Department began the 

rulemaking process by inviting public 

input over 3 days of public hearings 

from April 11–13, 2023; all who 

requested to speak were accommodated 

during the hearings on April 11 and 12, 

which led the Department to cancel the 

hearing scheduled for April 13. We 

received 60 public comments as part of 

the public hearing process. 

• Following the public hearings, the 

Department sought non-Federal 

negotiators for the negotiated 

rulemaking committee who represented 

constituencies that would be affected by 

our rules. As part of these non-Federal 

negotiators’ work on the rulemaking 

committee, the Department asked that 

they reach out to their broader 

constituencies for feedback during the 

negotiation process. 

• During each of the three negotiated 

rulemaking sessions, we provided 

opportunities for the public to 

comment, including after seeing draft 

regulatory text, which was available 

prior to the first, second, and third 

sessions. The Department and the nonFederal negotiators considered those 

comments to inform further discussion 

at the negotiating sessions, and we used 

the information to create our proposed 

rules. 

Furthermore, while the Executive 

Orders cited by the commenter 

recommend an appropriate time for 

public comment, they do not require 

more than 30 days, nor do they take into 

account the significant additional public 

input garnered through the mandated 

negotiated rulemaking process under 

the HEA. 

Changes: None. 

3. Distance Education (§§ 600.2, 668.3, 

668.41) 

General Support 

Comments: There were several 

commenters who supported the 

Department’s proposed rules on 

distance education. They cited the 

increasing role of distance education in 

higher education and the associated 

need for better measurement of the 

effectiveness of that instruction by 

looking at student outcomes. They 

agreed that the new definitions and 

reporting requirements will make such 

oversight easier through the collection 

of needed data. 

Discussion: The Department 

appreciates the feedback from 

commenters. 

Changes: None. 

General Opposition 

Comments: Many commenters 

expressed concern that the new 

regulations would impose an 

administrative burden on institutions. 


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4https://www.usnews.com/education/onlineeducation/marist-college-2765/bachelors. 

5https://www.excelsior.edu/about/. 

6https://www.sanjac.edu/programs/online. 

Some felt that the proposed rules 

evinced a bias against distance 

education as being of inferior quality to 

traditional in-person education. 

Discussion: In general, we believe that 

the administrative burden will be less 

than some commenters raised, both due 

to clarifying some areas of confusion as 

well as the decision to not finalize some 

proposals that were in the NPRM. The 

benefit from the remaining burden is 

acceptable because it will help the 

Department in its administration of the 

title IV, HEA programs. We provide 

greater detail on the provisions that are 

not being finalized in the relevant 

sections that discuss comments related 

to those provisions. 

Changes: None. 

Comments: A few commenters 

suggested the proposed regulations will 

stifle innovation in distance education 

that has occurred in the wake of the 

pandemic. The commenters stated that, 

in their view, the distance education 

practices established during that 

national emergency are not what 

prevails now; rather, according to the 

commenters, distance education has 

only improved and is constantly 

becoming more rigorous, and therefore 

the Department should be more 

restrained in writing new rules. 

Discussion: While the Department 

agrees that distance education has 

continued to expand since the 

pandemic, we disagree that the final 

regulations will hamper its 

development. Additionally, rather than 

limiting innovation and improvement in 

the distance education sector, the 

Department’s efforts to improve datagathering related to distance education 

will eventually result in improved 

research on outcomes for students 

enrolled in distance education programs 

and provide new data for institutions to 

use to improve their programs. To the 

extent this comment was referring to 

proposals related to the treatment of 

asynchronous clock hours, we note that 

proposal will not be finalized but may 

be addressed through future rulemaking 

efforts. 

Changes: None. 

Comments: Some commenters noted 

that the timeline for implementation is 

too short and that institutions will need 

more time to be able to incorporate the 

changes. A couple requested that the 

Department set aside the current 

rulemaking and instead continue with 

negotiations on distance education 

topics with more qualified negotiators 

who have sufficient background to 

adequately advise on and advocate for 

distance education. 

Discussion: The Department 

acknowledges commenters’ concerns 

that additional time will be needed for 

institutions to adapt their systems and 

procedures to implement these new 

regulations. Since these rules are being 

published after November 1, 2024, the 

effective date will not be until July 1, 

2026, with the provision on distance 

education reporting extended to July 1, 

2027. This provides the institutions a 

full additional year to make any 

adjustments that are necessary for 

implementation than if the rules had 

been finalized prior to November 1, 

2024. Given the approximately 18 

months afforded to institutions to 

implement these provisions, the 

Department does not believe further 

adjustments to the implementation date 

are necessary. 

We do not agree with the commenters 

who suggested that the negotiated 

rulemaking committee lacked 

appropriate expertise, and we decline 

the suggestion to restart rulemaking 

with a differently constituted 

committee. The primary negotiator from 

the for-profit sector has extensive 

experience in online education and also 

participated on the committee for the 

Distance Education and Innovation 

regulations published in 2020. The 

primary negotiator for school business 

officers is from an institution that has 

robust and well-regarded distance 

education coursework and has been 

offering online bachelor’s degree 

programs since 2003–2004.4 The 

alternate negotiator for private nonprofit 

institutions, who was active during 

negotiations, is from a distance learning 

school that was among the first to offer 

online courses in the 2000’s.5 The 

primary negotiator for financial aid 

administrators is from a college that 

offers 26 associate degrees and 34 

certificates 100 percent online in a 

variety of disciplines.6 This is only a 

partial list of negotiators with 

experience with distance education. 

Contrary to the commentor’s suggestion, 

there was clearly sufficient experience 

on the panel for negotiators to put forth 

informed opinions and suggestions 

regarding the Department’s distance 

education proposals. 

Changes: None. 

Comments: Commenters contended 

that various parts of the distance 

education provisions violate the 

Supreme Court’s ruling in Loper Bright 

Enterprises v. Raimondo, 144 S. Ct. 

2244 (2024), which they claim affirms 

that agencies are not at liberty to 

expound via regulation where the law is 

already clear. 

Discussion: As a general matter, the 

Department notes that the Loper Bright 

decision does not preclude an agency 

from regulating where statutory 

language is clear. Rather, the decision 

requires an agency’s regulation to be 

consistent with the plain language and 

best reading of an authorizing statute. 

See, e.g., Loper Bright, 144 S. Ct. at 

2266, 2271. As addressed in the specific 

sections below, the revised regulations 

satisfy that standard. 

Establishment of Virtual Locations 

Comments: Several commenters 

agreed with the Department’s proposed 

definition of virtual location in § 600.2 

because it will allow for better tracking 

and oversight of distance education as 

well as loan discharges when a virtual 

location closes. The commenters 

indicated that such oversight would 

permit comparison of student outcomes 

in programs using different modalities 

within institutions as well as programs 

across institutions. One commenter also 

noted that it may increase the demand 

for online education because, the 

commenter stated, schools could 

formally expand and market their 

virtual campuses and possibly reduce 

the operating costs of maintaining 

physical locations. 

Discussion: The Department 

appreciates the commenters’ support. 

Changes: None. 

Comments: Commenters raised a 

number of concerns about the new 

virtual location definition, including 

about its scope, the additional 

administrative costs of coordination 

across programs, the impact of the 

residency requirement on low-residency 

programs, and the potential burden on 

accreditors to ‘‘visit’’ such programs. 

Others requested delayed 

implementation of this provision or 

delay until other independent 

accreditation regulations go into effect. 

Still others asserted that the Department 

did not have the authority to treat a 

virtual location as a completely separate 

entity for purposes of loan discharge. 

Some commenters stated that the data 

the Department seeks can be effectively 

collected through existing reporting 

systems such as the National Student 

Loan Data System (NSLDS) and the 

Common Origination and Disbursement 

(COD) system or the Integrated 

Postsecondary Education Data System 

(IPEDS). The commenters assert that it 

is redundant and impractical to redefine 

a modality as a location. 

Discussion: As noted in the NPRM, 

the Department proposed the addition 

of a virtual location because we have 


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7 In outlining its legal authority for the rules set 

forth in the NPRM, the Department inadvertently 

omitted the general authority provision at 20 USCS 

1221e–3, and the general loan provisions at 20 

USCS 1082(a)(1), 1087a(b). The Department is 

rectifying those omissions here. 

been hampered in the ability to fully 

understand students’ participation in 

distance education, account for 

differences in outcomes and conduct 

oversight, accurately measure taxpayer 

expenditures on distance education 

programs, and gauge the success of such 

education (89 FR 60256). The 

Department had initially proposed the 

creation of a virtual additional location 

because we believed that would 

accomplish our goals at a lower burden 

to institutions. Under this proposal, 

institutions would report only programs 

that were fully distance-based at a single 

virtual location. 

During negotiated rulemaking, the 

Department agreed to collect distance 

education enrollment information for 

students receiving title IV, HEA 

assistance through NSLDS. Non-Federal 

negotiators believed that such 

information would permit a more 

granular understanding of outcomes for 

students enrolled in distance education 

or correspondence courses. 

In considering both the virtual 

location proposal and the proposal for 

NSLDS reporting, we have determined 

that it is not necessary to include both 

proposals. Given the greater support 

from institutions for the NSLDS 

reporting, as well as concerns about 

potential implications for site visits and 

other issues identified above, we have 

decided to not move forward with the 

proposal for a virtual location. We will 

instead collect the relevant information 

through NSLDS. The NSLDS data 

collection does not have any effect on 

closed school loan discharges. 

Changes: We have removed the 

definition of a virtual additional 

location from § 600.2. 

Asynchronous Instruction and Clock 

Hours (Definition of ‘‘Clock Hour’’ in 

§ 600.2) 

Comments: There were several 

commenters who supported the 

Department’s proposal to prevent 

completion of asynchronous distance 

education coursework from counting as 

clock hours in clock-hour programs, by 

modifying the definition of ‘‘clock 

hour’’ in § 600.2, even though this 

change will remove some options from 

affected schools and students. They 

agreed with the Department’s rationale 

for making this change. One commenter 

pointed to how, during the open 

comment periods of the negotiated 

rulemaking sessions, multiple students 

testified about using their financial aid 

to pay for expensive clock-hour 

programs that consisted solely of 

YouTube videos that were free to the 

public, with little to no interaction with 

instructors, and that none of these 

students received any hands-on 

training, typically required by clockhour programs, and none of them 

learned the skills necessary to succeed 

in the professions for which they 

trained. 

Discussion: The Department 

appreciates the support from 

commenters. As discussed in the NPRM 

(89 FR 60259), the Department has 

heard similar concerns from students 

through complaints and in program 

reviews. 

Changes: None. 

Comments: Several commenters 

suggested that the Department’s 

proposal exceeds its authority, asserting 

that it completely removes a form of 

education delivery provided in the HEA 

and ignores the Department of 

Education Organization Act (DEOA). 

Commenters asserted that the HEA does 

not give the Department the authority to 

treat asynchronous clock- and credithour programs differently, and that the 

HEA definition of distance education in 

section 103(7) specifically allows for 

this mode of instruction when it states 

that distance technologies are ‘‘to 

support regular and substantive 

interaction between the students and 

the instructor, synchronously or 

asynchronously.’’ One commenter 

observed that there is no statutory 

distinction between clock- and credithour programs in distance education, 

that section 481(b)(3) of the HEA (20 

U.S.C. 1088) only requires an ‘‘eligible 

program’’ to have the capability to 

effectively deliver distance education, 

and that section 481(b)(4) of the HEA 

acknowledges that an ‘‘eligible 

program’’ can include credit hours or 

clock hours. One commenter asserted 

that the Department’s citation of section 

400(b) of the HEA for the broad 

authority to regulate in this area is 

unwarranted, especially in the wake of 

the Supreme Court’s recent Loper Bright 

decision, which removed the Chevron 

deference that previously was accorded 

to Federal agencies (section 400(b) of 

the HEA states that the Department will 

‘‘carry out programs to achieve the 

purposes of this part.’’) The commenter 

noted that section 400(b) of the HEA is 

about title IV grant and benefit 

programs, not asynchronous instruction, 

and asserted that the Department is 

trying to assume authority it no longer 

has. 

Commenters also asserted that the 

Department did not sufficiently explain 

why it reversed the stance it took in the 

2020 final rule, which the commenters 

believed was the product of rulemaking 

consensus, and that the proposed 

regulation was thus in violation of the 

Administrative Procedure Act. One 

commenter asserted that the 2024 

proposed regulation moves backward 

what the commenter believed was a 

consensus position in 2020. Another 

commenter pointed out that the 

Department agreed with the testimonials 

of commenters in 2020 about the 

efficacy of asynchronous delivery and 

confirmed in the final rule that it was 

acceptable. The commenter also 

asserted that most schools did not start 

using asynchronous delivery until 2022, 

so it is too soon to determine that it is 

ineffective. 

Discussion: The Loper Bright decision 

does not prohibit an agency from 

regulating; rather, it requires the rules to 

be consistent with the plain language 

and best reading of the authorizing 

statute. 

Congress authorized the Department 

to promulgate regulations governing 

applicable programs and gave the 

Department broad authority to carry out 

the purposes of the various title IV 

programs. See 20 U.S.C. 1070(b)(HEA 

section 400(b)); 1082(a)(1)(HEA section 

432(a)); 1087a(b)(HEA section 451(b)).7

Contrary to the commenters’ claim, 

these general provisions provide the 

Department the ability to ensure that 

any general provisions, such as those 

related to distance education, are 

promulgated fulfill the purpose of the 

grant and loan programs, which is to 

meet the needs of the student 

beneficiaries. 

In defining an eligible title IV 

program, Congress recognized that clock 

hours and credit hours are two separate 

and distinct forms of instruction. See 20 

U.S.C. 1088(b). While the HEA does not 

define a clock hour, the regulatory 

definition of a clock hour was first 

adopted in November 1974 (39 FR 

39412). That definition stated that a 

clock hour was measured based upon 

spending 50 to 60 minutes in direct 

instruction or in a faculty-supervised 

learning opportunity such as a 

laboratory, shop, or internship. Until 

2020, that definition went largely 

unchanged except for the inclusion of a 

definition for correspondence courses. 

The longstanding interpretation of a 

clock hour also followed the plain 

meaning of the term—it is an hour as 

measured by the 60 minutes displayed 

for one rotation of the minute hand on 

a clock. In contrast, the concept of a 

credit hour is based on a combination of 

both learning with an instructor and 

learning outside of the classroom, as 


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8 In these regulations a credit hour is defined as 

one that reasonably approximates one hour of 

‘‘classroom or direct faculty instruction’’ and two 

hours of ‘‘out-of-class student work’’ per week, or 

an equivalent amount of work for other academic 

activities. 

9https://www.ecfr.gov/current/title-34/part-600/ 

section-600.2#p-600.2(Clock%20hour). 

described in the definition of a credit 

hour in § 600.2.8 Nothing in these 

regulations affects an institution’s 

ability to offer asynchronous instruction 

as part of a credit-hour program. 

The decades-long definition of a clock 

hour never included the concept of outof-class work. It also does not turn on 

whether a program is offered virtually. 

This definition predated the creation of 

the internet, and it remained in place for 

nearly 15 years after fully online 

programs were allowed in the title IV 

HEA programs. Congress also did not 

change this interpretation in the last full 

reauthorization of the Higher Education 

Act in 2008. 

The distinct nature of clock-hour 

programs and the Department’s 

longstanding interpretation of the term 

must be considered when interpreting 

the statutory language providing that 

distance education can be provided 

synchronously or asynchronously. The 

concepts of credit hours and clock hours 

had been well-established for many 

years when Congress amended the law 

to create the definition of ‘‘distance 

education’’ providing for both 

synchronous and asynchronous online 

education.10 There is no reason to 

believe that Congress intended to 

overturn the traditional concept of a 

clock hour as an hour of supervised 

instruction because of the addition of 

the word ‘‘asynchronous’’ in that new 

definition. At that time, the vast 

majority of programs using distance 

education were offered through credit 

hours, especially given the hands-on 

nature of clock hour programs. The 

revised regulation preserves the unique 

nature of clock-hour programs and 

ensures the requirement for 50–60 

minutes of supervised instruction is 

met. Moreover, there is no statutory 

prohibition against treating the two 

differently for specified purposes. 

In an effort to clarify the definition of 

a clock hour and allow for greater 

innovation in clock-hour programs, the 

Department included changes to the 

definition in negotiated rulemaking in 

2019. During negotiated rulemaking, the 

Distance Learning and Educational 

Innovation subcommittee raised 

concerns about allowing clock hours to 

count toward title IV, HEA eligibility if 

they did not involve direct synchronous 

instruction. The subcommittee 

specifically noted that asynchronous 

clock hours would be more akin to 

homework, which cannot be counted 

toward title IV, HEA eligibility in brickand-mortar clock-hour programs, which 

would create an unfair inconsistency 

between programs using different 

modalities. Commenters are thus 

mistaken that the provision in the final 

2020 rule was the product of consensus. 

In fact, in 2020, the change to 

asynchronous learning for clock-hour 

programs was not part of that consensus 

language. Rather, consensus was 

reached on a version of the rule in 

which asynchronous clock hours were 

not permitted for title IV, HEA 

purposes, the same principle the 

Department proposed in 2024, and that 

consensus version was in the 2020 

NPRM. The final 2020 rule departed 

from such consensus in response to 

public comments, largely from 

cosmetology schools. The adoption of 

this changed position was not motivated 

by an underlying change in the statute. 

Nor did the final rule include any 

analysis or research of the specific 

innovations that merited the upending 

of more than four decades of agency 

precedent. 

In the preamble to those regulations 

(85 FR 54752), we specifically noted our 

continued concern that clock hours 

offered asynchronously could be used as 

a means to complete unsupervised 

homework. The Department was 

attempting to allow for alternative 

educational approaches while 

attempting to maintain the longstanding 

position that, aside from 

correspondence courses, clock hours 

may only be counted for coursework 

that occurs in the classroom or through 

clinical or hands-on activities, whereas 

time spent outside of the classroom with 

supporting materials, including reading 

or passive consumption of videos, 

cannot be counted toward a student’s 

title IV, HEA eligibility. See, e.g., 

paragraphs (1)(i) and (ii) of the 

definition of a clock hour in § 600.2, 

both of which predate the distance 

education definition established in 

2020.9 Specifically, in the 2020 final 

rule we stated that: ‘‘The Department 

remains concerned about the possibility 

that clock hours offered asynchronously 

could be used as a means to complete 

unsupervised homework assignments 

rather than coursework that otherwise 

would have occurred in the classroom, 

which is prohibited under the 

Department’s longstanding policy for 

clock-hour programs’’ (85 FR 54742). 

However, in light of the range of 

public comments, the Department 

revisited this provision in the 2024 

NPRM and ultimately has decided to 

not finalize it. We will continue to 

conduct oversight on how institutions 

offer any asynchronous clock hour 

programs and may revisit this issue at 

a later date through a future rulemaking 

effort if we find continued evidence of 

widespread problems. 

Because we are not finalizing this 

proposal, the Department maintains the 

position taken in 2020 that any distance 

education clock hour program delivered 

in whole or in part through 

asynchronous methods must involve 

regular and substantive interaction with 

an instructor, as defined in the 

definition of ‘‘distance education’’ in 34 

CFR 600.2. Ensuring regular and 

substantive interaction includes 

continuous and active monitoring of 

student academic engagement. 

Additionally, these programs cannot 

count toward a student’s title IV, HEA 

eligibility time that is more comparable 

to homework, such as reading or 

watching videos, and they must ensure 

that active engagement occurs during 

hours that are included in a student’s 

eligibility. Institutions wishing to offer 

asynchronous clock hour programs must 

ensure they have the technological 

solutions in place necessary to make 

these kinds of assessments. Failure to do 

so could result in institutions owing 

liabilities to the Department or facing 

other administrative actions. If the 

Department continues to encounter noncompliance with these requirements, we 

may propose additional protective or 

restrictive measures on clock hours 

offered asynchronously, or once again 

propose a full ban as proposed in the 

NPRM. 

With respect to the assertion that the 

Department ignored the DEOA, the 

commenter did not indicate how or why 

they felt the DEOA was ignored, and 

therefore the Department is unable to 

respond to that comment. 

Changes: We have removed the 

changes to § 668.3(b)(2)(ii)(A) and (B) 

that would have limited asynchronous 

coursework that can count toward an 

institution’s definition of an academic 

year to coursework offered in credithour programs. 

Comments: Multiple commenters 

asserted that the Department did not 

provide sufficient evidence that 

asynchronous instruction is a problem. 

According to the commenters, it was not 

sufficient for the Department to rely on 

its stated experience in program reviews 

as well as student complaints when it 

has not made such documents public. 

One commenter went on to state that 

unspecified and unexplained reasoning 

does not satisfy the Supreme Court’s 

standard for an examination of the 

relevant data and a reliance upon 


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10https://pubmed.ncbi.nlm.nih.gov/24821756/. 

11A Pilot Study Exploring Interaction and 

Student Satisfaction in Asynchronous Courses in 

Higher Education | TechTrends. 

12https://www.semanticscholar.org/reader/

e12a9dfea127f0d7c287453a848ce2378ed28fdc. 

13https://pmc.ncbi.nlm.nih.gov/articles/ 

PMC8043318/pdf/ats-scholar.2020-0046PS.pdf. 

14See id. 

15https://www.researchgate.net/publication/ 

356349861_BLENDED_ONLINE_LEARNING_

COMBINING_THE_STRENGTHS_OF_

SYNCHRONOUS_AND_ASYNCHRONOUS_

ONLINE_LEARNING_IN_EFL_CONTEXT. 

16See id. 

17https://link.springer.com/article/10.1186/ 

s12909-024-05171-1. 

18https://pmc.ncbi.nlm.nih.gov/articles/ 

PMC10960437/. 

19https://www.medigraphic.com/pdfs/ortope/or2023/or232c.pdf. 

20https://pmc.ncbi.nlm.nih.gov/articles/ 

PMC6477961/. 

factual findings and thus renders the 

regulation arbitrary and capricious. 

Commenters also felt it was overbroad 

to prohibit all asynchronous instruction 

in clock-hour courses and that it was 

inaccurate to imply that all synchronous 

and in-person classes are of higher 

quality. 

Several commenters suggested there is 

research (in some instances providing 

citations) that demonstrates 

asynchronous learning is effective and 

therefore should be permitted to count 

as clock hours. 

Discussion: As discussed above, the 

Department has decided to not finalize 

the proposed change to prohibit 

asynchronous clock hour programs. 

In considering the decision to not 

finalize this provision the Department 

reviewed the studies cited by the 

commenters. We did not find any of 

them persuasive in the decision to not 

finalize this provision. We found that 

the studies cited have little to no 

bearing on asynchronous clock-hour 

programs offered by American 

institutions of higher education because 

they focus on international contexts, 

credit-hour programs, non-career and 

technical programs, graduate programs, 

comparisons to in-person as opposed to 

synchronous virtual instruction, or 

outcomes that are not tied to learning 

and course performance. We 

acknowledge that the literature on the 

specific question of the value of 

asynchronous clock hours is 

undeveloped, but that does not justify 

comparisons to unrelated contexts. We 

explain the limitations of specific 

studies cited by commenters below. 

One study cited by commenters is a 

meta-analysis of 225 studies published 

in 2014.10 This study looked at other 

studies that examined the benefits of 

active learning versus lecture settings. 

However, it focused on undergraduate 

instruction in science, technology, 

engineering, and mathematics. Those 

are all historically credit-hour areas of 

learning, and there is no attempt in the 

study or by the commenters to connect 

these findings to clock-hour programs. 

Moreover, neither the commenters nor 

the study considers how clock-hour 

programs are already designed to be 

more hands-on than a traditional 

lecture-based format. We also note this 

piece was published prior to the 2020 

rule that allowed for the offering of 

asynchronous learning in clock-hour 

programs and was never cited or 

considered as part of the decision to 

make that change, suggesting that its 

findings are not relevant to the specific 

issue at hand here: whether 

asynchronous learning is appropriate in 

clock-hour programs. 

Similar limitations exist for another 

study cited by commenters.11 This study 

only considers 27 undergraduate and 

graduate students at a university, which 

has little bearing on clock-hour 

programs since they are not offered by 

this type of institution of higher 

education. The study also focuses on 

student satisfaction outcomes instead of 

the more relevant outcomes of student 

performance and learning. 

Commenters also cited a study 

published in an Iranian medical journal 

in 2018.12 It looks at students 

participating in a practical pathology 

program for one semester in 2016. It 

compared traditional lecture instruction 

to distance learning. A single semester’s 

results from a foreign country’s medical 

education is not informative on the 

question of whether clock hour 

programs in a U.S. setting can be offered 

asynchronously. Training medical 

doctors already entails expectations for 

significant out-of-class work and 

addresses a group of students very 

different from those generally pursuing 

clock hours. 

Issues of comparability appeared in 

many of the other studies cited. For 

example, commenters pointed to a 2020 

study looking at graduate medical 

education in the wake of the COVID–19 

pandemic.13 Again, the level of 

education considered is significantly 

different from asynchronous clock-hour 

programs and already presumes 

significant work conducted by students 

outside of the classroom. It considers 

curricular design options for 

asynchronous learning as well as virtual 

learning. The study also notes ‘‘We do 

not recommend transitioning your 

entire curriculum to an asynchronous 

platform.’’ 14 The study did not consider 

any sort of trial to explore potential 

learning outcomes. 

Many other studies cited ran into the 

same issue of focusing on instruction in 

foreign countries that does not appear to 

be based in clock hours. Commenters 

cited a 2021 meta-analysis of 36 studies 

published in an Indonesian journal that 

focused on the teaching of English as a 

foreign language.15 It considers the 

relative merits of synchronous versus 

asynchronous learning for this specific 

subject matter. These are all distinct 

from what is offered through clock 

hours for title IV, HEA funds. While the 

conclusions are not relevant for the 

considerations of this final regulation, 

the study did find that, for 

asynchronous learning, ‘‘[t]he 

weaknesses involve lack of interaction, 

low mastery of content, dull class, 

connection issues, and network 

issues.’’ 16

A 2024 study cited by commenters 

considering virtual learning for training 

dentists in China faced similar issues.17

It asked 157 fourth-year students and 54 

teachers their opinions on online 

learning using a questionnaire. The 

study found that the ‘‘skill operation 

score’’ of the students taught with some 

virtual learning was lower than that of 

those taught traditionally, though the 

difference was not statistically 

significant. As with other studies cited, 

the study looked at levels of education 

distinct from what the vast majority of 

asynchronous clock hour programs offer 

in the United States. 

In some cases, the studies cited 

considered just a single meeting of a 

course. For instance, commenters cited 

a 2024 Taiwanese study that looked at 

170 fourth-year students attending a 

single dermatology lecture.18 This is 

again an instance where students are 

already expected to conduct significant 

work out-of-class in a program that in 

the United States would be offered in 

credit hours. A study cited by 

commenters of 20 residents or 

orthopedic surgeons in Mexico taking 

an asynchronous course to diagnose 

ankle fractures has the same challenge— 

it is dealing with one lesson given to 

graduate level students who already 

have significant training in the given 

area.19 While a 2019 study cited by 

commenters did focus on second-year 

students, it related to 66 second-year 

students in an Indian university who 

were quizzed on what the authors 

describe as ‘‘low backache.’’ 20 They 

looked at pre- and post-test scores on a 

multiple-choice quiz. While the 

Department does not think this study 

bears on this final regulation, we do 

note the authors stated: ‘‘Furthermore, 

since the undergraduates are introduced 

to new topics each day and have huge 


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Federal Register / Vol. 90, No. 2 / Friday, January 3, 2025 / Rules and Regulations 477 

21https://formative.jmir.org/2022/11/e38862. 

22https://www.sajournalofeducation.co.za/ 

index.php/saje/article/view/1383/868. 

23http://elearning.fit.hcmup.edu.vn/∼longld/ 

References%20for%20TeachingMethod&Edu

Technology%20-%20Tai%20lieu%2

0PPDH%20&%20Cong%20Nghe%20Day%20Hoc/ 

(Book)%20-%20Sach%20tham%20khao%20- 

%20eLearning/e-Learning%20Concepts/ 

Asynchronous%20&%20Synchronous%20eLearning%20(Hrastinski-2008).pdf. 

24https://www.ncolr.org/jiol/issues/pdf/3.1.5.pdf. 

25https://www.tandfonline.com/doi/epdf/ 

10.1080/08923649409526853?needAccess=true. 

26https://er.educause.edu/articles/2020/3/thedifference-between-emergency-remote-teachingand-online-learning. 

27https://journals.lww.com/jehp/fulltext/2021/ 

10000/why_people_are_becoming_addicted_to_

social_media_.223.aspx#. 

syllabi, they may get lost if live 

interactions are replaced with 

asynchronous teaching. There may be a 

gradual decline in motivation due to 

lack of active peer and student–teacher 

interactions.’’ 

None of these studies looks at issues 

comparable to clock-hour programs in 

the United States that are eligible for 

title IV, HEA funds. Extending findings 

from one lecture, quiz, or portion of a 

course for a few dozen people in 

another country does not provide 

persuasive evidence to guide the 

potential awarding of millions if not 

billions of dollars in title IV, HEA funds. 

Other studies did not involve formal 

postsecondary environments at all. 

Commenters cited a 2022 Argentinian 

study looking at the content of just 

under 300 posts on Facebook discussing 

diabetes self-care (the researchers 

excluded posts ‘‘based only on 

emoticons/GIFs, such as clapping hands 

or smiley faces expressing joy.’’) 21 This 

kind of analysis may be useful in the 

public health context, but it has little 

relevance to what criteria formal 

postsecondary programs should meet to 

be supported by taxpayer dollars. 

Similarly, a 2019 Nigerian study 

focused on the use of asynchronous 

learning to teach word processing skills 

to 70 secondary school students.22

Again, those types of skills can be 

valuable, but they are not relevant to 

title IV, HEA programs. 

The studies cited that appeared in 

U.S. journals or publications generally 

were older, focused on a limited number 

of people, were only theoretical, or had 

some combination of those issues. For 

instance, commenters cited a 2008 piece 

in a quarterly publication from a U.S. 

nonprofit focused on the use of 

technology in higher education.23 It 

focused on two online seminars of eight 

and 19 students, respectively. There are 

no other specifics provided around the 

level of postsecondary program, but the 

courses were taught by the author who 

in 2008 was focused on computer and 

systems sciences at a university in 

Sweden. Again, the comparison is not 

specific to clock-hour programs, and 

focusing on different types of credithour experiences fails to consider the 

differences between that type of 

coursework and clock-hour programs. 

A 2004 piece, meanwhile, looked at 

perceptions of the role of the instructor 

in online learning.24 This study predates 

the ability of institutions to offer fully 

online courses that are eligible for title 

IV, HEA funds. This study looked at 

courses to help teachers or 

administrators with preparing for online 

learning, with almost two-thirds of 

participants holding a master’s degree. 

The age of the study, the fact that it was 

focused on professional development 

for students already with advanced 

degrees, and the lack of a connection to 

clock-hour programs all make it 

irrelevant for this final regulation. On a 

similarly theoretical basis is a 2009 

study raised by commenters that looked 

at instructional design strategies.25 It 

also was not used or cited by the 

Department in the 2020 policy change 

despite being available at that time, 

which suggests its limited relevance to 

the specific issue in both the 2020 and 

2024 regulations: the appropriateness of 

asynchronous learning in clock-hour 

programs. Though more recent, a 2020 

article cited by commenters considered 

how to handle emergency transitions to 

online learning due to the pandemic, 

without any evaluative component.26

Those considerations are not relevant 

for the lasting policy change discussed 

in this final regulation. 

The studies presented by commenters 

thus did not factor into our decision to 

not finalize the provision. Our reasons 

for not finalizing the provision are 

discussed elsewhere in this preamble. 

Changes: We have removed the 

changes to § 668.3(b)(2)(ii)(A) and (B) 

that would have limited asynchronous 

coursework that can count toward an 

institution’s definition of an academic 

year to coursework offered in credithour programs. 

Comments: Commenters did not feel 

that the two studies cited by the 

Department in support of the 

prohibition on asynchronous clock-hour 

learning were valid and relevant. One 

commenter noted that both studies 

occurred when remote learning was 

imposed during COVID, which the 

commenter characterized as an atypical 

remote learning experience. The 

commenter noted that one study was an 

analysis of another organization’s 

student satisfaction survey, which, 

according to the commenter, addressed 

student responses to programs that took 

place during the time of remote learning 

due to COVID without a clear 

explanation of the educational 

experience. The commenter stated that 

it is not surprising that students forced 

into emergency remote learning during 

COVID would lament the lack of handson training, and that this experience 

does not reflect the planned online 

programs that keep tasks that require 

hands-on experience intact while using 

asynchronous learning only for didactic 

instruction. The commenter found the 

second study unreliable because it also 

occurred during COVID-era instruction. 

While the commenter acknowledged 

that this study focused on outcomes and 

not just student satisfaction, the 

commenter pointed out that it was of 

one class at one institution with only 33 

students and that, according to the 

commenter, the asynchronous 

instructional methodology described in 

the study does not appear to be typical 

but rather something that may have 

been adapted for emergency remote 

COVID-era instruction, which does not 

represent the student experience in 

planned online instruction. 

Discussion: As discussed above, the 

Department has decided to not finalize 

the proposal to prevent title IV aid at 

asynchronous clock-hour programs. We 

note the cited studies questioned by 

commenters were not the primary basis 

for the proposal in the NPRM nor the 

choice to not finalize this provision. 

That said, we do agree that the study 

that focused on delivering lectures both 

asynchronously and synchronously has 

many of the same issues with the 

reports cited by commenters—they 

focus on graduate-level education in a 

foreign setting and are thus not 

comparable to clock-hour offerings.27

We note that the findings from 

student satisfaction surveys in the other 

study questioned by commenters 

highlight student concerns that they 

need hands-on training to succeed in 

certain environments and often do not 

receive it. While this survey also does 

not directly consider clock-hour 

programs in synchronous or 

asynchronous learning environments, it 

looks at a U.S. setting and considers 

types of workforce training that are 

more similar to U.S. clock-hour 

programs. We will continue to monitor 

the research in this area as we weigh 

options going forward. 

Changes: We have removed the 

changes to § 668.3(b)(2)(ii)(A) and (B) 

that would have limited asynchronous 

coursework that can count toward an 


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478 Federal Register / Vol. 90, No. 2 / Friday, January 3, 2025 / Rules and Regulations 

institution’s definition of an academic 

year to coursework offered in credithour programs. 

Comments: Commenters were 

concerned that removing asynchronous 

clock hours could remove flexibility for 

students who might have difficulty 

accessing synchronous instruction, such 

as those that must work or care for 

others, who are in rural areas, and 

students who cannot attend school 

synchronously, including veterans and 

those currently in the military. Others 

were concerned that disallowing 

asynchronous clock-hour learning 

would impact programs addressing 

shortage areas, such as nursing, EMT, or 

public safety. 

Others asserted that some 

asynchronous learning works as well or 

better than synchronous learning. One 

association asserted that its member 

schools report higher levels of 

completion, licensure, and placement 

rates in programs using asynchronous 

distance learning. Commenters assured 

that schools are successfully using 

tracking technology, which can be very 

robust in its capabilities to monitor 

students, provide them with learning 

opportunities, and keep them on track. 

One commenter asserted that the 

Department acknowledged in 2020 that 

adequate technology existed, and it has 

only improved since then, and 

wondered what had changed to cause 

the Department to change its mind. One 

association commenter noted that 

investments by its members in the 

technology for asynchronous education 

are reported to be as much as $450,000 

to $500,000 per institution and that 

these investments will be lost if the rule 

goes into effect as proposed. The 

association also asserted that 

institutional investments cannot simply 

be converted to synchronous learning. 

Others felt that the Department should 

have provided statistics on noncompliance as part of a comprehensive 

assessment of asynchronous learning. 

Commenters asserted that, instead of 

harming these institutions that have 

adequately provided asynchronous 

instruction combined with hands-on 

training as a part of clock-hour 

programs, the Department should focus 

on providing clearer guidance and 

standards for non-compliant schools 

and allow them time to come into 

compliance. 

Some commenters suggested that, 

rather than completely removing 

asynchronous instruction from clockhour programs, the Department should 

limit asynchronous education to a 

certain percentage (several suggested 50 

percent) or number of hours of a 

program (one suggested a percentage of 

the programs offered) or to didactic 

components of programs. Some 

commenters noted that many programs 

offering asynchronous instruction 

already limit the amount of the program 

that is offered asynchronously or have 

pared it back since the end of the 

COVID pandemic and have gone back to 

programs that consist primarily of inperson instruction with a smaller 

asynchronous component. One 

commenter posited that only about half 

of states have authorized asynchronous 

delivery and that in those States it has 

been limited to didactic portions and no 

more than 50 percent of all clock hours. 

That commenter suggested that the 

Department could require schools to 

demonstrate that the asynchronous 

methods are comparable to synchronous 

methods on ‘‘student engagement, 

objectives, effectiveness, and 

educational outcomes.’’ 

Some commenters noted that 

institutions are already required by the 

regulations to ensure regular and 

substantive interaction between 

students and faculty and that this is a 

sufficient check on substandard 

instruction. Some asserted that 

accreditors and State regulators are 

tasked with the job of assuring that 

programs provide adequate education, 

and those oversight bodies have 

accounted for asynchronous learning 

with adequate measures, such as by 

limiting the percentage of program 

hours of such learning that can occur. A 

few suggested that there be a specialized 

accreditation or that some existing 

oversight mechanism be used, such as 

the Peer Online Course Review, that 

would ensure the quality of 

asynchronous programs. 

One commenter observed that in 

many States, career and technical 

education (CTE) accredited programs 

offered in clock hours provide the same 

content as nearby credit-hour programs 

but will be negatively affected solely 

because of their institutional structure. 

As a solution, one commenter suggested 

not eliminating such asynchronous 

education in clock-hour programs but 

treating it as correspondence 

coursework, which offers limited access 

to title IV, HEA funds. 

Multiple commenters asked that the 

Department delay the implementation of 

the modification to the definition of 

‘‘clock hour’’ in § 600.2, if it proceeds 

with the regulation change, with one 

asking for a delay until at least 2027. 

Commenters also sought clarity about 

the impact of the regulations on 

students who are already enrolled in 

affected programs. 

A couple commenters noticed that, by 

specifying in the definition of a ‘‘week 

of instructional time’’ in proposed 

§ 668.3(b)(2) that asynchronous 

coursework occurs in credit-hour 

programs, we have, perhaps 

inadvertently, prevented direct 

assessment programs from using 

asynchronous coursework. 

One community college system 

commenter anticipated that the colleges 

in its system will review their clockhour programs with the intention of 

converting them to credit hours, which 

will be burdensome. 

Discussion: As discussed above, the 

Department is not finalizing the 

provision to prevent asynchronous 

clock-hour programs from being eligible 

for title IV, HEA funds. Because this 

provision is not being finalized, the 

concerns from the commenters are no 

longer relevant. 

Changes: We have removed the 

changes to § 668.3(b)(2)(ii)(A) and (B) 

that would have limited asynchronous 

coursework that can count toward an 

institution’s definition of an academic 

year to coursework offered in credithour programs. 

Comments: One community college 

commenter suggested the Department 

should permit clock-hour programs to 

be offered through distance education 

during periods of emergency situations, 

such as natural disasters. 

Discussion: The Department does 

permit colleges to offer clock-hour 

programs via distance education during 

a federally declared emergency, such as 

a hurricane, fire, or pandemic, and still 

receive Federal student aid funding, but 

certain conditions must be met. For 

example, the Department provided 

guidance allowing institutions to 

transition clock-hour programs to 

distance education during the COVID– 

19 emergency under specific temporary 

waivers. 

Changes: None. 

Definition of Distance Education Course 

Comments: Several commenters 

supported the definition of a distance 

education course as consisting entirely 

of distance instruction notwithstanding 

in-person non-instructional 

requirements because they stated it 

would clarify the scope of such courses, 

assess their effectiveness, and ensure 

consistency across institutions. The 

commenters also stated that it would, as 

noted in the NPRM (89 FR 60262), assist 

institutions considering when they need 

to seek additional accreditor approval 

for passing the 50 percent threshold for 

the number of distance education 

courses or number of students enrolled 

in distance education. 

Discussion: The Department 

appreciates the commenters’ support for 


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provisions we believe will help with 

consistency and oversight of such 

coursework. 

Changes: None. 

Comments: There were concerns from 

several commenters that the addition of 

a definition of distance education 

course and other reporting requirements 

would create a student unit record 

system, which is explicitly proscribed 

in the HEA. 

Discussion: The commenter appears 

to be referring to section 134 of the 

HEA, which prohibits, with certain 

exceptions, the development of a 

database containing personally 

identifiable information on individuals 

receiving title IV Federal financial 

assistance. Section 134(b)(1) of the HEA 

specifically provides an exception for, 

among others, the title IV programs, so 

section 134 is inapplicable to these 

regulations. 

Changes: None. 

Comments: A few commenters 

observed that the proposed definition of 

distance education course includes 

residency experiences, which can vary 

greatly in length, or could allow for 

some in-person instruction. One 

commenter asked how long a residency 

experience could be while still meeting 

the new definition; for example, 

whether an offering would qualify as a 

distance education course if there were 

a single lecture or two and the balance 

of the class consists of online work. The 

commenter also asked whether there 

was a threshold for a hybrid class to be 

considered a distance education course. 

The commenter pointed out that the 

difference between the IPEDS definition 

of distance education course and the 

one in these regulations is the residency 

experience, and inquired as to how the 

Department would reconcile the two 

definitions. Another commenter asked 

that the Department add clarity 

pertaining to clinical rotations, which 

often occur away from the school’s 

campus. The commenter stated, for 

example, that students complete some 

of their requirements virtually for the 

didactic components of the course but 

receive in-person instruction from 

preceptors during the hands-on part of 

their rotation; the commenter asserted 

that such rotations should not count as 

distance education courses. One 

commenter suggested that the definition 

of distance education course be further 

separated, such as by distinguishing 

between synchronous and asynchronous 

instruction. 

Discussion: We have removed the 

phrase ‘‘residency experiences’’ from 

the definition of a distance education 

course, in part due to the concerns 

expressed by commenters regarding the 

inconsistency of this definition with the 

IPEDS definition and the complexity 

created by an undefined period for inperson coursework that could be 

included in a particular class. This 

resolves most of the concerns presented 

by the commenters. 

Regarding clinical rotations, if the 

hands-on portions count as essential 

parts of a course, such a course would 

not fall under the definition, but if no 

required part of a course is in-person, 

the course would fall under the 

definition of distance education. For 

example, if a student in a medical 

rotation takes one class that involved 

the actual praxis part of the rotation as 

well as one virtual class in biology that 

has no in-person component, the 

student is enrolled in one class that is 

not a distance education course (praxis) 

and one that is (biology). Also, hybrid 

courses in which any portion is inperson instruction, no matter how 

small, would not be distance education 

courses. Finally, there is no plan to 

distinguish between types of distance 

education courses because we believe 

that the categorization as proposed is 

sufficient. 

Changes: The phrase ‘‘residency 

experiences’’ has been removed from 

the definition of distance education 

course. 

Comments: Some commenters stated 

that the proposed addition of distance 

education course inaccurately 

characterizes residency experiences as 

non-instructional, but not only are 

residency experiences instructional and 

allow students to apply knowledge from 

their coursework, they are sometimes 

required to satisfy accreditation and 

state licensure standards. The 

commenter noted that during 

negotiations the Department supported 

moving the phrase ‘‘residency 

experiences’’ before ‘‘non-instructional’’ 

in the definition, but it did not do so in 

the NPRM. 

Discussion: We agree with the 

commenter. However, as described 

above, we have eliminated the phrase 

‘‘residency experiences’’ from the 

definition of distance education course. 

Changes: The phrase ‘‘residency 

experiences’’ has been removed from 

the definition of distance education 

course. 

Comments: Several commenters were 

concerned that the Department’s 

proposed definition of a distance 

education course might not align with 

other definitions used by institutions 

and that the Department’s changes may 

prompt unwarranted regulatory scrutiny 

of distance education programs. They 

suggested that any amended definitions 

or new reporting requirements should 

consistently promote strong student 

outcomes across all modalities of 

learning. 

Discussion: The Department considers 

the new definitions to be 

straightforward and disagrees that they 

will cause undue and unspecified 

regulatory misalignment or scrutiny of 

distance education programs. To the 

contrary, the changes will instead 

facilitate what the commenters are 

seeking: stronger student outcomes 

across all modalities of learning by 

providing necessary information 

pertaining to those modalities. 

Changes: None. 

Comments: One commenter felt that 

the Department’s definition of distance 

education course conflicted with 

section 484(l)(1)(A) of the HEA. 

Specifically, the commenter asserted 

that there was a conflict between the 

HEA, which considers distance 

education to include courses offered 

‘‘principally’’ through distance 

education, and the Department’s 

proposed definition, which restricts the 

definition to courses offered 

‘‘exclusively’’ through distance 

education. 

Discussion: The commenter appears 

to have misunderstood the meaning of 

section 484(l)(1)(A) of the HEA. The two 

cited provisions serve different 

functions and are not in conflict. Unlike 

the regulation at issue here in § 600.2, 

the statutory text does not, and is not 

intended to, define distance education. 

Instead, it is designed to determine who 

is enrolled in correspondence courses, 

stating that a student in a ‘‘course of 

instruction’’ leading to a degree or 

certificate that occurs principally via 

distance education must not be 

considered enrolled in correspondence 

courses. 

Changes: None. 

Reporting Enrollment in Distance 

Education or Correspondence Courses 

(§ 668.41) 

Comments: There were several 

commenters who supported the 

Department’s intention to gather the 

enrollment status of students, whether 

they are fully in-person, fully online, or 

in a hybrid situation. They agreed with 

the Department that this will be useful 

data for better understanding the 

effectiveness of the instruction 

modalities and appreciated the 

extended time (which will be delayed 

further, until July 1, 2027) for 

implementation of this reporting. 

Discussion: The Department thanks 

those commenters for their support. 

Changes: None. 

Comments: Numerous commenters 

thought that the collection of student 


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enrollment status would add too much 

burden on schools. In addition, the 

commenters indicated that some schools 

already collect data pertaining to how 

instruction is carried out, so the new 

requirement would be redundant for 

them. Commenters asserted that because 

students so often engage in different 

modalities, including within a term, 

collection of such data will be difficult 

and will lack utility. They queried how 

a student who is enrolled in 100% 

distance education courses in one 

semester and 100% in-person the 

following semester would be reported, 

and they asserted that, since the 

Department already collects distance 

education information via IPEDS, it 

should use that for its proposed 

purposes rather than add unnecessary 

requirements. Some predicted that 

while the Department is ostensibly only 

asking for limited enrollment 

information about students, this could 

lead to broader, more burdensome 

requests for data. Some expected that 

the proposal would entail the 

Department creating an ad hoc portal or 

a costly system for reporting the 

information, which would require more 

personnel by schools, and would be a 

problem for the Department and schools 

to implement. One group of schools 

estimated that the data reporting would 

cost approximately $2 million for some 

of its colleges and requested that the 

requirement be delayed until 2027. One 

commenter suggested that the topic be 

discussed in further negotiations with 

negotiators who have the necessary 

experience. 

Discussion: While individual 

institutions might collect such data, the 

new reporting will allow the 

Department to gather such data from all 

schools participating in the title IV, 

HEA programs. At least one commenter 

who supported the proposed change felt 

that institutions that do not already 

track and evaluate this data by modality 

will benefit from collecting and 

analyzing this data, which will help 

inform institutional decision-making 

about program offerings, allocation of 

resources, and selection of outside 

partners to develop and operate online 

programs. And as noted in the NPRM 

(89 FR 60263), although this will 

increase burden for institutions by 

requiring them to report an additional 

layer of enrollment information, we do 

not anticipate that this additional datum 

about a student’s enrollment status will 

cause undue burden or require that 

institutions have to implement new 

systems of reporting because the 

Department is incorporating the change 

into its existing enrollment reporting 

process in NSLDS. As to the choices 

students make with regard to modality, 

the reporting will capture that, whether 

they are enrolled in classes that offer 

mixed modality or those that are purely 

distance or in-person education, 

without the complication commenters 

envision. A student who is enrolled in 

100% distance education courses in one 

semester and 100% in-person courses 

the following semester would be 

reported as distance education the first 

semester and in-person in the second. A 

student who is enrolled in even one 

class that allows for distance education, 

attending remotely as the student 

chooses throughout the semester for 

example, would be in a hybrid status. 

The IPEDS information collection does 

not provide student-level data and is 

therefore not sufficient for the 

Department’s intended purposes. Also, 

the Department proposed only the 

stated request for student enrollment in 

distance education and correspondence 

courses, as requested by negotiators and 

institutions during negotiations. Any 

additional mandates for data would 

need to be negotiated in future 

rulemaking sessions and would be 

subject to public comment. Finally, we 

expect to incorporate the reporting of 

this information into an existing data 

stream; no additional portal or interface 

between schools and the Department 

will be needed, and the cost for such 

reporting will not be in the millions of 

dollars. In the interest of allowing 

institutions ample time for 

implementation, we have decided to 

delay this reporting requirement until 

2027. 

Changes: Institutions will not be 

required to report this information until 

July 1, 2027. 

Comments: Some commenters 

suggested it would be unfair to compare 

distance education data with in-person 

instruction data because such a 

comparison would fail to account for 

differences in the student populations 

attending different modalities. The 

commenters felt that outcomes will be 

different for the distance education 

student population, which, they state, 

generally has less time and flexibility to 

devote to school. 

Discussion: It is unclear from the 

comments whether the commenters are 

opposed to the collection of data or are 

concerned about the use of the data after 

collection. To the extent that the 

commenters are opposing the collection 

of the data because there may be 

differences in the demographics, life 

circumstances, and outcomes of 

students enrolled in distance education 

versus those enrolled in in-person 

instruction, the Department disagrees 

that those potential differences should 

prevent the Department from collecting 

this important data. As set forth in the 

NPRM (89 FR 60263), the reporting 

provision was added at the request of 

negotiators and was intended to provide 

the Department and institutions, 

students, and the public expanded 

information necessary to make informed 

decisions when developing policies 

regarding distance education and to 

provide students additional information 

for enrollment choices. The concerns 

raised by the commenters regarding the 

differences in demographics of distance 

education students does not negate the 

need for the collection of the data. 

With respect to the use after 

collection, the Department would not 

evaluate information about distance 

education in a vacuum. The Department 

maintains other data about recipients of 

title IV, HEA funds—such as their age, 

family size, marital status, employment 

status, and high school completion 

status, as well as whether students have 

dependents they are supporting. These 

factors would also be taken into account 

when developing policies around 

distance education. Although the 

Department cannot speak to how 

institutions will use the distance 

education data, it can note that during 

negotiations institutional 

representatives voiced a desire for the 

information in order to better develop 

distance education courses that meet 

student needs. It is the Department’s 

belief that all parties—the Department, 

Congress, researchers, institutions, 

students, and the general public—can 

benefit when they have program 

outcome data by modality when making 

decisions. 

Changes: None. 

Comments: Several commenters 

pointed out that there is often no sharp 

distinction between distance and inperson education, that students often 

enroll in both at the same time, that 

such enrollment will be difficult to 

track, and that trying to make 

distinctions in such a blended 

environment will, in their view, lead to 

inaccurate assessments of students and 

programs. The commenters asserted that 

flexible instructional modality is 

beneficial to students because it allows 

them to enroll in coursework in the way 

that is most advantageous to them and 

singling out 100% distance education 

for tracking could create unintended 

consequences due to a false binary 

approach and be misleading at a time 

when the interaction between distance 

and in-person instruction is becoming 

more varied. 

Discussion: Regarding commenters’ 

concerns that the proposed data 


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requirements may be difficult to 

implement, given that some students 

enroll in courses offered in several 

different modalities, the Department 

notes that the level of detail required by 

§ 668.41(h) of the final regulations was 

added in response to specific requests 

from non-Federal negotiators. The 

Department altered its proposed 

regulations during negotiated 

rulemaking to require institutions to 

report students’ enrollment in distance, 

in-person, or hybrid education, in 

addition to requiring the reporting of 

virtual locations. The Department 

ultimately agreed with non-Federal 

negotiators that the benefits of collecting 

such additional data outweighed the 

costs and burdens for institutions. 

The Department disagrees with the 

commenters who suggested that the data 

on distance education and 

correspondence course enrollment is 

misleading or creates a ‘‘false binary’’ 

approach. In fact, the Department 

accounts for the fact that students will 

be enrolled in various education 

modalities: in-person, distance, and 

hybrid. The changes will allow us to 

gather information on each modality 

and distinguish between them. The new 

information will not prohibit schools 

from combining and using the 

modalities as they currently do. 

The Department also asserts that 

programs offered entirely or nearly 

entirely using distance education or 

correspondence courses have several 

unique characteristics that distinguish 

them from other programs, including 

the ability to enroll students from a 

significantly larger geographic area and 

a necessarily greater reliance on 

technology as the medium for 

instruction and coursework. These 

characteristics merit analyzing fully 

online programs separate from other 

types of programs. 

Changes: None. 

Comments: Some commenters 

remarked that combining distance 

education with correspondence 

coursework would not allow for 

accurate assessments given that these 

are distinct and separately regulated 

modalities. The commenters felt that 

data from the two should be separately 

collected. One suggested the following 

alternative regulatory language: ‘‘For 

each recipient of title IV, HEA 

assistance at the institution, the 

institution must report to the Secretary, 

in accordance with procedures 

established by the Secretary, the 

recipient’s enrollment status as 

exclusively through distance education, 

exclusively through in-person 

instruction, or through a mix of distance 

education and in-person instruction. 

The procedures established by the 

Secretary will distinguish between 

enrollment in distance education and 

enrollment in correspondence courses.’’ 

Another commenter opined that the EApp system (which schools use to apply 

for designation as eligible title IV 

institutions and for recertification) is 

not designed for such reporting and 

should not be used for it. 

Discussion: As noted in the NPRM (89 

FR 60286), the system details for the 

reporting requirement we are 

establishing in § 668.41 will be clarified 

in future guidance and instructions, but 

we do anticipate distinguishing between 

the two modalities of distance education 

and correspondence courses to allow for 

a comparison between them. We thus 

decline as unnecessary the commenter’s 

suggested alternative language. Also, 

unlike the virtual location requirement 

described elsewhere, we do not expect 

the E-App to be involved in this 

reporting process. 

Changes: None. 

Comments: A commenter suggested 

that the details of this reporting under 

§ 668.41 should be at the student level, 

not at the course level. Currently 

enrollment reporting is done at the 

student and program level by campus 

via NSLDS, and, according to the 

commenter, continuing with this 

method would be the most efficient and 

effective way of reporting. This 

reporting occurs every 60 days, which 

schools are already required to follow 

and, according to the commenter, this 

should be frequent enough. The 

commenter noted that adding one field 

to the existing NSLDS enrollment 

reporting process would be efficient and 

not burdensome. 

Discussion: While the Department has 

not yet determined the details of this 

reporting, we agree that the process 

described by the commenter appears to 

be an efficient method of implementing 

the reporting requirement and anticipate 

that the Department likely will adopt a 

process similar to the one described. We 

also agree that reporting should occur at 

the student level and will not be 

collecting data at the course level. 

Changes: None. 

Comments: One commenter suggested 

expanding the proposed status reporting 

categories in § 668.41 from three to four: 

fully in-person, and at a distance, as 

proposed, but then splitting hybrid 

status into majority distance and 

majority in-person. 

Discussion: The Department believes 

that the three enrollment statuses will 

allow for easy classification of students 

and will provide adequate information 

for the intended purposes, so the 

Department does not currently plan to 

expand that number to four. 

Changes: None. 

Comments: One commenter asked 

how often the new reporting will occur 

and what students will be involved. 

Discussion: Modality of instruction 

will be reported for all students on 

whom the institution would otherwise 

be required to report enrollment. The 

Department intends to align the 

frequency of this reporting (though that 

has not yet been determined) with other 

existing reporting requirements, such as 

occurring every 60 days, which as noted 

above is already the interval for NSLDS 

enrollment reporting. 

Changes: None. 

4. Treatment of Title IV Funds When a 

Student Never Attends or Attends and 

Then Withdraws/Return of Title IV 

Funds (R2T4) (§§ 668.21 and 668.22 ) 

General Support 

Comments: Many commenters offered 

support for the Department’s proposed 

regulations regarding the requirements 

applicable to the return of title IV, HEA 

funds (R2T4). Several of these 

commenters noted the rules received 

broad support during negotiated 

rulemaking and the regulations will 

result in better stewardship of taxpayer 

funds and the integrity of the title IV, 

HEA programs. As one commenter 

noted, the regulations collectively are 

logical and reasonable measures to 

ensure accuracy of R2T4 calculations. 

Many commenters agreed the 

regulations will simplify the R2T4 

process for institutions and provide 

positive benefits to their campus 

community. One commenter noted the 

R2T4 regulations are so complex for 

institutions to navigate that the 

regulations are consistently in the 

Department’s top annual compliance 

findings. One commenter noted that 

simplification of R2T4 calculations will 

encourage students to re-enroll and 

reduce the burden on financial aid 

offices when supporting those students’ 

re-engagement. Another commenter 

states the Department’s proposal is an 

important step in modernizing financial 

aid policies to reflect the growing 

prevalence and success of distance 

education. 

Many commenters agreed the 

proposed changes will benefit students, 

including incarcerated individuals and 

student loan borrowers. Several of these 

commenters noted allowing students to 

repay Direct Loan funds owed to the 

Department after withdrawing or not 

beginning attendance through the terms 

of their Master Promissory Note better 

recognizes the financial realities these 


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students face. Several commenters 

noted these borrowers often cannot pay 

the full amount owed immediately and 

faced penalties such as negative credit 

reporting and collections. Some of these 

commenters believe the proposed rules 

would incentivize institutions to 

voluntarily institute refund policies that 

will reduce the institutions’ burden in 

performing R2T4 calculations, while at 

the same time making it easier for 

students to re-enroll in the future by 

reducing unpaid debts owed to either 

the institution or the Federal 

government. One commenter noted 

these changes will support student 

success regardless of their financial 

situation or academic challenges. 

Some commenters supported changes 

that ensure fewer opportunities for 

institutions to retain title IV, HEA funds 

to which they are not entitled. One 

commenter noted attendance-taking 

requirements for the purposes of R2T4 

for courses offered entirely through 

distance education will better support 

accurate withdrawal dates. 

Discussion: We thank the many 

commenters for their support. We 

believe these final regulations will 

reduce burden on institutions and 

students while also providing 

reasonable and appropriate safeguards 

for taxpayer dollars. As explained in 

greater detail below, we have decided 

not to move forward with two proposals 

from the NRPM in this area. 

Changes: None. 

General Opposition 

Comments: One commenter stated 

that the Department has not taken into 

account the U.S. Supreme Court’s 2024 

Loper Bright decision, which, according 

to the commenter, eliminated Chevron 

deference and discontinued judges’ 

ability to defer to Federal agency 

interpretations of the statutes they 

enforce. 

Discussion: These regulations do not 

run afoul of Loper Bright. The NPRM 

highlighted our direct statutory 

authority to make the regulatory 

changes, in section V—Authority for 

This Regulatory Action (89 FR 60258), 

and these regulations reflect the best 

reading of the plain text of that 

authority. We also note that, to the 

extent this comment was focused on 

concerns about the proposed changes to 

attendance taking requirements for 

distance education courses or the 

treatment of student aid funds if the 

recipient does not begin attendance at 

the institution, the Department has 

decided to not move forward with those 

proposals at this time. The final 

regulations thus increase the accuracy 

and simplicity of performing R2T4 

calculations for institutions, address 

unique circumstances for what 

constitutes a withdrawal, and codify 

longstanding policies into regulation. 

Changes: None. 

Comments: Some commenters stated 

that the proposed changes to the R2T4 

regulations may lead to stringent and 

inflexible institutional refund policies, 

which could disproportionately affect 

low-income and vulnerable students, 

making it more difficult for them to reenroll and complete their education. 

Discussion: The Department disagrees 

that the regulations will lead to more 

stringent and inflexible institutional 

refund policies that will harm students. 

In fact, the Department’s focus for many 

of the changes was to provide 

flexibilities that would benefit students. 

For example, the Department provided 

flexibility to institutions to consider a 

student who stops attending very early 

in a term as never attending which 

would require the institution to refund 

charges and cancel any balances owed. 

Additionally, the leave of absence 

allowance for eligible prison education 

programs (PEPs) will offer greater 

flexibility to confined or incarcerated 

individuals when they are impacted by 

a situation in the correctional facility 

outside of their control. Lastly, as 

described elsewhere, the Department 

has decided to not finalize the 

requirement for institutions to take 

attendance in distance education 

courses, which was the primary source 

of concern for many commenters. 

Changes: None. 

Comments: Some commenters argued 

that the proposed R2T4 rules could 

force institutions to hire additional staff 

to manage the increased documentation 

and compliance workload and that 

institutional resources will be redirected 

from student support services to 

administration and data collection. 

Discussion: We do not believe that the 

R2T4 regulatory changes will require 

significant institutional staffing changes 

or a redirection of substantial 

institutional resources from student 

services to administrative services. In 

fact, the regulations are designed to 

improve and simplify the process in 

some areas. For example, the changes to 

the R2T4 calculation for modules will 

eliminate the need for institutions to 

consider which types of aid a student 

received to determine the number of 

days in the R2T4 calculation. 

Additionally, the new R2T4 exemption 

for students who are treated as never 

having enrolled will reduce the number 

of R2T4 calculations that are performed 

at some institutions. Finally, we note 

that to the extent the comments were 

addressing potential increased costs to 

implement the proposal requiring 

attendance taking in distance education 

courses, that provision is not being 

finalized. Institutions will thus not face 

any costs related to that provision. 

Changes: The Department is not 

finalizing the proposal for attendance 

taking in distance education courses. 

Comments: One commenter 

recommended that the Department not 

move forward with any of the changes 

and instead exempt any postsecondary 

institution from R2T4 that qualifies for 

Title III or Title V waivers, or if the 

institution is designated as a Minority 

Serving Institution. The commenter 

believes that their proposal would 

provide flexibility to utilize resources 

differently to marginalized populations. 

Discussion: The Department lacks the 

statutory authority to exempt all or a 

subset of postsecondary institutions that 

participate in the title IV, HEA programs 

from the R2T4 requirements. 

Changes: None. 

Comments: One commenter asked 

that the Department delay 

implementation of these regulations 

until 2026 or 2027 to allow institutions 

time to work on internal systems, third 

party vendors, and administrative 

reporting mechanisms, train instructors, 

and make other logistical changes. 

Discussion: The regulations will not 

be effective until July 1, 2026. We 

believe that provides sufficient time to 

make necessary adjustments. 

Changes: None. 

Comments: One commenter stated 

that the proposed changes will disrupt 

the timely delivery of title IV, HEA 

funding to all students. The commenter 

stated that institutions will break up 

disbursements as students’ progress 

through the term to avoid 

overpayments, and that multiple 

disbursements hinder students from 

using their title IV, HEA credit balances 

for educationally related expenses such 

as housing and food, which are benefits 

that are intended to be available to 

students under current regulations. 

Discussion: We appreciate the 

commenter’s concern for students. 

However, nothing in this regulation 

requires an institution to break up a 

disbursement into smaller payments. 

That is simply an allowable option if the 

institution determines it best meets the 

needs of the students. Further, we do 

not believe that these regulations create 

any additional incentive for institutions 

to adopt that approach, primarily 

because the amount of effort needed to 

shift to a multiple disbursement model 

would significantly outweigh the 

increase in burden imposed by these 

regulations. This is especially true 

because, although shifting to such a 


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model might reduce the frequency of 

returns under the R2T4 regulations, it 

will not obviate the need to amend 

R2T4 policies and procedures in 

accordance with these new regulations. 

The regulations will still apply to all 

students who cease attendance during a 

payment period or period of enrollment 

even if a school makes multiple 

disbursements during a payment period. 

Changes: None. 

Comments: One commenter asked for 

the official definition of attendance for 

R2T4 purposes. 

Discussion: For R2T4 purposes, under 

§ 668.22(l)(7), ‘‘academic attendance’’ 

and ‘‘attendance at an academically 

related activity’’ must include 

‘‘academic engagement,’’ as defined in 

§ 600.2. 

Treatment of Title IV Grant and Loan 

Funds if the Recipient Does Not Begin 

Attendance at the Institution (§ 668.21) 

Comments: The Department received 

many comments supporting the 

proposal in § 668.21(a)(2)(ii) to allow a 

student who received a loan 

disbursement as part of a title IV credit 

balance, but never began attendance in 

a payment period or period of 

enrollment, to repay loan funds they 

received under the terms and conditions 

of their promissory note. Many 

commenters agreed the proposed 

changes better recognize the financial 

realities these students face. Several 

commenters noted the proposed rules 

will prevent borrowers from defaulting 

on their debts, as these borrowers often 

cannot pay the full amount owed 

immediately and would face penalties, 

such as negative credit reporting and 

collections. Others noted the proposed 

changes will help students who have 

likely already spent their credit balances 

on things like housing, childcare and 

other necessary expenses and therefore 

cannot make a lump sum payment. 

Others agreed the changes would 

strengthen the borrower’s financial 

health and could have positive 

economic impacts. 

Discussion: We thank the commenters 

for their support. However, as explained 

below, we have decided to not move 

forward with this proposal. 

Changes: None. 

Comments: A few commenters stated 

that the rule will allow abuse because a 

borrower could have their loans 

forgiven under Public Service Loan 

Forgiveness (PSLF) or forgiven as a 

possible result of enrolling in an Income 

Driven Repayment (IDR) plan after 

having never participated in any 

postsecondary coursework. One 

commenter stated that the Department is 

creating a ‘‘perverse incentive’’ that will 

encourage individuals to enroll in a 

program only to receive a credit balance, 

subsequently withdraw, and then allow 

them to pay the loan back over the 

course of many years. 

One of the dissenting commenters 

offered several alternative solutions 

other than eliminating the proposed 

regulation: (1) the Department require 

that postsecondary institutions return 

all of the title IV, HEA funds for a 

period of non-attendance, and (2) 

require a 30-day delay in any 

subsequent disbursements to the 

borrower if the borrower seeks to enroll 

at a different institution. 

Another alternative offered by a 

commenter is for the student to repay, 

upon demand, all funds except those 

already spent on necessary educationrelated expenses, which could be repaid 

under the terms and conditions of the 

promissory note or during a shortened 

yet adequate period of time. 

Discussion: In the Department’s 

experience through interactions with 

institutions and program reviews, 

individuals seeking to abuse the title IV, 

HEA programs overwhelmingly target 

grant programs rather than loan 

programs. However, we do not want to 

create the perception of possible 

loopholes in the Federal aid programs. 

Accordingly, we will not move forward 

with this change at this point. The 

Department will continue to look 

carefully at the individuals who do not 

begin attendance to determine whether 

revisiting this policy in the future may 

be merited. 

Regarding the alternate proposals, we 

believe adding a requirement that a 

postsecondary institution return all of 

the title IV, HEA funds for a period of 

non-attendance by a student is 

unreasonably burdensome. We also 

decline to incorporate a 30-day delay on 

subsequent disbursements to a student 

that sought to reenroll. The Department 

is not making changes to disbursement 

rules with these final regulations. 

Regarding the final alternative offered 

by the commenters, requiring a student 

to immediately repay all funds except 

those already spent on necessary 

education-related expenses, the HEA 

requires that a student spend all of their 

title IV credit balance funds on 

allowable education related expenses. If 

this alternative, as suggested by the 

commenter, were implemented, 

institutions would be obligated to 

document the exact amount of funds a 

student spent, and categorize that 

spending, to determine compliance with 

the requirement. The additional burden 

placed on institutions to determine how 

the title IV, HEA credit balance funds 

were spent would be extensive and 

unreasonable. 

Changes: We have removed the 

proposed changes to § 668.21 to allow 

a student who received a loan 

disbursement as part of a title IV credit 

balance, but never began attendance in 

a payment period or period of 

enrollment, to repay loan funds they 

received under the terms of their 

promissory note. 

Comments: One commenter requested 

that, in light of the new regulatory 

language, the Department update the 

language on the promissory note, which 

currently requires a student to agree to 

immediately repay any loan money that 

is not used for authorized educational 

expenses. The commenter also asked 

how to determine that a student ceased 

to be enrolled half-time if they never 

began attendance. 

That commenter, and others, 

questioned the validity of providing a 

grace period for individuals who do not 

begin attendance, and suggested that the 

students should be required to request 

a forbearance. The commenter believes 

that allowing the borrower to retain 

funds for six months may do the 

borrower harm by encouraging the 

borrower to spend the funds. 

One commenter believes that by not 

attending, the student broke their 

contract with the Department, and 

therefore, the Department should not 

maintain the broken contract through 

the terms of the promissory note. 

Another commenter similarly stated that 

the Department should not allow 

students to borrow without ever having 

attended and that this change could 

reduce resources available to fund other 

students’ educations. 

Discussion: As described above, the 

Department is not moving forward with 

this proposal. However, we note that 

under § 668.164(i)(1), the regulations 

intentionally permit the disbursement of 

loans up to 10 days prior to the start of 

classes to allow students to cover 

necessary education expenses, such as 

housing and books. The Department’s 

longstanding position is that this policy 

is necessary so that students are fully 

prepared for the start of their programs. 

Permitting these disbursements does not 

reduce the amount of funding available 

to fund other students’ educations, 

because the HEA dictates the amount of 

title IV, HEA loan funds available to 

students on an individual basis, without 

a cap on the total amount that can be 

lent across all students, and the amount 

of loans received by one student does 

not affect the amounts a different 

student can receive. 

Changes: We have removed the 

proposed changes to § 668.21 to allow 


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a student who received a loan 

disbursement as part of a title IV credit 

balance, but never began attendance in 

a payment period or period of 

enrollment, to repay loan funds they 

received under the terms of their 

promissory note. 

Comments: One commenter stated 

that institutions must already confirm 

attendance before making loan 

disbursements. 

Discussion: We remind the 

commenter that under § 668.164(i)(1), in 

certain situations, a postsecondary 

institution may be able to make an early 

disbursement of title IV, HEA aid up to 

10 days before the first day of classes of 

a payment period and there would be no 

confirmation of attendance at that time. 

Ultimately, institutions must confirm 

attendance for students to retain 

eligibility for some or all of the title IV, 

HEA funds they received during the 

payment period, but attendance 

confirmation does not have to occur 

prior to this initial disbursement. 

Changes: None. 

Treatment of Title IV Funds When a 

Student Withdraws (§ 668.22) 

Withdrawal Exemption 

(§ 668.22(a)(2)(ii)(A)(6)) 

Comments: Several commenters 

supported the optional withdrawal 

exemption under § 668.22(a)(2)(ii)(A)(6), 

stating that it will reduce administrative 

burden and prevent unnecessary 

financial penalties on students who 

withdraw early. Commenters also stated 

that it will decrease the institutional 

cost and complexity of compliance with 

title IV regulations, and it may also 

encourage institutions to adopt generous 

refund policies which will help 

students maintain financial stability. 

Discussion: We thank the commenters 

for their support. 

Changes: None. 

Comments: One commenter asked 

how a student granted a withdrawal 

exemption be reflected in enrollment 

reporting, particularly regarding 

medical withdrawals. The commenter 

noted that often requests for medical 

withdrawals are granted late in the 

semester or well after the semester is 

over, and this likely means the student 

will already have been reported as being 

in attendance at least half-time. Where 

the school grants the medical 

withdrawal, the commenter sought 

clarification on how this ‘‘nonwithdrawal’’ would be reported to 

NSLDS. 

Discussion: The Department will issue 

guidance regarding the procedure for 

reporting students, who have been 

granted the withdrawal exemption in 

§ 668.22(a)(2)(ii)(A)(6), to NSLDS as part 

of enrollment reporting. We will 

provide guidance on reporting statuses, 

reporting requirements, and any 

applicable dates (such as grace period 

dates) following the publication of these 

regulations. 

Please note that, for institutions that 

utilize the withdrawal exemption, 

borrowers will be treated as having 

never attended and the grace period will 

begin the day after the last date of 

attendance in the prior payment period. 

Changes: None. 

Comments: One commenter stated 

that many community colleges cannot 

afford to implement the optional 

withdrawal exemption. The commenter 

offered several examples, including that 

most community colleges do not offer 

housing and have low tuition; therefore, 

many students receive larger title IV, 

HEA credit balances. The commenter 

stated that a community college would 

not be able to write off large amounts for 

multiple students. 

Discussion: We reiterate that the 

withdrawal exemption is optional. This 

will permit institutions that wish to 

maintain or create generous tuition 

refund policies to be exempt from 

performing an R2T4 calculation in cases 

where students are made financially 

whole after withdrawing. Use of these 

generous tuition refund policies will be 

at the discretion of the institution. The 

Department hopes that the reduced 

burden resulting from this exemption 

from the R2T4 process encourages 

institutions to maintain or create these 

policies for their students. 

Changes: None. 

Comments: One commenter asked 

whether the optional withdrawal 

exemption could be applied on a caseby-case basis or whether institutions 

that choose to implement the 

withdrawal exemption must apply it to 

all students who withdraw. The 

commenter also expressed concern 

about the requirement that ‘‘the 

institution’s records treat a student as 

having never attended courses for that 

payment period or period of 

enrollment.’’ The commenter stated that 

their institution wants to retain a record 

of course attendance to justify title IV, 

HEA disbursements that were made 

during the payment period or period of 

enrollment. 

Discussion: Institutions can 

implement the withdrawal exemption 

on a case-by-case basis according to the 

institution’s policy. We agree with the 

commenter that an institution must 

keep a record of a student’s eligibility to 

receive title IV, HEA funds. 

Additionally, the institution must 

document the use of the withdrawal 

exemption for a particular student. The 

regulations do not require an institution 

to eliminate all record of a student’s 

attendance for a payment period in 

which they qualify for this exemption. 

Instead, they require the institution to 

document that the institution’s policies 

treat the student similarly to other 

students who did not attend, for 

example with regard to satisfactory 

academic progress or grading policies. 

Changes: None. 

Comments: A few commenters 

recommended that under paragraph 

§ 668.22(a)(2)(ii)(A)(6)(iv) the 

Department change ‘‘current year’’ to 

‘‘payment period.’’ The commenters 

noted that paragraphs (i)–(iii) of the 

withdrawal exemption are tied to the 

payment period or period of enrollment, 

while provision (iv) is not. 

Discussion: The Department is 

persuaded by the commenters’ argument 

that the various subsections should 

contain identical language since that 

was the intended purpose of the 

regulatory change. 

Changes: We have updated 

§ 668.22(a)(2)(ii)(A)(6)(iv) to replace 

‘‘any current year balance’’ with ‘‘any 

payment period or period of enrollment 

balance’’ owed by the student to the 

institution due to the institution’s 

returning of title IV, HEA funds to the 

Department. 

Comments: One commenter requested 

that the regulation define institutional 

charges as exclusive of institutional 

housing and meals based on a direct 

proration of use for the payment period. 

The commenter stated that while tuition 

refund policies are under the 

institution’s purview, additional charges 

for the use of services such as housing 

are considered auxiliary and not at the 

discretion of the central campus to limit 

or control. Further, it places students 

who live in institutionally owned 

housing at a disadvantage as compared 

to students who may rent from a private 

third party. Though both are incurring 

living costs, the latter would be 

permitted the flexibility, assuming the 

campus reverses or writes off all other 

institutional charges, whereas the 

former would require an R2T4 

calculation resulting in an outstanding 

debt. 

Discussion: We decline to take the 

commenter’s suggestion. We 

acknowledge that students with 

institutionally provided food and 

housing may be treated differently from 

students with non-institutionally 

provided food and housing. Students 

without institutionally provided 

housing and food are more likely to 

have larger credit balances, which will 

make this a more challenging 


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requirement for some institutions, since 

the provision in (iv) requires that the 

institution not recoup or collect any title 

IV, HEA funds returned to the 

Department due to the implementation 

of this exemption. This exemption is an 

optional exemption to be used by 

institutions when they determine it is 

advantageous to do so. Further, we 

believe the commenter may have 

misinterpreted the optional withdrawal 

exemption. An R2T4 calculation is not 

required if the exemption is applied, 

since all title IV, HEA funds are 

returned in that instance. 

We will amend the proposed 

regulation to clarify that this 

requirement includes title IV, HEA 

funds that were provided to the student 

or parent, that were disbursed for that 

payment period or period of enrollment. 

Changes: We amended 

§ 668.22(a)(2)(ii)(A)(6)(ii) to state that 

‘‘The institution returns all the title IV 

grant or loan assistance, including all 

title IV credit balances provided to the 

student or parent, that were disbursed 

for that payment period or period of 

enrollment.’’ 

Comments: One commenter asked the 

Department to extend the current 

withdrawal exemption for graduates/ 

completers to students that are not 

enrolled in programs offered in 

modules. 

Discussion: Currently a student meets 

the withdrawal exemption for 

graduates/completers in 

§ 668.22(a)(2)(ii)(A)(1) if they complete 

all of the academic requirements for 

their program and are able to graduate 

before completing all of the days or 

clock hours in the period they were 

scheduled to complete. This withdrawal 

exemption can apply to any type of 

program, including those with or 

without modules. Since the exemption 

that the commenter suggests already 

applies to non-modular programs, the 

Department declines the proposed 

revision as unnecessary. 

Changes: None. 

Comments: One commenter stated 

that R2T4 calculations are for students 

who officially or unofficially fully 

withdraw. The commenter asserted that, 

if the student does not begin attendance, 

their aid must be cancelled for that 

course. 

Discussion: It appears the commenter 

is not differentiating between students 

who may be eligible for the exemption 

described in § 668.22(a)(6) and are 

treated as if they never enrolled versus 

students who never begin attendance in 

any class (§ 668.21). We remind the 

commenter that § 668.22(a)(6) is an 

exemption from performing an R2T4 

calculation that would otherwise apply. 

By contrast, § 668.21 addresses the 

situation where a student never actually 

begins attendance in any class, which 

would not require an R2T4 calculation. 

Changes: None. 

Comments: One commenter asked 

that the Department confirm that the 

withdrawal exemption in § 668.22(a)(6) 

is optional. 

Discussion: The withdrawal 

exemption in § 668.22(a)(6) is optional 

and applies to all types of programs, 

including those with or without 

modules. 

Changes: None. 

Determination of Withdrawal Status 

(§ 668.22(b)(2)) 

Comments: Several commenters 

expressed general support for the 

Department’s proposals to establish 

more timely and accurate data to 

complete R2T4 calculations, but most 

had reservations regarding certain 

elements of the proposed requirements. 

One specific commenter indicated that 

the proposed regulation aligned with 

their current process. 

Discussion: We thank the commenters 

for their support and address their 

specific reservations in the discussions 

below. 

Changes: None. 

Comments: Many commenters 

opposed the provision that requires an 

institution that is required to take 

attendance to document the student’s 

withdrawal date within 14 days of a 

student’s last date of attendance. Many 

commenters suggested longer time 

frames, with several suggesting a 28-day 

period as a maximum timeframe in 

which to officially determine that a 

student who has not attended for some 

time is, in fact, a withdrawn student. 

This opposition included one 

commenter who believed that the 

Department’s primary motivation for 

this regulatory requirement was to 

prevent students from ‘‘cheating the 

system.’’ Other commenters interpreted 

the proposed provision to mean that a 

postsecondary institution must 

administratively withdraw a student 

after 14 days of nonattendance. 

Discussion: We disagree with the 

commenter who stated that the 

provision was intended to prevent 

students from cheating the system. The 

primary motivation of this regulatory 

provision is to ensure timelier and more 

accurate R2T4 calculations. Further, as 

set forth in longstanding guidance, the 

Department does not require an 

institution to administratively withdraw 

a student on the 14th day, but to 

establish the date of determination for 

purposes of the R2T4 calculation. The 

institution then has an additional 45 

days before any calculated return must 

be made to determine whether the 

student continues with his/her 

enrollment. If the student does return 

within the 45-day timeframe, then no 

further action is required. This 14-day 

time frame only applies to institutions 

required to take attendance under 

current § 668.22(b)(3). 

Changes: None. 

Comments: Several commenters 

opined that the Department is 

redefining the definition of distance 

education in § 600.2 by applying a de 

facto 14-day timeframe to regular and 

substantive interaction. Some 

commenters pointed out that the 

Department agreed in the preamble to 

the 2020 Distance Education and 

Innovation Final Rule 28 that a 

timeframe should not be mandated for 

regular and substantive interaction. 

Discussion: We disagree with the 

commenters. The regulatory change in 

§ 668.22(b)(2) establishes a regulatory 

timeframe to document a student’s 

withdrawal status for R2T4 purposes. 

The timeframe for assessing a student’s 

status, and for determining that the 

student has withdrawn, does not impose 

any timeframe for regular and 

substantive interaction. As noted in the 

Summary of the Major Provisions of this 

Regulatory Action, the Department is 

simply codifying into regulation what 

has been our guidance for institutions 

required to take attendance since the 

2005–06 award year. The requirement 

also applies to all students for whom the 

institution is required to take 

attendance, which could include on 

campus students that are not subject to 

the definition of distance education. 

Changes: None. 

Comments: Several commenters were 

concerned that the requirement to 

determine a student’s withdrawal status 

within a set timeframe could negatively 

impact students who accelerate within 

their program by working ahead in one 

or more individual courses. The 

commenters were concerned that they 

might have to administratively 

withdraw a student who had 14 days of 

inactivity due to course acceleration. 

One commenter asked if this regulation 

eliminated the option for a student to 

accelerate in their coursework. 

Discussion: As noted above, an 

institution is required to document its 

determination of a student’s withdrawal 

within 14 days of the student’s last date 

of attendance for purposes of the R2T4 

calculation; however, the institution is 

not required to administratively 


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knowledge-center/fsa-handbook. 

withdraw the student on that date and 

has an additional 45 days before it has 

to pay any return resulting from the 

withdrawal. It is unlikely that students 

who accelerate work will not resume 

activity within this time frame. Further, 

this additional time before payment 

provides ample opportunity for the 

institution to reach out to the student to 

ensure they plan to remain enrolled and 

to ensure the student continues 

academic engagement. 

Where a student is enrolled in 

multiple courses in a program and has 

accelerated in one or more courses, the 

student will not be considered 

withdrawn as long as the institution has 

determined that the student is still 

attending coursework for that payment 

period or period of enrollment. The 

requirement to determine a withdrawal 

date for a student is when that student 

has completely withdrawn from the 

institution or otherwise stopped 

attending all coursework. Nothing in 

this regulatory provision eliminates an 

acceleration option for students. 

Changes: None. 

Comments: A few commenters asked 

if it is the Department’s expectation that 

institutions will begin documenting all 

exceptions granted by individual faculty 

members to students if the exception 

allows for a temporary cessation of 

academic activity for a period that 

exceeds 14 days. In addition, 

commenters provided examples of 

extreme flexibility with student 

coursework without stating whether the 

programs were term based or nonterm 

based. In some of the examples, it 

appeared that nonterm flexibilities were 

being used in term-based academic 

calendars. 

Discussion: For R2T4 purposes, the 

treatment of exceptions granted to 

students by individual faculty members 

depends on whether the exception is 

applied to all of the program’s 

coursework in a payment period being 

pursued by the student or only applied 

to a portion of the student’s coursework 

in a payment period. If the student has 

an exceptional situation that requires a 

complete cessation of all coursework in 

a payment period, the student will be 

withdrawn unless the institution grants 

an approved leave of absence. However, 

if the exceptional situation extends to 

only a portion of the student’s 

coursework in a payment period, and 

the institution assesses that the student 

is still attending coursework in the 

payment period or period of enrollment, 

there is no requirement for the 

institution to withdraw the student at 

that time. In addition, nothing in this 

final regulation infringes on the 

institution’s discretion under existing 

policies and procedures to provide 

grades of incomplete to students when 

the institution determines that it is 

appropriate. Some of the commenters 

described existing situations that 

appeared to be extremely flexible 

without stating whether the programs 

being described were term-based or 

nonterm based. We remind the 

commenters that the use of a term-based 

academic calendar, standard or 

nonstandard, may limit coursework 

flexibility in ways that a nonterm 

calendar does not, because an academic 

term has a defined end date. 

Changes: None. 

Comments: Many commenters were 

concerned that an administrative 

withdrawal after 14 days of inactivity 

would not serve students enrolled in 

short nonstandard terms (e.g., 5, 6, or 8 

weeks) or modules of a similar length 

that are part of a standard term. The 

commenters stated that the 14-day 

requirement appears to have the historic 

quarter or semester terms in mind. For 

periods of time that are less than 

standard terms, the commenters argued 

that 14 days is too long, and a shorter, 

proportional amount of time would be 

more appropriate. 

Discussion: We disagree with the 

commenters. The commenters’ concern 

appears to be based on the incorrect 

assumption that, under the regulations, 

an institution cannot administratively 

withdraw a student until after 14 days 

of nonattendance; however, nothing 

prohibits an institution from identifying 

a withdrawn student earlier than 14 

days after the last date of attendance. 

Changes: None. 

Comments: Several commenters 

wondered if the 14-day timeframe in 

§ 668.22(b)(2) includes calendar days, 

weekdays, holiday/spring breaks, singleday college or university holidays, or 

snow (or other emergency) days. 

Discussion: The 14-day date of 

determination timeframe, which has 

been added to § 668.22(b)(2), counts all 

calendar days regardless if they are 

weekend days, holidays, or other 

scheduled breaks. For days that are 

associated with emergencies or 

disasters, institutions should refer to the 

guidance in Dear Colleague Letter GEN 

17–08, Guidance for Helping Title IV 

Participants Affected by a Major 

Disaster. 

Changes: None. 

Comments: A few commenters asked 

what documentation is required for an 

approved leave of absence. 

Discussion: The Department does not 

specify what documentation must be 

gathered to support an approved leave 

of absence at the institutional level. For 

a complete listing of the procedures and 

necessary information for a leave of 

absence to be approved for title IV, HEA 

purposes, please see the requirements in 

§ 668.22(d), which are further explained 

in the FSA Handbook, Volume 5.29

Changes: None. 

Comments: One commenter was 

concerned with how to deal with a 

student who was withdrawn for failing 

to engage in academic activity for 14 

days and then sought reinstatement at 

some point following the withdrawal 

but within the same payment period. 

The commenter observed that these 

students often successfully complete the 

course following the reinstatement. The 

commenter believed that it is unclear 

from the proposed regulatory language 

whether reinstatement practices would 

be permissible moving forward, noting 

that it would be detrimental to students 

if they were prohibited from being 

reinstated. 

Discussion: As we have outlined 

above, the institution has up to 14 days 

after the student’s last date of 

attendance to document the student’s 

withdrawal date, not necessarily to 

administratively withdraw the student, 

since the institution has time to 

determine a student’s enrollment or 

withdrawal status. The institution 

ultimately must ensure that the R2T4 

calculation be completed no later than 

30 days following the date of 

determination and any funds be 

returned to the Department no later than 

45 days following the date of 

determination. 

If the institution must ultimately 

withdraw the student, there is nothing 

in this final regulation prohibiting the 

student from being reinstated according 

to the institution’s reinstatement 

policies and procedures. We remind 

commenters that guidance regarding 

student reinstatements and the ability to 

undo an R2T4 can be found in the FSA 

Handbook Volume 5.30

Changes: None. 

Comments: Several commenters were 

concerned about students who may be 

in academic activities that, by design, 

do not include regular interaction 

between the student and instructor for 

more than 14 days. Commenters offered 

an example of instructors evaluating 

students’ field work in the community 

through authentic assessment. 

Commenters requested clarification 

about the institutional requirements 

under § 668.22(b)(2) in these types of 

situations. 

Discussion: Section 668.22(b)(2) 

requires an institution to document 


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whether a student should be withdrawn 

no later than 14 days after the student’s 

last date of attendance. As we have 

stated, this is not a requirement that a 

student be withdrawn after 14 days of 

nonattendance. An institution must still 

comply with § 668.22(b)(2), even if it 

has chosen a method of academic 

engagement that, by design, creates 

periods where student activity is not 

being monitored/tracked at least every 

14 days. Institutions might reach out to 

student in a variety of ways including, 

but not limited to, using text messages, 

emails, and telephone calls. 

Changes: None. 

Comment: One commenter believed 

that the Department did not have the 

authority to require that institutions 

determine a student’s withdrawal status 

no later than 14 days after the last date 

of attendance (LDA) (§ 668.22(b)(2)). 

The commenter generally cited to the 

caselaw and factors that courts apply 

when assessing agency action, including 

that an agency must demonstrate that it 

has examined relevant data and 

articulated a satisfactory explanation for 

its action, and that an agency action is 

arbitrary and capricious if the agency 

fails to consider an important aspect of 

a problem or offers an explanation that 

runs counter to the evidence before the 

agency. The commenter did not specify 

how it thought the Department failed to 

satisfy this standard. 

Discussion: Congress provided the 

general framework for title IV returns in 

20 U.S.C. 1091b, and the Department is 

tasked with implementing those 

provisions. Among those provisions is 

the requirement that an institution 

‘‘return no later than 45 days from the 

determination of withdrawal’’ the 

amount of unearned title IV funds 

disbursed to the student. 20 U.S.C. 

1091b(b). Congress goes on to provide 

how that withdrawal date should be 

determined. 20 U.S.C. 1091b(c). The 

codification of the Department’s 

longstanding guidance, for institutions 

that are required to take attendance, that 

the institution must determine the 

withdrawal date no later than 14 days 

after a student’s last date of attendance, 

represents the Department’s mechanism 

for ensuring that institutions meet the 

45-day refund deadline set forth in the 

statute. With respect to the remaining 

arguments raised in the comment, the 

Department provided a detailed 

explanation in the NPRM (89 FR 60264) 

of the reasons for the provision. 

Changes: None. 

Attendance Taking in Distance 

Education Courses (§ 668.22(b)(3)(ii)) 

Comments: Several commenters 

agreed with the proposed requirement 

that an institution take attendance for 

each course offered entirely through 

distance education, except for 

dissertation research courses that are 

part of a doctoral program. Comments of 

support include: 

• The state of technology and 

learning management systems in online 

education allows for attendance to be 

taken; 

• The rule reinforces the importance 

of providing regular and substantive 

interactions between students and 

faculty in online coursework; 

• This regulation addresses 

longstanding inaccuracies in tracking 

withdrawals; 

• The rule is an important backstop 

for vulnerable students who have been 

preyed upon by predatory schools; 

• It will be more difficult for 

institutions to not properly perform 

R2T4 calculations for distance 

education students who withdraw and 

help ensure that borrowers have the 

documents necessary to prove their 

eligibility where they seek a loan 

discharge due to the institution not 

returning Direct Loan funds as required. 

Discussion: The Department thanks 

the commenters for their support. As 

discussed further below, however, in 

this final regulation we will not be 

finalizing the proposal in 

§ 668.22(b)(3)(ii) to require attendance 

taking in distance education courses. 

Changes: None. 

Comments: Several commenters 

opposed this provision. Objections 

included that the Department lacked 

legal authority to adopt the provision; 

the Department failed to provide data to 

support the change; that the provision 

would increase costs, take instructors 

away from teaching, and inhibit 

academic freedom; and that it would be 

difficult to implement for students 

taking asynchronous courses or those 

enrolled in competency-based programs. 

Commenters were worried about how 

the provision would be implemented 

and requested guidance on various 

aspects of the provision. 

Discussion: The Department is 

statutorily required to ensure the proper 

return of title IV HEA funds when a 

student withdraws before completing a 

payment period or period of enrollment. 

Attendance taking is specifically 

provided for in the statute and is crucial 

for the Department to carry out its 

statutory responsibilities. We remain 

concerned about ensuring that 

withdrawals are properly tracked in a 

fully online environment, where we 

have observed that institutions have 

greater tools available to them for 

tracking student engagement than exist 

when offering in-person classes. An 

accurate withdrawal date is critical to 

ensure that the right amount of 

unearned title IV aid is returned, and 

students’ accounts are properly reduced. 

However, we are persuaded by concerns 

about the need for continued 

development in these tools to make 

them consistently effective for this 

purpose, including the need for system 

interoperability. As such, we will not be 

finalizing this provision to provide more 

time to evaluate technological changes 

that can better track student 

engagement. The Department will 

continue to monitor the state of this 

tracking and may revisit this issue at a 

later date. In the meantime, we remind 

institutions of their obligation to retain 

adequate documentation to support 

their R2T4 calculations when students 

withdraw, and we encourage 

institutions to continue enhancing their 

systems to capture accurate student 

engagement for the purposes of 

determining if students are continuing 

enrollment at the institution. 

Changes: The Department removes 

the provision under § 668.22(b)(3)(ii) for 

required attendance taking in distance 

education courses. 

Leave of Absence (§ 668.22(d)(1)(vii)) 

Comments: Several commenters 

supported the leave of absence 

provision in § 668.22(d)(1)(vii) that 

provides additional flexibility for 

students enrolled in eligible prison 

education programs and stated that that 

it will reduce barriers to reenrollment 

and college completion for students 

who are faced with withdrawals during 

their studies. 

Discussion: We agree with the 

commenters and thank them for their 

support. 

Changes: None. 

Comments: One commenter opposed 

the leave of absence provision. The 

commenter stated that their institution 

participates in the Second Chance Pell 

experiment under the Experimental 

Sites Initiative 31 and stated that the 

provision will create administrative 

burden and add more complexity. The 

commenter stated that if an institution 

offers a leave of absence, the confined 

or incarcerated student still may not be 

able to return within 180 days and 

would therefore need to be withdrawn 

in any event under the normal 

requirements for approved leaves of 

absence. 

Discussion: We remind the 

commenter that § 668.22(d)(1)(vii) does 

not require an institution to grant a 

leave of absence to the confined or 


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488 Federal Register / Vol. 90, No. 2 / Friday, January 3, 2025 / Rules and Regulations 

32NPRM—https://www.federalregister.gov/ 

documents/2024/07/24/2024-16102/programintegrity-and-institutional-quality-distanceeducation-return-of-title-iv-hea-funds-and. 

33 Issue Paper 4—https://www.ed.gov/sites/ed/ 

files/policy/highered/reg/hearulemaking/2023/ 

program-integrity-and-institutional-quality-session1-issue-paper-r2t4-final.pdf. 

34For discussion of the ‘‘freeze date,’’ see 89 FR 

60265; https://www.federalregister.gov/documents/ 

2024/07/24/2024-16102/program-integrity-andinstitutional-quality-distance-education-return-oftitle-iv-hea-funds-and. 

incarcerated individual. If the 

institution determines that a leave of 

absence would not be appropriate, it 

may take a more immediate approach, 

including an administrative withdrawal. 

Changes: None. 

Comments: One commenter stated 

that involuntary transfers of confined or 

incarcerated individuals often happen 

with no warning, giving those students 

no opportunity to request a leave of 

absence in advance. Since leaves of 

absence are often granted on the 

reasonable expectation that the student 

will return, this makes it unlikely that 

many requests will be approved by the 

educational institution. For this and 

other reasons, the commenter suggested 

that the Department allow for an 

exemption to R2T4 for confined or 

incarcerated students that experience 

involuntary transfers to another facility 

that result in an interruption to their 

programs. 

Discussion: The Department 

acknowledges that the leave of absence 

provision may not be able to be utilized 

by all confined or incarcerated students 

who need it. However, for those who 

meet the requirements for such leave, 

the regulation will provide additional 

flexibility for them to resume their 

academic program at any point upon 

their return from the leave of absence. 

During negotiated rulemaking, the 

Department initially discussed a 

proposal to exempt confined or 

incarcerated individuals from R2T4 if 

the students withdrew from a program 

due to circumstances outside of their 

control, such as a correctional facilitywide lockdown or an involuntary 

transfer to a different facility. Upon 

further review, we determined that we 

do not have the legal authority to waive 

R2T4 requirements for a targeted group 

of students. In addition to our lack of 

legal authority, the Department heard 

concerns from several negotiators 

opposed to such an exemption. They 

pointed out that such an exemption may 

cause confined or incarcerated 

individuals to reach their Pell grant 

lifetime eligibility used (LEU) threshold 

faster, without obtaining academic 

credit. Also, the Department heard from 

negotiators that some postsecondary 

institutions have already established 

policies that account for involuntary 

breaks in prison education programs, 

such as waiving all charges related to 

the affected payment period, and an 

exemption might cause institutions to 

revise or remove beneficial student 

policies already in place. We thus 

decline the commenter’s suggestion to 

include an exemption to R2T4 for 

confined or incarcerated students in 

these regulations. 

Changes: None. 

Comments: One commenter stated 

that students in community colleges 

often work, have families and 

unexpected events are likely to occur, 

and therefore they may not be able to 

request a leave of absence in advance. 

Discussion: The Department believes 

the commenter may have misinterpreted 

the proposed revisions to 

§ 668.22(d)(1)(vii). The only change to 

this provision is that a confined or 

incarcerated individual, in a term-based 

setting, will not have to come back from 

a leave of absence and resume where the 

student left off, and instead, the 

individual will be allowed to return at 

a different point in their prison 

education program. No other leave of 

absence provisions in this regulation 

were modified. 

Changes: None. 

Clock-Hour Programs (§ 668.22(f)(1)(ii)) 

Comments: One commenter disagreed 

with the Department’s proposal to 

streamline and make consistent an 

institution’s calculation of the 

percentage of the payment period 

completed for a clock-hour program. 

The commenter requested that the 

Department retain the current regulatory 

language that allows for two distinct 

methodologies: the cumulative method 

and the payment period method.32

Discussion: The Department declines 

to adopt the commenter’s suggestion. 

We have observed that many times, 

when an institution uses the cumulative 

method, the percentage of funds earned 

by the institution is much larger than 

the time the student actually attended. 

This results in a much smaller return of 

title IV, HEA funds, which ultimately 

hurts a student who had to withdraw 

from a program. Less money returned to 

the Department means the student has 

used more of their lifetime Pell 

eligibility and allowable loan amounts 

without successfully completing 

coursework, see the example in Issue 

Paper 4: Withdrawals and Return of 

Title IV Funds,33 and the Department 

does not believe this is a desirable 

result. 

Because we determined that the 

payment period method leads to more 

accurate R2T4 calculations because it 

better aligns the R2T4 regulations with 

the regulatory definition of a clock-hour 

payment period under § 668.4(c), and 

promotes consistency across all 

calculations, the Department chose in 

§ 668.22(f)(1)(ii) to standardize how 

institutions determine the percentage of 

the payment period completed for a 

clock-hour program by using only the 

payment period method. Providing a 

single more accurate and consistent way 

to calculate the percentage of the 

payment period completed will simplify 

R2T4 policy, reduce complexity and 

confusion, ensure that students are 

treated consistently, and eliminate an 

area of potential abuse. 

Changes: None. 

Modules (§ 668.22(l)(9)) 

Comments: Several commenters 

supported the provision in § 668.22(l)(9) 

to consider a module part of the 

payment period used in the 

denominator of the R2T4 calculation 

only when a student begins attendance 

in the module. Commenters believed 

that the change simplifies the R2T4 

calculation, reduces burden, and 

minimizes errors. A few commenters 

were also pleased that this change 

eliminates the complexity of the ‘‘freeze 

date’’ 34 policy. One commenter 

requested that the Department early 

implement this change. 

Discussion: We thank the commenters 

for their support. Any regulations 

eligible for early implementation are 

listed in the Implementation Date of 

These Regulations section of these final 

regulations. 

Changes: None. 

Comments: Several commenters 

stated that the change in how modules 

factor into the R2T4 calculation in 

§ 668.22(l)(9) will make it easier for 

students to obtain and institutions to 

retain large amounts of student loans 

through minimal participation, which 

will result in a gaming of the system. 

Commenters stated that the change 

could artificially increase the 

‘‘percentage earned’’ component of the 

R2T4 calculation, resulting in student 

over-borrowing and excessive student 

loan burdens. 

Some commenters provided examples 

to support their claims: 

• If a student successfully completes 

a module, but fails to begin attendance 

in the second module, the R2T4 

calculation will result in 100% of aid 

earned; and 

• If a student withdraws during the 

first module and does not attend the 

second module, the denominator is only 

the days contained in the first module. 


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35Federal Student Aid Handbook—https://

fsapartners.ed.gov/knowledge-center/fsa-handbook/ 

2024-2025/vol5. 

The student attends 5 weeks (35 days) 

of the first 8-week module (56 days). 

The fraction 35/56 translates to 62.5%. 

As this is greater than 60%, the student 

is considered to have earned 100% of 

the Title IV aid for the full 16-week 

term. 

The commenters provided several 

alternatives to the Department’s 

proposal, including: (1) prohibiting 

institutions from making subsequent 

disbursements to students in modules 

within the same payment period if the 

student does not attend the module; (2) 

including in the R2T4 calculation 

denominator the days for all modules 

for which the student began attendance, 

and all modules the student did not 

attend in which the student enrolled 

before the date of withdrawal and did 

not withdraw before the date of 

withdrawal; or (3) rescinding the 

proposed regulation. 

Discussion: We disagree with the 

commenters that the change will result 

in a gaming of title IV, HEA aid. We 

acknowledge that, in the examples 

shared by the commenters, this change 

will produce outcomes that may prove 

more beneficial to students than our 

current requirements. However, we 

believe the reduction in administrative 

burden created by this regulatory 

change will more than outweigh the 

potential for students to receive more 

Federal student aid than they would 

have under the previous requirements. 

We note that students enrolled in 

modular programs still are required to 

comply with title IV requirements that 

are not impacted by this regulatory 

change, such as mandatory Pell 

recalculations. For a more detailed 

discussion on the R2T4 process, please 

refer to Volume 5 of the 2024–25 

Federal Student Aid Handbook.35 We 

plan to release guidance to help 

institutions understand and implement 

these changes. 

We remind institutions that it is 

possible for an institution to break up 

title IV, HEA disbursements into smaller 

increments (by module, for example) to 

best meet the needs of the student, as 

long as the disbursement practices do 

not violate § 668.16(s). In breaking up 

title IV, HEA disbursements into smaller 

increments, a student may not be 

eligible for a future disbursement for a 

module that the student did not attend 

because the student did not successfully 

complete the period for which the loan 

was intended. In such situations, the 

concerns raised by the commenter about 

excessive awarding of aid relative to 

time spent attending would not occur. 

We appreciate the commenters’ 

alternative suggestions. We decline the 

first suggestion, because while these 

regulations modify how modules factor 

into the R2T4 calculation, the 

rulemaking did not extend to changing 

the manner in which title IV, HEA aid 

is disbursed within a payment period or 

period of enrollment. We decline the 

second suggested alternative, because it 

appears to restate existing requirements, 

which these final regulations seek to 

simplify. Finally, for all of the reasons 

set forth in the NPRM and in this 

preamble, see, e.g., 89 FR 60256, we 

have determined this new provision is 

appropriate and improves 

administration of the title IV, HEA 

programs, and we thus decline to 

rescind it. 

Changes: None. 

5. Federal TRIO Programs (§§ 643.3, 

644.3, 645.3, 646.3, 647.3) 

General Support and Requests for 

Expansion 

Comments: Many commenters 

supported the proposed amendments to 

the TRIO regulations, and a group of 

commenters stated that there is 

substantial and enthusiastic support to 

expand eligibility among TRIO 

counselors and practitioners. These 

commenters believe that the proposed 

expansion of eligibility would help 

certain noncitizen students included 

within that proposed definition to 

access vital educational services, close 

the achievement gap, and promote 

equity in education. 

However, the Department received 

additional, vocal feedback from several 

commenters who repeatedly 

emphasized that it is important that all 

students, notwithstanding their 

immigration status, have equitable 

access to education. Additionally, many 

commenters advocated for the 

Department to expand student eligibility 

across all TRIO programs, and not just 

those three TRIO programs included 

within the Department’s proposed rule. 

These commenters note the importance 

of providing students with support 

while in college to increase the 

students’ chances of graduating and 

gaining the skills necessary to be 

successful in the workforce, support 

which can be more directly provided by 

the SSS and McNair programs. Several 

of these commenters also argued that 

including the SSS and McNair programs 

would help undocumented students 

receive the support and services 

necessary to be successful in college and 

motivate more of these students to 

pursue graduate education. Still other 

commenters provided suggested 

language for modifying the proposed 

regulatory changes to include other 

noncitizens who have previously 

attended high school in the U.S., 

territories, or Freely Associated States. 

Furthermore, the Department received 

feedback noting that there is no 

statutory restriction that requires TRIO 

providers to offer services only to 

students who are citizens, and that the 

HEA makes no mention of such a 

prohibition for the TRIO programs. 

Discussion: We thank the commenters 

for their support. As these commenters 

have pointed out, many noncitizens 

(including undocumented students) 

would greatly benefit from TRIO 

services based on their status as a 

disadvantaged group facing challenges 

in postsecondary enrollment and 

completion. We are persuaded by 

commenters that the proposed 

expansion of student eligibility for TRIO 

programs under the NPRM, which was 

focused on noncitizen students enrolled 

or seeking to enroll in a high school 

under TS, UB and EOC, was too narrow 

both in scope of additional populations 

to be served, as well as in its omission 

of the SSS and McNair programs. We 

agree with those commenters who noted 

that the HEA does not limit 

participation in the TRIO programs 

based on immigration status and find 

that the proposed rule was restrictive in 

its continued consideration of 

immigration status as a barrier to 

participation in the TRIO programs. We 

are also persuaded that an expansion of 

student eligibility under only certain 

TRIO programs would create confusion, 

as many grantees administer grants 

under more than one TRIO program. 

Additionally, expanding student 

eligibility for only certain TRIO 

programs would increase administrative 

burden by requiring grantees to deny 

similarly situated noncitizens from 

participating under certain TRIO 

programs, but not others. 

As the TRIO programs provide a 

pipeline of services for eligible 

participants, we believe it would 

frustrate the purpose of the TS, UB and 

EOC programs to not provide (at 

minimum) a correlating extension of 

student eligibility under the SSS and 

McNair programs. However, as noted 

above, the Department now recognizes 

that the proposed rule’s focus on 

‘‘disadvantaged students who have 

enrolled or seek to enroll in a high 

school in the United States, territories, 

or Freely Associated States’’ would 

continue to perpetuate consideration of 

immigration status as a barrier to 

participation in the TRIO programs in a 


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manner that is not supported by the text 

of the HEA itself. For the foregoing 

reasons, the Department has decided not 

to finalize the Federal TRIO provisions, 

to reconsider how best to ensure that the 

TRIO programs are able to reach all 

populations of disadvantaged students, 

irrespective of immigration status. 

Changes: The Department is not 

finalizing the TRIO provisions except 

for the technical change mentioned 

above and may reconsider TRIO student 

eligibility through future rulemaking 

efforts. 

Comments: Two commenters were 

supportive of the changes but were 

concerned that expanding eligibility 

could bring some political tension and 

put TRIO’s funding in jeopardy. 

Discussion: The TRIO programs have 

been around for over 60 years, making 

these programs one of the oldest grant 

programs authorized under the HEA. 

These programs continue to exist 

because they are still needed and must 

continue to evolve to meet the needs of 

those students that the Secretary 

identifies as disadvantaged in 

postsecondary access and attainment. 

We are confident that these programs 

will continue to serve students and 

adapt to serve new groups of qualified 

individuals from disadvantaged 

backgrounds. 

Changes: The Department removes 

the TRIO provisions except for the 

technical change mentioned above and 

may reconsider TRIO student eligibility 

through future rulemaking efforts. 

Requests To Remove the Proposed 

Prohibition on Direct Cash Stipends in 

the Upward Bound Program 

Comments: A few commenters were 

disappointed that the NPRM limited the 

availability of cash stipends to UB 

participants by immigration status, 

noting that the limitation would run 

counter to the Department’s stated goal 

of expanding access to higher education. 

Another commenter noted that these 

restrictions would place a burden on 

program administrators to track 

differences in eligibility among students 

within the program and create privacy 

concerns for students as they disclose 

their legal status to determine eligibility 

for the stipend. 

Discussion: As noted in the proposed 

rule, PRWORA prohibits ‘‘Federal 

public benefits’’ from being awarded to 

persons who are not able to demonstrate 

certain types of eligible noncitizen 

statuses as a ‘‘qualified alien’’ under 8 

U.S.C. 1641(b). The general definition of 

a ‘‘federal public benefit’’ is provided 

under U.S.C. 1611(c)(1). Federal 

agencies are generally responsible for 

identifying which of their programs 

provide Federal public benefits. The 

Department stated its determination 

within the NPRM that the direct cash 

stipends provided under the UB 

program likely represent a ‘‘similar 

benefit’’ to those enumerated benefits 

under 8 U.S.C. 1611(c)(1)(B) for which, 

where payment is provided to an 

‘‘individual, household, or family 

eligibility unit[,]’’ falls under the 

restrictions of PRWORA. Therefore, 

while the Department is not finalizing 

this provision, compliance for PRWORA 

restrictions operates independent of 

these rulemaking efforts. 

Changes: The Department is not 

finalizing the TRIO provisions and may 

reconsider TRIO student eligibility 

through future rulemaking efforts. 

Clarifying Who Is Eligible for the TRIO 

Programs 

Comments: Certain commenters 

sought clarity on which individuals 

would be eligible under the 

Department’s proposed rule, including 

income requirements, potential 

eligibility of middle school students, 

and whether only a certain percentage 

of noncitizens would be eligible to 

participate under the proposed rule. 

Discussion: Because the Department is 

not finalizing this provision, we decline 

to provide guidance as to how these 

changes would have been 

operationalized. However, we note that 

section 402A of the HEA outlines the 

documentation requirements for lowincome individuals under the TRIO 

programs. 

Changes: The Department does not 

finalize the TRIO provisions and may 

reconsider TRIO student eligibility 

through future rulemaking efforts. 

Suggested Technical Edits for Students 

From Territories and Freely Associated 

States 

Comments: One commenter points 

out that there are multiple instances in 

the proposed TRIO regulations where 

American Samoa is omitted while other 

Pacific territories are explicitly named. 

Additionally, the commenter notes that 

the regulatory text includes outdated 

references to the Republic of Palau, 

which is no longer part of the Pacific 

Trust Territory, but instead a Freely 

Associated State. 

Discussion: The Department notes 

that Natives of American Samoa are 

eligible to participate in the TRIO 

sections as a ‘‘national of the United 

States.’’ Therefore, no change is needed 

to ensure the continued TRIO program 

participation of these individuals. 

The suggested change of listing the 

Republic of Palau as among the ‘‘Freely 

Associated States’’ in the EOC and TS 

programs is well taken as the U.S.-Palau 

Compact of Free Association was 

ratified in 1993 and came into effect on 

October 1, 1994. In addition to listing 

the Republic of Palau among the ‘‘Freely 

Associated States’’ in the EOC and TS 

programs, we will also remove 

references to the ‘‘Trust Territory of the 

Pacific Islands’’ in the TRIO regulations, 

as this agreement dissolved in 1990. The 

Department considers these to be 

technical changes to update outdated 

language. Another technical change we 

will be making in the UB program is 

removing the periods at the end of 

paragraphs § 645.3 (a)(1) through (4) and 

adding, in each place, ‘‘; or’’ for 

consistency purposes. 

Changes: We have added ‘‘Republic of 

Palau’’ to the list of residents in the 

Freely Associated States that are 

currently eligible to participate under 

§§ 643.3(a)(1)(v) and 644.3(a)(1)(v). We 

have removed ‘‘Trust Territory of the 

Pacific Islands (Palau)’’ from 

§§ 643.3(a)(1)(iv) and 644.3(a)(1)(v). We 

have removed ‘‘Trust Territory of the 

Pacific Islands’’ from §§ 645.3(a)(4) and 

647.3(a)(4). We have also removed the 

periods at the end of paragraphs § 645.3 

(a)(1) through (4) and added, in each 

place, ‘‘; or’’. 

Opposition to Expanding Eligibility 

Comments: A group of commenters 

argued that the Department’s proposed 

rule would be contrary to the legislative 

intent of the HEA, and that these 

changes would siphon resources away 

from currently eligible low-income 

American citizens. The commenters also 

asserted that the proposed rule 

incorrectly cited requirements under 

Plyler v. Doe and programs under the 

Elementary and Secondary Education 

Act (ESEA) as a parallel for TRIO 

programs. These commenters also 

expressed a concern that grantees in 

states with more newly eligible 

noncitizens would vie for a larger share 

of the existing TRIO funding, and 

thereby reduce available funding for 

grantees in other states. 

An additional commenter believed 

the Department’s proposal to make 

noncitizens who are enrolled in or 

seeking to enroll in a U.S. high school 

eligible for the TRIO programs would be 

in contrast with Federal immigration 

policy and certain statements of 

Congress in 8 U.S.C. 1601. 

Finally, one commenter argued that 

the amendments to the Federal TRIO 

programs might undermine their 

flexibility and effectiveness. The 

commenter believes regulatory changes 

should be carefully considered to ensure 

they do not inadvertently reduce the 


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Federal Register / Vol. 90, No. 2 / Friday, January 3, 2025 / Rules and Regulations 491 

36 8 U.S.C. 1611(b). 

37 Department of Justice, Interim Guidance on 

Verification of Citizenship, Qualified Alien Status 

and Eligibility Under Title IV of the Personal 

Responsibility and Work Opportunity 

Reconciliation Act of 1996, 62 FR 61344 (Nov. 17, 

1997). 38 Id. at 61346. 

availability or effectiveness of services 

provided to TRIO program participants. 

Discussion: Although the Department 

is not finalizing this provision to 

reconsider how best to ensure that the 

TRIO programs are able to reach all 

populations of disadvantaged students, 

the Department disagrees with the 

comments of opposition on several 

grounds. As a factual matter, the 

Department’s NPRM did not state that 

TRIO is governed by ESEA, nor did the 

NPRM cite Plyler v. Doe in the 

Department’s rationale for the proposed 

changes. Regarding the commenters’ 

concerns about newly eligible 

noncitizens taking resources away from 

currently eligible low-income American 

citizens, the TRIO programs provide 

services to several groups from 

disadvantaged backgrounds and this 

work would continue in the event of an 

expansion of student eligibility. 

Additionally, we disagree with the 

commenters’ concerns that TRIO 

funding could be diverted to grantees in 

states with a higher distribution of 

newly eligible students, as the existing 

procedures for selecting and distributing 

funding amongst eligible grantees help 

to safeguard against an inequitable 

distribution of resources across grantees. 

In response to the commenter who 

raised concerns regarding noncitizens 

receiving any public resources under 

TRIO, the Department reiterates that not 

all benefits or services provided are the 

type of ‘‘Federal public benefits’’ 

Congress sought to restrict in enacting 

PRWORA. Indeed, Congress specifically 

exempted several Federal public benefit 

programs in PRWORA in order to allow 

these programs to provide services to all 

individuals regardless of their 

immigration status, thereby directly 

undercutting the commenter’s position 

that certain noncitizens should be 

entirely deprived of aid and assistance 

of aid from the Federal government.36

The fact that a Federal program was not 

specifically included amongst those 

specifically excluded benefit programs 

does not necessitate the conclusion that 

it provides ‘‘Federal public benefits’’ for 

purposes of PRWORA. Rather, providers 

of Federal benefits, such as the 

Department of Education, are required 

to ‘‘determine whether the particular 

program they are administering 

provides a ‘federal public benefit[.]’ ’’ 37

Additionally, ‘‘[i]f one program provides 

several public benefits, [PRWORA’s] 

requirements apply only to those 

benefits that are non-exempted federal 

public benefits under [PRWORA].’’ 38

The Department also clarifies its stated 

reasoning, in the proposed rule, noting 

that the Department’s stated position on 

89 FR print page 60267 of the Federal 

Register should have read ‘‘the 

Department believes that TRIO grant 

programs providing student support 

services in the secondary context do not 

constitute the type of ‘‘incentive for 

illegal immigration provided by the 

availability of public benefits’’ that 

PRWORA was enacted to discourage.’’ 

The Department believes this position 

would be consistent with the omission 

of other programs that provide nonpostsecondary services from the 

requirements of PRWORA, such as Head 

Start and elementary and secondary 

education, as noted within the proposed 

rule. While the Department has 

determined not to finalize its proposed 

provisions, the Department nevertheless 

stands by its stated position that not all 

benefits and services provided under 

the TRIO programs are subject to 

restriction under PRWORA. 

Changes: The Department does not 

finalize the proposed TRIO provisions 

and may reconsider TRIO student 

eligibility through future rulemaking 

efforts. 

VIII. Regulatory Impact Analysis 

Executive Orders 12866, 13563, and 

14094 

Under Executive Order 12866, the 

Office of Management and Budget 

(OMB) must determine whether this 

regulatory action is ‘‘significant’’ and, 

therefore, subject to the requirements of 

the Executive Order and subject to 

review by OMB. Section 3(f) of 

Executive Order 12866, as amended by 

Executive Order 14094, defines a 

‘‘significant regulatory action’’ as an 

action likely to result in a rule that 

may— 

(1) Have an annual effect on the 

economy of $200 million or more 

(adjusted every three years by the 

Administrator of the Office of 

Information and Regulatory Affairs 

(OIRA) for changes in gross domestic 

product); or adversely affect in a 

material way the economy, a sector of 

the economy, productivity, competition, 

jobs, the environment, public health or 

safety, or State, local, territorial, or 

Tribal governments or communities; 

(2) Create serious inconsistency or 

otherwise interfere with an action taken 

or planned by another agency; 

(3) Materially alter the budgetary 

impacts of entitlements, grants, user 

fees, or loan programs or the rights and 

obligations of recipients thereof; or 

(4) Raise legal or policy issues for 

which centralized review would 

meaningfully further the President’s 

priorities, or the principles set forth in 

the Executive Order, as specifically 

authorized in a timely manner by the 

Administrator of OIRA in each case. 

This final regulatory action is a 

significant regulatory action subject to 

review by OMB under section 3(f)(4) of 

Executive Order 12866, as amended by 

Executive Order 14094. The Department 

estimates present value net cost of 

$27,349,749 over ten years at a 2 percent 

discount rate. This is equivalent to an 

annualized net cost of $3,044,753 over 

ten years. Additionally, we estimate 

annualized quantified costs of 

$9,423,657 related to paperwork burden. 

Notwithstanding this determination, 

based on our assessment of the potential 

costs and benefits (quantitative and 

qualitative), the Department has 

determined that the benefits of this final 

regulatory action would justify the 

costs. 

The Department has also reviewed the 

regulations under Executive Order 

13563, which supplements and 

explicitly reaffirms the principles, 

structures, and definitions governing 

regulatory review established in 

Executive Order 12866. To the extent 

permitted by law, Executive Order 

13563 requires that an agency— 

(1) Propose or adopt regulations only 

on a reasoned determination that their 

benefits justify their costs (recognizing 

that some benefits and costs are difficult 

to quantify); 

(2) Tailor its regulations to impose the 

least burden on society, consistent with 

obtaining regulatory objectives and 

taking into account—among other things 

and to the extent practicable—the costs 

of cumulative regulations; 

(3) In choosing among alternative 

regulatory approaches, select those 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety, 

and other advantages; distributive 

impacts; and equity); 

(4) To the extent feasible, specify 

performance objectives, rather than the 

behavior or manner of compliance a 

regulated entity must adopt; and 

(5) Identify and assess available 

alternatives to direct regulation, 

including economic incentives—such as 

user fees or marketable permits—to 

encourage the desired behavior, or 

provide information that enables the 

public to make choices. 


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39https://fsapartners.ed.gov/knowledge-center/ 

library/dear-colleague-letters/2023-05-18/ 

accreditation-and-eligibility-requirements-distanceeducation. 

40https://fsapartners.ed.gov/knowledge-center/ 

library/dear-colleague-letters/2023-05-18/ 

accreditation-and-eligibility-requirements-distanceeducation. 

Executive Order 13563 also requires 

an agency ‘‘to use the best available 

techniques to quantify anticipated 

present and future benefits and costs as 

accurately as possible.’’ The Office of 

Information and Regulatory Affairs of 

OMB has emphasized that these 

techniques may include ‘‘identifying 

changing future compliance costs that 

might result from technological 

innovation or anticipated behavioral 

changes.’’ 

The Department issues these final 

regulations only on a reasoned 

determination that their benefits would 

justify their costs. In choosing among 

alternative regulatory approaches, the 

Department selected those approaches 

that maximize net benefits. Based on the 

analysis that follows, the Department 

believes that these regulations are 

consistent with the principles in 

Executive Order 13563. 

The Department has also determined 

that this regulatory action does not 

unduly interfere with State, local, 

territorial, or Tribal governments in the 

exercise of their governmental 

functions. 

As required by OMB Circular A–4, the 

Department compared the final 

regulations to the current regulations. In 

this regulatory impact analysis, the 

Department discusses the need for 

regulatory action, responds to comments 

related to the RIA in the NPRM, 

discusses the potential costs and 

benefits, and the regulatory alternatives 

we considered. Elsewhere in this 

section under Paperwork Reduction Act 

of 1995, the Department identifies and 

explains burdens specifically associated 

with information collection 

requirements. 

1. Congressional Review Act 

Pursuant to the Congressional Review 

Act (5 U.S.C. 801 et seq.), OIRA has 

found that this rule does not meet the 

criteria in 5 U.S.C. 804(2). 

2. Need for Regulatory Action 

The Department has identified a 

significant need for regulatory action to 

address inadequate protections for 

students and taxpayers in the current 

regulations. 

Distance Education 

The HEA and the Department’s 

regulations provide that institutions of 

higher education may offer programs 

through distance education. Currently, 

however, the Department has very 

limited data about students enrolled in 

distance education, which limits the 

Department’s ability to answer 

important questions about student 

pathways and outcomes through inperson, distance, and hybrid education. 

For example, an institution may offer a 

program that is provided on campus and 

a related program of the same CIP code 

that is provided online. The Department 

is currently unable to distinguish 

between those two programs in the data 

it currently receives, which limits its 

capacity to provide helpful and reliable 

information to students, families, 

institutions, and the public. A notable 

example is the Department is unable to 

distinguish between two such programs 

for College Scorecard program-level data 

including debt, earnings, and 

completion. The Department is also 

unable to determine whether 

institutions have reached the 50 percent 

threshold for distance education 

enrollment announced in Dear 

Colleague Letter GEN–23–09.39 This is 

important because institutions must 

obtain further accreditor approval 

beyond the initial approval to deliver 

distance education programs when they 

enroll at least 50 percent of their 

students in distance education or offer 

at least 50 percent of their courses (or 

50 percent of a program) via distance 

education. 

The final regulations for distance 

education change institutional reporting 

requirements to specify a student’s 

distance education enrollment status. 

This change enables the Department 

to obtain better data and more 

meaningfully compare the outcomes of 

students, particularly for those who are 

enrolled in similar programs that are 

delivered using different modalities. It 

also allows the Department to better 

monitor and oversee the aid programs 

and institutional accrediting agencies by 

ensuring institutions are receiving 

appropriate review and approval of 

distance education offerings.40

R2T4 

The R2T4 regulations govern the 

process institutions must conduct when 

a title IV, HEA recipient ceases 

attendance during a payment period or 

a period of enrollment. An R2T4 

calculation determines, based on the 

proportion of a payment period or 

period of enrollment a student 

completed, whether funds must be 

returned by the school and/or student, 

or whether the student is eligible for a 

post-withdrawal disbursement. R2T4 

calculations differ based on academic 

calendars and program format, 

including the use of clock hours or 

credit hours and the use of module 

courses within terms. R2T4 consistently 

ranks among the top ten compliance 

findings for institutions, is the subject of 

an entire volume of sub-regulatory 

guidance in the FSA Handbook and 

yields complex and challenging 

questions. Therefore, the Department 

believes that there is a need to take 

regulatory action immediately to update 

and clarify the regulations. 

Withdrawal Exemption 

For some institutions, the R2T4 

process is complex, with a high 

likelihood of errors, including issues 

such as incorrectly determining the 

withdrawal date or the number of days 

in a payment period. To simplify the 

process for institutions, these 

regulations establish a withdrawal 

exemption in which an institution does 

not need to conduct an R2T4 calculation 

if the following conditions are met: (1) 

the student is treated as never having 

begun attendance; (2) the institution 

returns all title IV, HEA aid disbursed 

to the student including any title IV 

credit balance for that payment period 

or period of enrollment; (3) the 

institution refunds all institutional 

charges to the student for that payment 

period or period of enrollment; and (4) 

the institution writes off or cancels any 

payment period or period of enrollment 

balance owed by the student to the 

institution due to the institution’s 

returning of title IV funds to the 

Department. 

The final withdrawal exemption 

reduces the likelihood that a student 

owes money back to the school, allows 

the student to not exhaust annual and 

aggregate subsidized aid, including Pell 

Grants, and reduces the likelihood the 

student will have a loan balance 

associated with a program they may not 

finish. 

Determination of Withdrawal Status 

This provision requires that an 

institution that is required to take 

attendance must, within 14 days of a 

student’s last date of attendance, 

document a student’s withdrawal date 

and maintain the documentation as of 

the date of the institution’s 

determination that the student 

withdrew. We reiterate that this is not 

a requirement that the student be 

administratively withdrawn or that an 

R2T4 calculation be completed at that 

time. If the student subsequently begins 

attendance within 30 days of the date of 

determination, then there is nothing 

further an institution must do as it 

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41https://www.federalregister.gov/documents/ 

2022/10/28/2022-23078/pell-grants-for-prisoneducation-programs-determining-the-amount-offederal-education-assistance. 

42 Distance Education and Innovation–final 

regulations: https://www.federalregister.gov/ 

documents/2020/09/02/2020-18636/distanceeducation-and-innovation. 

or the return of funds to the Department 

(45 days). 

Leave of Absence 

On July 1, 2023, the Department 

published final regulations that detailed 

Pell Grant eligibility for confined or 

incarcerated individuals in PEPs.41

These regulations did not address 

students who are incarcerated and who 

face involuntary interruptions to their 

academic programs. For example, an 

entire correctional facility may be 

locked down due to a security issue, 

interrupting a student’s progress in their 

PEP. 

With these final regulations the 

Department makes changes to the 

regulations governing leave of absence 

to allow a student who is incarcerated 

to not have to return from the leave of 

absence where the student left off, and 

instead, the individual could return to 

a different point in their PEP. This 

applies to programs of any structure, 

including term-based programs. This 

change increases flexibility for 

institutions and will help boost student 

retention in PEPs. 

Clock-Hour Programs 

As a part of the R2T4 calculation, 

institutions must determine the 

percentage of the payment period or 

period of enrollment the student 

completed based on scheduled clock 

hours if enrolled in a clock-hour 

program. There are currently two ways 

that institutions can make this 

determination: the payment period 

method and the cumulative method. 

The cumulative method (as described in 

the Analysis of Public Comment and 

Changes section) usually results in a 

significant amount of aid earned by the 

student compared to the actual time the 

student attended during the payment 

period. With these final regulations the 

Department has streamlined this 

calculation so that the payment period 

method is the single, standardized 

method across all clock-hour programs. 

R2T4 and Modules 

In 2021, the Department published 

final regulations outlining several 

changes to R2T4 and modules.42 The 

regulations immediately raised a 

question about how an institution 

determines whether the days in a 

module are included in the R2T4 

calculation. The answer is complex and 

depends on several variables, including 

whether the institution uses an R2T4 

freeze date and the type(s) of title IV, 

HEA aid for which the student was 

eligible during the payment period or 

period of enrollment. 

With these final regulations the 

Department simplifies the 

determination by only including days in 

the module if the student actually 

attends the module. This change 

reduces complexity and errors as 

institutions will no longer need to use 

a freeze date or differentiate between 

Pell Grant and Direct Loan recipients. 

3. Summary of Comments and Changes 

From the NPRM 

TABLE 3.1—SUMMARY OF KEY CHANGES IN THE FINAL REGULATIONS

Provision Regulatory 

section Description of final provision 

Distance education 

Definition of distance education course ......................... 600.2 Removes the phrase ‘‘residency experiences’’ from the definition. 

Definition of additional location ...................................... 600.2 Does not finalize the definition related to a virtual location. 

Definition of a week of instructional time ....................... 668.3 Does not finalize the limitation on asynchronous clock-hour programs 

being offered through distance education. 

Reporting enrollment in distance education or correspondence courses.668.41 Updates the effective date from July 1, 2026, to July 1, 2027. 

Return to title IV 

Treatment of Title IV Grant and Loan Funds if the Recipient does not Begin Attendance at the Institution 

(§ 668.21).

668.21 Does not finalize the provision to allow a student who received a loan 

disbursement as part of a title IV credit balance, but never began attendance in a payment period or period of enrollment, to repay loan 

funds they received under the terms of their promissory note. 

Withdrawal Exemption ................................................... 668.22 Updates § 668.22(a)(2)(ii)(A)(6)(iv) to replace ‘‘any current year balance’’ 

with ‘‘any payment period or period of enrollment balance’’ owed by 

the student to the institution due to the institution’s returning of title IV, 

HEA funds to the Department. Also include references to funds received by a parent so they are covered by this exemption as well. 

Required attendance taking in distance education 

courses.

668.22 Does not finalize the proposal require attendance taking in distance education courses. 

Federal TRIO Programs 

Talent Search program .................................................. 643.3 Does not finalize the proposed changes to this provision. 

Educational Opportunity Centers program .................... 644.3 Does not finalize the proposed changes to this provision. 

Upward Bound programs (Regular, or Math and 

Science).

645.3 Does not finalize the proposed changes to this provision. 

General Comments 

Comments: One commenter claimed 

that the Department significantly 

underestimated the compliance costs for 

this regulatory package, which will 

necessitate significant changes to 

institutional policies and processes, will 

involve large-scale duplicative 

reporting, and will require 


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redevelopment of information systems 

to support the new requirements, all of 

which will ultimately increase costs for 

students. 

Discussion: While the commenters 

did not provide any data to justify their 

assertions, after careful review of the 

final regulations, and based on the 

Department’s administrative experience, 

the Department increased burden 

estimates as described in the Distance 

Education cost analysis section of the 

RIA. In the NPRM, we estimated a cost 

burden of $381,560 in the first year 

across all impacted institutions under 

§ 668.41 to require institutions to report 

the enrollment status of students in 

distance education or correspondence 

courses. In the NPRM, the Department 

did not estimate a cost for transitioning 

to synchronous instruction for affected 

clock-hour programs. In these final 

regulations, the Department has 

removed several provisions, which 

reduce levels of burden from what was 

included in the NPRM. This includes 

not finalizing the provision related to 

synchronous clock hour programs. 

Additionally, the Department has not 

finalized the provision under 

§ 668.22(b)(3)(ii) for required attendance 

taking in distance education courses, 

which reduces burden associated with 

that previously proposed requirement. 

Changes: In total, the Department now 

estimates reviewing and revising these 

procedures will cost approximately 

$10,057,889 in the first year across all 

impacted institutions. 

Comments: One commenter noted 

that the proposed provisions could force 

institutions to hire additional staff to 

manage an increased documentation 

and compliance workload. 

Discussion: The Department 

acknowledges that some institutions 

may need to increase or re-allocate staff 

duties and responsibilities to comply 

with these final regulations. The costs 

described in the RIA account for 

potential increased costs for institutions 

as a result of these final regulations. In 

the NPRM, we estimated a cost burden 

of $381,560 in the first year across all 

impacted institutions under § 668.41 to 

require institutions to report the 

enrollment status of students in distance 

education or correspondence courses. In 

the NPRM, the Department did not 

estimate a cost for transitioning to 

synchronous instruction for affected 

clock-hour programs. In these final 

regulations, the Department has 

removed several provisions, which 

reduce levels of burden from what was 

included in the NPRM. This includes 

not finalizing the provision related to 

synchronous clock hour programs. 

Changes: In total, the Department now 

estimates reviewing and revising these 

procedures will cost approximately 

$10,057,889 in the first year across all 

impacted institutions. 

Asynchronous Distance Education in 

Clock-Hour Programs 

Comments: One commenter alleged 

that the Department has not sufficiently 

identified the proportion of 

asynchronous learning activities that do 

not meet the Department’s standard. 

This commenter argued that a reasoned 

analysis must include an estimate of the 

cost to students and institutions of 

removing asynchronous distance 

education instruction in clock-hour 

programs and a comparison to any 

benefits from those proposed changes. 

The commenter further opined that 

failing to provide such an estimate 

would render the provision arbitrary 

and capricious. Another commenter 

opined that the proposed regulations 

would disproportionately increase 

administrative burden on institutions 

that serve students exclusively through 

distance education. One commenter 

estimated that at least 75 percent of 

asynchronous activities would be 

disallowed under the proposed 

regulations but are of sufficient quality 

to merit equal treatment with 

synchronous activities, forecasted that 

the value of asynchronous learning will 

increase over time, and predicted that 

the costs to institutions and students for 

disallowing asynchronous distance 

education in clock-hour programs 

would therefore also rise over time. One 

commenter noted that faculty offering 

asynchronous coursework via distance 

education in clock-hour programs may 

experience increased workload and 

potential dissatisfaction because of the 

need to redesign their courses. 

One commenter noted that it is the 

responsibility of the Department, not 

public commenters, to provide reasoned 

burden and cost estimates for the 

Department’s proposed regulatory 

provisions, and that it is inappropriate 

for the Department to avoid such 

necessary calculations merely because 

commenters have not offered their own 

calculations. 

Discussion: When developing cost 

and benefit analysis of proposed rules, 

the Department relies on its own data 

sources, publicly available data sources, 

and the administrative experience of 

Department staff. In instances where 

there is a lack of certainty, the 

Department may rely, in part, on data or 

evidence provided to the Department 

through public comment on the NPRM. 

That is why, in section 3.A.3 of the 

NPRM, the Department invited 

comments from the public on its 

estimates contained in the NPRM. The 

Department requested comments to 

ensure that the NPRM’s estimates 

accurately reflected realistic 

assumptions about the average burdens 

that the regulations would impose on 

affected entities. The Department 

believes that the cost analysis included 

in the RIA fully considers the potential 

costs and benefits of the final 

regulations based on the Department’s 

own data sources, publicly available 

data sources, and the administrative 

experience of Department staff. 

Additionally, for these final regulations, 

the Department revised its cost 

estimates upward partly in response to 

high-quality comments from the public. 

While these high-quality comments did 

not provide specific data, they did 

provide convincing qualitative 

information that led the Department to 

further consider potential costs, based 

on the Department’s administrative 

experience, under the final regulations. 

Changes: The Department removed 

limitations on asynchronous distance 

education in clock hour programs. In 

total, the Department now estimates 

reviewing and revising these procedures 

will cost approximately $10,057,889 in 

the first year across all impacted 

institutions. 

Comments: One commenter estimated 

costs between $1.5 and $2.4 million for 

113 community colleges ($12,500 to 

$20,500 per institution) resulting from 

the proposed regulations because these 

institutions would need to review their 

clock-hour programs to determine 

which should be converted into credithour programs, as well as update 

relevant course assignments, classroom 

lectures, and learning materials. This 

commenter requested an 

implementation date no earlier than 

2027, noting that curriculum changes 

require local faculty review, employer 

input, and statewide approval which 

can take approximately 18 months to 

complete. 

One commenter predicted that cost 

and burden from the proposed 

elimination of asynchronous instruction 

for clock-hour programs would divert 

educational resources and 

disproportionately impact firstgeneration, adult, and marginalized 

students. 

Discussion: When developing cost 

and benefit analysis of proposed rules, 

the Department relies on its own data 

sources, publicly available data sources, 

and the administrative experience of 

Department staff. In instances where 

there is a lack of certainty, the 

Department may rely, in part, on data or 

evidence provided to the Department 


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through public comment on the NPRM. 

That is why, in section 3.A.3 of the 

NPRM, the Department invited 

comments from the public on its 

estimates contained in the NPRM. The 

Department requested comments to 

ensure that the NPRM’s estimates 

accurately reflected realistic 

assumptions about the average burdens 

that the regulations would impose on 

affected entities. 

As described in the preamble to these 

final regulations, the Department has 

decided not to finalize the proposal to 

limit asynchronous clock hour programs 

from accessing title IV, HEA funds. By 

not finalizing this provision there is no 

longer any burden associated with this 

provision in the final rule. It also means 

the concerns brought up by the 

commenters are no longer relevant. The 

Department believes that the cost 

analysis included in the RIA fully 

considers the potential costs and 

benefits of the final regulations based on 

the Department’s own data sources, 

publicly available data sources, and the 

administrative experience of 

Department staff. 

Changes: None. 

Attendance Taking for Distance 

Education Courses 

Comments: We received many 

comments that stated the Department 

underestimated the administrative and 

financial burden to postsecondary 

institutions, including community 

colleges, by requiring attendance taking 

for distance education courses; 

including the significant investment in 

new technologies. Commenters believed 

that the analysis was not properly 

justified and also lacked reference to the 

negative impact this may have on other 

stakeholders like instructors and 

students. 

Discussion: As discussed in the 

preamble, the Department is statutorily 

required to ensure the proper return of 

title IV, HEA funds when a student 

withdraws before completing a payment 

period or period of enrollment. 

Attendance taking is specifically 

provided for in the statute and is crucial 

for the Department to carry out its 

statutory responsibilities. We remain 

concerned about ensuring that 

withdrawals are properly tracked in a 

fully online environment, where we 

have observed that institutions have 

greater tools available to them for 

tracking student engagement than exist 

when offering in-person classes. An 

accurate withdrawal date is critical to 

ensure that the right amount of 

unearned title IV, HEA aid is returned, 

and students’ accounts are properly 

reduced. However, we are persuaded by 

concerns about the need for continued 

development in these tools to make 

them consistently effective for this 

purpose, including the need for system 

interoperability. As such, we are not 

finalizing this provision to provide more 

time to evaluate technological changes 

that can better track student 

engagement. 

Because the Department is not 

finalizing the provision under 

§ 668.22(b)(3)(ii), the concerns about 

burden raised by commenters are no 

longer relevant. Institutions will not be 

required to take attendance in a distance 

education course unless there are other 

existing reasons for why they must do 

so. As such, there are no added burden 

costs from this withdrawn provision. 

We have updated the relevant parts of 

the RIA to remove any burden estimates 

from this proposed provision. 

Changes: The Department does not 

finalize the proposal under 

§ 668.22(b)(3)(ii) for required attendance 

taking in distance education courses. 

We also removed the associated burden 

from the estimated costs of these final 

regulations. 

Distance Education Reporting 

Comments: A few commenters 

claimed that the Department 

understated the costs associated with 

the proposed reporting requirements for 

distance education. One commenter 

further observed that institutions would 

pass these costs along to students. One 

commenter estimated one-time costs in 

the low thousands of dollars for 

updating data collection procedures, 

which would amount to approximately 

$2 million to $2.5 million across their 

system of institutions. This commenter 

requested an implementation date no 

sooner than 2027 to provide institutions 

time to update their data collection 

systems. 

Discussion: Upon further review, the 

Department agrees that the NPRM did 

not fully account for costs that may be 

expected to result from the distance 

education reporting requirements; 

however, the Department strongly 

disagrees that this final regulation 

would result in increased costs for 

students. The Department estimates that 

costs resulting from these requirements 

would primarily result from increased 

labor hours and would only occur in the 

first year after the promulgation of this 

final regulation. In light of comments 

received from the public on the cost 

estimates included in the NPRM, the 

Department reconsidered the potential 

burden of this final regulation, and after 

reviewing additional data submitted by 

commenters and data maintained by the 

Department, revised cost estimates for 

this final regulation to more fully 

account for the cost of increased staff 

labor hours to update data collection 

policies and procedures. We were able 

to incorporate this additional 

information in this final regulation to 

update the estimated burden. As noted 

earlier, this provision will not begin 

until July 1, 2027. We believe this date 

provides institutions with sufficient 

time to prepare for implementation of 

this final regulation. 

Changes: As described in the RIA, in 

the NPRM the Department initially 

estimated a cost burden for distance 

education reporting of $381,560 in the 

first year across all impacted 

institutions. The Department estimates 

costs of $10,057,889 in the first year for 

impacted institutions. 

Comments: Several commenters 

raised concerns about the costs, in 

dollars and in administrative time, 

associated with reporting a virtual 

location for distance learning courses, 

particularly for students enrolled in a 

combination of in-person and distanceeducation courses, and that such 

reporting could potentially impact the 

quality of services available to students. 

One commenter opined that the 

Department’s analysis in the NPRM did 

not account for the costs associated with 

declaring a virtual location for all 

distance education courses. The 

commenter further noted that online 

learning is especially important in rural 

states, citing data from the New Mexico 

Legislative Finance Committee that 

Native Americans and Hispanics earn 

43 and 49.6 percent of their credits, 

respectively, via distance education, 

and that these online students are 

predominantly women, older, and nonwhite, which suggests that the proposed 

changes would disproportionately 

impact these populations. 

Discussion: As discussed in the 

preamble above, the Department has 

decided not to move forward with the 

reporting of a virtual location. There is 

thus no burden associated with this 

provision in the final regulations. 

Changes: We have removed the 

burden associated with virtual location 

reporting. 

Comments: One commenter observed 

that NSLDS enrollment reporting 

findings consistently rank among the 

top 10 audit and program review 

findings, with respective findings rates 

of 16.8 percent and 8.8 percent, which 

suggests that the Department 

underestimated the labor and costs of 

reporting given longstanding structural 

deficiencies with NSLDS that reflect a 

faulty and overly complex reporting 

process. 


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Discussion: Upon further review, the 

Department agrees that the NPRM cost 

estimates for Distance Education 

reporting underestimated burden for 

Distance Education reporting. The 

Department increased burden estimates 

as a result of further review. 

Changes: The Department increased 

the burden estimate from $381,560 to 

$10,057,889 in the first year across all 

impacted institutions for distance 

education reporting. 

Failure To Begin Attendance 

Comments: One commenter noted 

that it is currently unclear which, if any, 

of the Department’s loan forgiveness 

initiatives will withstand litigation, 

casting uncertainty on the costs 

associated with allowing students who 

fail to begin attendance to repay loans 

under the terms and conditions of the 

promissory note as proposed at 

§ 668.21(a)(2)(ii). This commenter 

further asserted that the estimates the 

Department included in the NPRM 

relative to this provision are no longer 

accurate, in part because the Saving 

Against a Valuable Education (SAVE) 

repayment plan will likely continue to 

fail in ongoing legal proceedings. 

One commenter argued that the 

Department’s cost estimate for this 

provision, in only considering 

compliance costs for loan services, did 

not account for: (1) an increased number 

of persons seeking loans; (2) the 

resulting increased costs and transfers; 

or (3) transfers from the government to 

borrowers for allowing these borrowers 

to repay over time rather than 

immediately upon demand. The 

commenter questioned whether the 

benefits of allowing repayment over 

time for students who legitimately 

planned to attend would justify the 

costs from those that would enroll only 

to obtain loans. 

Discussion: As explained elsewhere, 

the Department has chosen not to move 

forward with this provision in these 

final regulations. As a result, there is no 

cost associated with this provision. 

Changes: The Department removed 

the change in § 668.21 to allow a 

student who received a loan 

disbursement as part of a title IV credit 

balance, but never began attendance in 

a payment period or period of 

enrollment, to repay loan funds they 

received under the terms of their 

promissory note. 

4. Discussion of Costs, Benefits, and 

Transfers 

The Department has analyzed the 

costs and benefits of complying with 

these regulations. Although many of the 

associated costs and benefits are not 

easily quantifiable, the Department 

currently believes that the benefits 

derived from the regulations outweigh 

the associated costs, as discussed in 

sections 4.B. and 4.C. below. 

The regulations, which will apply to 

over 6,000 postsecondary institutions, 

will help ensure students are well 

served by the institutions of higher 

education they attend and ensure that 

the Federal Student Aid programs work 

in the best interests of students. These 

final regulations will also reduce the 

likelihood of reporting errors in R2T4 

and will standardize and simplify 

related processes and calculations. 

Due to the large number of affected 

recipients (5,898, as discussed more 

fully in the discussion of Establishing 

the Baseline (Section 4.A)), the variation 

in likely responses to any regulatory 

change, and the limited information 

available about current practices, the 

Department is not able to precisely 

estimate the likely costs, benefits, and 

other effects of the regulations. Despite 

these limitations and based on the best 

available evidence as explained in the 

discussion of Establishing a Baseline 

(Section 4.A), the Department estimates 

net present value costs of $27,349,749 

over ten years at a 2 percent discount 

rate. This is equivalent to an annualized 

cost of $3,044,753 over ten years. The 

regulations are expected to result in 

estimated costs of $27,896,744 in the 

first year following publication of these 

final regulations. 

TABLE 4.1—NET ANNUAL COSTS, YEARS 1 THROUGH 10 

Year Net annual costs 

Year 1 .......................................................................................................................................................................................... $27,896,744 

Year 2 .......................................................................................................................................................................................... 0 

Year 3 .......................................................................................................................................................................................... 0 

Year 4 .......................................................................................................................................................................................... 0 

Year 5 .......................................................................................................................................................................................... 0 

Year 6 .......................................................................................................................................................................................... 0 

Year 7 .......................................................................................................................................................................................... 0 

Year 8 .......................................................................................................................................................................................... 0 

Year 9 .......................................................................................................................................................................................... 0 

Year 10 ........................................................................................................................................................................................ 0 

Total Net Present Value (NPV), 2 percent ........................................................................................................................... 27,349,749 

Annualized, 2 percent ........................................................................................................................................................... 3,044,753 

As discussed in the Cost Estimates 

section (Section 4.B), the Year 1 costs 

include one-time costs associated with 

reviewing and making necessary 

changes to policies, procedures, and 

training to implement the regulations. 

The assumptions, data, methodology, 

and other relevant materials, as 

applicable, on which the Department 

relied in developing its estimates are 

described throughout this Regulatory 

Impact Analysis (RIA). 

4.A. Establishing a Baseline 

4.A.1. Number of Affected Entities 

Institutions of higher education will 

be subject to the final regulations. For 

purposes of establishing a baseline, this 

includes the number of institutions of 

higher education participating in 

programs under title IV of the HEA 

(such as Direct Loans, Federal Work 

Study, and Pell Grants). 

For purposes of this analysis, the 

Department bases its analysis of 

‘‘postsecondary entities’’ on 

‘‘institutions of higher education’’ as 

defined in section 102 of the HEA. It is 

assumed that 5,898 postsecondary 

institutions will be impacted by the 

regulations. Among postsecondary 

institutions, institutions range from 

small, private, professional schools with 

fewer than 5 students enrolled in the 

fall of 2023 to large, public research 

universities with enrollments of more 

than 71,000 students and institutions 

operating mostly virtually with 


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43U.S. Bureau of Labor Statistics, May 2023 

National Industry-Specific Occupational 

Employment and Wage Estimates, Sector 61— 

Educational Services, https://www.bls.gov/oes/ 

current/oes_nat.htm (last modified Apr. 3, 2024). 44Based on internal data available to FSA. 

enrollments in excess of 156,000 

students. 

It is important to note that, across 

postsecondary institutions, there is wide 

variation in the number of students 

served, the number of employees, 

administrative structure, and annual 

revenue. This wide variation makes 

estimating the effects of the regulations 

challenging, and the Department notes 

that the estimates provided are intended 

to reflect the average burden across the 

full spectrum of affected entities. As a 

result, estimates may be lower than the 

actual burden realized by, for example, 

larger institutions or institutions with 

more complex administrative structures, 

and larger than those actually realized 

by smaller institutions with less 

complex administrative structures. 

4.A.2. Wage Rates 

Unless otherwise specified, the 

Department’s model uses mean hourly 

wages for personnel employed in the 

education sector as reported by the 

Bureau of Labor Statistics (BLS) 43 and 

a loading factor of 2.0 to account for the 

employer cost of employee 

compensation and benefits and indirect 

costs (e.g., physical space, equipment, 

and technology costs). When 

appropriate, the Department identifies 

the specific occupation used by the BLS 

in its tables to support the reader’s 

analysis. The Department assumes that 

inflation-adjusted wage rates remain 

constant for the duration of the time 

horizon. 

4.A.3. Other Information 

In addition, throughout this RIA, 

some described calculations have 

results that are fractions. To improve 

readability, the Department presents 

these results as rounded totals in the 

text (e.g., 1.95 or 3,450 instead of 1.9478 

or 3,449.6786), but retains the 

unrounded value for purposes of its 

underlying calculations. 

4.B. Costs of the Final Regulations 

In this section, the Department 

estimates monetized cost burdens 

associated with the final regulations. To 

assist the public in reviewing these 

estimates, the Department has 

subdivided this analysis, when 

appropriate, into the relevant subparts. 

As described below, the Department 

estimates a first-year cost of 

$27,896,744. The Department estimates 

the changes will result in a total 

annualized cost of $3,044,753. 

The Department estimates that, upon 

promulgation of the regulations, all 

affected entities will need time to read 

and understand the rule. Based on the 

Department’s administrative experience, 

we assume this will require, on average, 

six hours from an education 

administrator (educational 

administrator (postsecondary), loaded 

wage rate of $117.32/hour) and six 

hours from a lawyer (postsecondary, 

loaded wage rate of $172.76/hour) for 

each of the 5,898 IHEs. In total, the 

Department estimates that reading and 

understanding the rule will have a onetime cumulative cost of approximately 

$10,265,351 across all institutions of 

higher education. 

Distance Education—Reporting and 

Disclosure of Information 

As a result of changes to § 668.41 to 

require institutions to report the 

enrollment status of students in distance 

education or correspondence courses, 

the Department estimates that each IHE 

will need to review and revise reporting 

policies and procedures. In response to 

comments on this section of the NPRM 

RIA, we increase the number of hours it 

would take to review and revise 

reporting policies and procedures. We 

assume this will require 20 hours from 

an education administrator and 8 hours 

from an administrative assistant (loaded 

wage rate of $43.58/hour) for each of the 

3,732 IHEs 44 that reported offering at 

least one distance education course. In 

the NPRM we estimated a cost burden 

of $381,560 in the first year across all 

impacted institutions. In total, the 

Department now estimates reviewing 

and revising these procedures will cost 

approximately $10,057,889 in the first 

year across all impacted institutions. 

Return of Title IV Funds—When 

Student Withdraws 

The addition of § 668.22(a)(2)(ii)(A)(6) 

will exempt institutions from 

performing an R2T4 calculation 

resulting from a student withdrawal by 

providing flexibility in conducting R2T4 

calculations when certain conditions are 

met. The Department assumes that 

institutions will need to review and 

revise their R2T4 policies and 

procedures. The Department estimates 

that the change will require eight hours 

from an education administrator and 

two hours from a lawyer for each IHE 

for a total first year cost of 

approximately $7,573,504 across all 

5,898 institutions. 

4. C. Non-Monetized Benefits 

Distance Education 

Changes to provide better data on 

student outcomes for students enrolled 

in distance education will provide 

benefits for students in allowing 

reporting and evaluations of outcomes 

for students depending on their 

enrollment in distance education, 

traditional on-site instruction, or a 

combination of the two. Such analysis is 

increasingly advantageous to determine 

the educational and cost effectiveness of 

postsecondary instruction as it becomes 

more available at a distance. 

R2T4 

Benefits to Students 

If institutions choose to implement 

the optional withdrawal exemption, 

students who withdraw will not owe 

any balance related to any returned title 

IV, HEA aid to the Department or the 

institution. This will alleviate students 

from the burden of having to repay title 

IV, HEA dollars or owing an 

institutional debt related to a payment 

period or period of enrollment that they 

did not complete. 

Students who are incarcerated at 

times may need to (or be forced to) take 

a break in their PEP, including activities 

out of their control such as prison-wide 

lockdowns or involuntary transfers to 

other facilities. The regulations will 

benefit incarcerated students by 

allowing them to not have to come back 

from the leave of absence where they 

left off (as current regulations require), 

and instead, the student could come 

back at a different point in their eligible 

prison education program, affording 

greater flexibility in their academic 

progression. 

Benefits to Institutions 

Institutions will benefit under several 

of these final regulations. Currently, an 

institution offering clock-hour programs 

may use two methods to determine the 

percentage of the payment period 

completed: cumulative, and by payment 

period. These regulations will require 

institutions to use the payment period 

method when calculating the number of 

scheduled hours completed in clockhour programs. This change will reduce 

the complexity of the R2T4 calculations 

and the inconsistency in the manner in 

which the calculation is done for clockhour programs at different institutions. 

Currently institutions implement 

complex sub-regulatory guidance to 

determine the number of days in the 

payment period for a program offered in 

modules, even if the student did not 

attend the module. These regulations 

will benefit institutions through the 


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45Annual Top Ten School Findings and School 

Fine Reports: https://studentaid.gov/data-center/ 

school/fines-and-findings. 

requirement that the student actually 

attend the module for the days in the 

module to be included in the payment 

period. It will also eliminate the need 

for a ‘‘freeze date,’’ further reducing 

complexity. 

Benefits to the Taxpayer 

Overall, we believe that the more 

accurate calculations and reductions in 

complexity will benefit the taxpayer by 

reducing errors in R2T4 calculations, 

resulting in more accurate amounts 

being returned to the Department and 

further supporting the integrity of the 

title IV, HEA programs. R2T4 

consistently ranks in the Top 10 

compliance findings,45 costing the 

Federal government time and money to 

provide assistance through training and 

conducting program reviews in an effort 

to identify and correct R2T4 errors 

committed by institutions. We believe 

the changes will also help alleviate 

some compliance issues related to R2T4. 

5. Accounting Statement 

As required by OMB Circular A–4, in 

the following table, the Department has 

prepared an accounting statement 

showing the classification of the 

expenditures associated with the 

provisions of these final regulations. 

This table provides the best estimate of 

the changes in annual monetized 

benefits and costs of these final 

regulations. 

TABLE 5.1—ACCOUNTING STATEMENT ANNUALIZED COSTS

Annualized costs 

2% discount rate 

Reading and Understanding the New Rule ................................................................................................................................. $1,120,398 

Distance Education—Reporting and disclosure of information ................................................................................................... 1,097,755 

R2T4—Student withdrawal .......................................................................................................................................................... 826,600 

Total ...................................................................................................................................................................................... 3,044,753 

6. Alternatives Considered 

The Department considered the 

following items in response to public 

comments submitted on the NPRM. 

Many of these are also discussed in the 

preamble to these final regulations. 

6.1 Distance Education 

As already noted above, there were 

some requests for the Department to 

consider a limitation, such as a 

percentage of a program’s length, on the 

amount of asynchronous coursework 

that could count toward clock hours 

required in clock-hour programs, but for 

the reasons we adduced above, we 

decided to not finalize this proposal 

instead. 

6.2 R2T4 

The Department received a significant 

number of comments expressing 

concern regarding the administrative 

burden associated with the entire 

proposal on R2T4. The Department 

considered all comments and decided 

against abandoning the proposal 

altogether. We did amend this final 

regulation to not finalize the attendance 

taking requirement for distance 

education programs, to provide more 

time to evaluate technological changes 

that can better track student 

engagement. This is explained in greater 

detail in the preamble. 

Several commenters had concerns 

with the provision under (§ 668.22(l)(9) 

to consider a module part of the 

payment period used in the 

denominator of the R2T4 calculation 

only when a student begins attendance 

in the module. Commentors stated that 

this change will make it easier to obtain 

and retain large amounts of student 

loans through minimal participation 

which will result in a gaming of the 

system. The Department considered the 

comments and ultimately determined 

that we do not believe that the change 

will result in a gaming of title IV, HEA 

aid. We believe the reduction in 

administrative burden created by this 

regulatory change will more than 

outweigh the potential for students to 

receive more federal student aid than 

they would have under the previous 

requirements. We note that students 

enrolled in modular programs still are 

required to comply with title IV 

requirements that are not impacted by 

this regulatory change such as 

mandatory Pell recalculations. Further, 

institutions may break up title IV 

disbursements into smaller increments 

(by module for example) to best meet 

the needs of the student, as long as the 

disbursement practices do not violate 

§ 668.16(s). 

During rulemaking the Department 

originally proposed to exempt confined 

or incarcerated individuals from R2T4 if 

the withdrawal were due to 

circumstances outside of their control, 

such as a prison-wide lock down. After 

further internal review, we determined 

that the Department does not have the 

authority under the HEA to exempt 

specific groups from R2T4. In the 

NPRM, we amended the proposal under 

§ 668.22(d)(1)(vii) to provide more 

flexibility to postsecondary institutions 

in their leave of absence policies for 

confined or incarcerated individuals. 

Several commenters had concerns with 

this proposal. For example, one 

commenter stated that incarcerated 

students still may not be able to return 

within 180 days and would therefore 

need to be withdrawn in any event 

under the normal requirements for 

approved leaves of absence. Another 

commenter requested that the 

Department return to its original 

proposal of exempting confined or 

incarcerated students from R2T4. We 

again discussed the legality of 

exempting confined or incarcerated 

students from R2T4 and determined that 

we do not have that authority under the 

HEA. 

6.3 TRIO 

We considered expanding TRIO 

student eligibility to all five TRIO 

student support programs as requested 

by many commenters, but ultimately 

decided to not finalize the proposed 

TRIO provisions to reconsider how best 

to ensure that the TRIO programs are 

able to reach all populations of 

disadvantaged students. 

7. Regulatory Flexibility Act 

This section considers the effects that 

the final regulations may have on small 

entities in the educational sector as 

required by the Regulatory Flexibility 

Act (RFA), 5 U.S.C. 601 et seq. The 

purpose of the RFA is to establish as a 

principle of regulation that agencies 


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46For additional background on the Department’s 

justification for using an enrollment-based size 

standard, see ‘‘Student Assistance General 

Provisions, Federal Perkins Loan Program, Federal 

Family Education Loan Program, and William D. 

Ford Federal Direct Loan Program’’ proposed rule, 

published in the Federal Register on July 31, 2018, 

83 FR 37242, and final rule, published in the 

Federal Register on September 23, 2019, 84 FR 

49788; and ‘‘Gainful Employment’’ final rule 

published in the Federal Register on July 1, 2019, 

84 FR 31392. The Department notes that the 

alternative size standards that are used in these 

final regulations are identical to the alternative size 

standards used in the GE regulations published in 

the Federal Register on October 10, 2023. See 88 

FR 70175. 

47 In regulations prior to 2016, the Department 

categorized small businesses based on tax status. 

Those regulations defined ‘‘nonprofit 

organizations’’ as ‘‘small organizations’’ if they were 

independently owned and operated and not 

dominant in their field of operation, or as ‘‘small 

entities’’ if they were institutions controlled by 

governmental entities with populations below 

50,000. Those definitions resulted in the 

categorization of all private nonprofit organizations 

as small and no public institutions as small. Under 

the previous definition, proprietary institutions 

were considered small if they are independently 

owned and operated and not dominant in their field 

of operation with total annual revenue below 

$7,000,000. Using FY 2017 IPEDs finance data for 

proprietary institutions, 50 percent of 4-year and 90 

percent of 2-year or less proprietary institutions 

would be considered small. By contrast, an 

enrollment-based definition applies the same metric 

to all types of institutions, allowing consistent 

comparison across all types. 

should tailor regulatory and 

informational requirements to the size 

of entities, consistent with the 

objectives of a particular regulation and 

applicable statutes. The RFA generally 

requires an agency to prepare a 

regulatory flexibility analysis of any rule 

subject to notice and comment 

rulemaking requirements under the 

Administrative Procedure Act or any 

other statute unless the agency certifies 

that the rule will not have a ‘‘significant 

impact on a substantial number of small 

entities.’’ As noted in the RIA, the 

Department does not expect that the 

regulatory action will have a significant 

budgetary impact, but there are some 

costs to small institutions that are 

described in this Final Regulatory 

Flexibility Analysis. 

Description of the Reasons for Agency 

Action 

The Secretary is implementing final 

regulations to ensure students are well 

served by the institutions of higher 

education they attend and ensure that 

Federal Student Aid programs work in 

the best interests of students. New 

regulations for distance education will 

help the Department better measure and 

account for student outcomes, improve 

oversight over distance education, and 

ensure students are receiving effective 

education by requiring students’ 

distance education enrollment status. 

The R2T4 final regulations will increase 

the accuracy and simplicity of 

performing R2T4 calculations, add 

additional clarity to institutions on 

reporting, and codify longstanding 

policies. The Department has also not 

finalized several proposals that were 

included in the NPRM related to 

distance education, R2T4, and TRIO. 

Not finalizing these provisions 

significantly reduces estimated burden 

on small institutions. 

Succinct Statement of the Objectives of, 

and Legal Basis for, the Regulations 

Through these final regulations, the 

Department aims to address inadequate 

protections for students to ensure the 

Federal Student Aid programs work to 

accomplish postsecondary access and 

completion. This includes ensuring the 

Department, students, and families have 

the information needed to answer 

important questions about enrollment in 

and success with distance education. 

The Department’s authority to issue 

these regulations stems primarily from 

multiple statutory enactments: first, 20 

U.S.C. 1070–1099d (sections 400–499 of 

the HEA), which authorize the Federal 

government’s major student financial 

aid programs; second, 20 U.S.C. 1070(b) 

(section 400(b) of the HEA), which 

outlines the Secretary’s broad authority 

to carry out program requirements; 

third, the sections that govern the 

Department’s oversight responsibility 

under title IV 20 U.S.C. 1099c, 1099c– 

1, 1099c–2 (sections 498, 498A, and 

498B of the HEA); fourth, 20 U.S.C. 

1001–1003, which established higher 

education definitions under the HEA; 

and fifth, 20 U.S.C. 1221e–3 and 1231a, 

which establish the general authority 

and responsibilities of the Secretary of 

Education. 

Description of and, Where Feasible, an 

Estimate of the Number of Small 

Entities to Which the Regulations Will 

Apply 

The SBA defines ‘‘small institution’’ 

using data on revenue, market 

dominance, tax filing status, governing 

body, and population. All entities to 

which the Office of Postsecondary 

Education’s regulations apply are 

postsecondary institutions, however, 

which do not report such data to the 

Department. As a result, for purposes of 

these final regulations, the Department 

continues to define ‘‘small entities’’ by 

reference to enrollment, as it has done 

in other rulemakings, to allow 

meaningful comparison of regulatory 

impact across all types of higher 

education institutions in the for-profit, 

non-profit, and public sectors.46 The 

Department notes that enrollment and 

revenue are correlated for all IHES and 

that IHEs with higher enrollment tend to 

have the resources and infrastructure in 

place to more easily comply with the 

Department’s regulations in general and 

these final regulations in particular. 

Since enrollment data are more readily 

available to the Department for all IHEs, 

the Department has used enrollment as 

the basis to identify small IHEs in prior 

rulemakings and continues to use 

enrollment to identify small IHEs in 

these final regulations. This approach 

also allows the Department to use the 

same metric to identify small IHEs 

across the for-profit, non-profit, and 

public sectors, and it treats public IHEs 

operated at the behest of jurisdictions 

with a population of more than 50,000 

but with low enrollment as small, which 

the SBA’s standard would not treat as 

small. Lastly, the North American 

Industry Classification System (NAICS), 

under which SBA’s revenue standards 

in 13 CFR 121.201 are generally 

established, set different revenue 

thresholds for IHEs that provide 

different areas of instruction (e.g., 

cosmetology, computer training, and 

similar programs) and there is no 

existing data that aligns those different 

revenue standards to the different types 

of regulated institutions. Similarly, 

where an institution provides 

instruction in several of these areas, it 

is unclear which revenue threshold to 

apply for purposes of the Department’s 

RFA analysis. 

As explained above, the enrollmentbased size standard remains the most 

relevant standard for identifying all 

IHEs subject to these regulations. 

Therefore, instead of the SBA’s revenuebased size standard, which applies only 

to proprietary IHEs, the Department has 

defined ‘‘small IHE’’ as (1) a less-thantwo-year institution with an enrollment 

of fewer than 750 students, or (2) an atleast two-year but less-than-four-year 

institution, or a four-year institution, 

with enrollment of fewer than 1,000 

students.47 As a result of discussions 

with the SBA Office of Advocacy, this 

is an update from the standard used in 

some prior rules, such as the ‘‘Financial 

Value Transparency and Gainful 

Employment (GE), Financial 

Responsibility, Administrative 

Capability, Certification Procedures, 

Ability to Benefit (ATB),’’ published in 

the Federal Register on May 19, 2023, 

88 FR 32300, ‘‘Improving Income Driven 

Repayment for the William D. Ford 

Federal Direct Loan Program and the 

Federal Family Education Loan (FFEL) 

Program, published in the Federal 

Register on July 10, 2023, 88 FR 43820, 

and the final regulations, ‘‘Pell Grants 


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48 In those prior rules, at least two-year but lessthan-four-years institutions were considered in the 

broader two-year category. In this proposed rule, 

after consulting with the SBA Office of Advocacy, 

we separate this group into its own category. Based 

on this consultation, we have also increased the 

enrollment threshold for less-than-two-year 

institutions from 500 to 750 in order to treat a 

similar number of institutions as small under the 

alternative enrollment standard as would be 

captured under a revenue standard. 

49 2022 IPEDS downloaded from https://

nces.ed.gov/ipeds/datacenter/DataFiles.aspx. 

for Prison Education Programs; 

Determining the Amount of Federal 

Education Assistance Funds Received 

by Institutions of Higher Education (90/ 

10); Change in Ownership and Change 

in Control,’’ published in the Federal 

Register on October 28, 2022, 87 FR 

65426. Those prior regulations applied 

an enrollment standard for a small twoyear institution of less than 500 fulltime-equivalent (FTE) students and for a 

small 4-year institution, less than 1,000 

FTE students.48 The Department 

consulted with the SBA Office of 

Advocacy on the alternative standard 

for this rulemaking. The Department 

continues to believe this approach most 

accurately reflects a common basis for 

determining size categories that is 

linked to the provision of educational 

services and that it captures a similar 

universe of small entities as the SBA’s 

revenue standard. 

We note that the Department’s revised 

alternative size standard and the SBA’s 

revenue standard identify a similar 

number of total proprietary IHEs, with 

greater than 93 percent agreement 

between the two standards. Using the 

Department’s revised alternative size 

standard, approximately 61 percent of 

all IHEs would be classified as small for 

these purposes. Based on data from 

NCES, in 2022, small IHEs had an 

average enrollment of approximately 

289 students. In contrast, all other IHEs 

had an average enrollment of 

approximately 5,509 students. 

TABLE 1—NUMBER OF SMALL INSTITUTIONS UNDER ENROLLMENT-BASED DEFINITION

Small Total Percent 

Proprietary ................................................................................................................................... 2,072 2,285 91 

2-year .................................................................................................................................... 1,835 1,951 94 

4-year .................................................................................................................................... 237 334 71 

Private not-for-profit ..................................................................................................................... 990 1,818 54 

2-year .................................................................................................................................... 180 187 96 

4-year .................................................................................................................................... 810 1,631 50 

Public ........................................................................................................................................... 535 1,933 28 

2-year .................................................................................................................................... 453 1,128 40 

4-year .................................................................................................................................... 82 805 10 

Total ............................................................................................................................... 3,597 6,036 60 

Source: 2022 IPEDS data reported to the Department. 

In addition, the following tables show 

the breakdown of this 93 percent 

agreement, using institutional-level data 

relating to the 2,285 private for-profit 

IHEs that were identified using 2022 

IPEDS data.49 The enrollment size 

standard identifies 2,072 for-profit IHEs 

as small, and the revenue size standard 

identifies 2,043 for-profit IHEs as small, 

with a core of the same 1,917 for-profit 

IHEs identified as small under both 

standards. There are 156 IHEs that are 

only identified as small under the 

enrollment standard and 126 IHEs that 

are only identified as small under the 

revenue standard. Below are descriptive 

statistics of those for-profit IHEs 

identified as small by only one of the 

measures. 

Table 2 shows the distribution of 

revenues and the average enrollments of 

the 156 for-profit IHEs identified as 

small under only the enrollment size 

standard. A large majority of these forprofit IHEs do not have revenue data 

available in IPEDS. The average 

enrollment for this group with no 

revenue data available is 210 students. 

TABLE 2—SMALL IHES UNDER ENROLLMENT SIZE STANDARD ONLY

Revenue category Number of IHEs Average enrollment 

No Data .................................................................................................................................................. 149 210 

$35–40 million ........................................................................................................................................ 4 580 

$41–55 million ........................................................................................................................................ 2 696 

Above $55 million .................................................................................................................................. 1 320 

Total ................................................................................................................................................ 156 226 

Table 3 shows the distribution of 

enrollments and the average revenues of 

the 127 for-profit IHEs identified as 

small under only the revenue size 

standard. Six of these 127 IHEs do not 

have enrollment data available through 

IPEDS. There are 57 IHEs in the bin of 

‘‘1,000–1,249 students’’, which is 

closest to the enrollment threshold for 

for-profits, and average revenue for 

these IHEs is $13.3 million. To the 

extent that the final alternative size 

standard covers for-profit IHEs that 

would not otherwise be covered (and 

the revenue standard covers for-profit 

IHEs that would not be covered by the 

enrollment standard), the Department 

treats certain for-profit IHEs as small 

and others as not small because of the 

reasons for proposing an alternative size 

standard explained in this section 

above. 


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50Based on data reported for FY 2022 for ‘‘total 

revenue and other additions’’ for public institutions 

and ‘‘total revenues and investment return’’ for private not-for-profit and private for-profit 

institutions. 

TABLE 3—SMALL IHES UNDER REVENUE SIZE STANDARD ONLY

Enrollment category Number of IHEs Average revenue 

No Data .................................................................................................................................................. 6 $ 1,206,508 

1,000–1,249 students ............................................................................................................................ 57 13,269,753 

1,250–1,499 students ............................................................................................................................ 23 19,122,831 

1,500–1,749 students ............................................................................................................................ 13 19,247,730 

1,750–1,999 students ............................................................................................................................ 14 23,287,464 

Above 2,000 students ............................................................................................................................ 14 23,527,952 

Total ................................................................................................................................................ 127 16,606,901 

Tables 4 and 5 show the distribution 

of institution levels for for-profit IHEs 

identified as small by the enrollment 

size standard only and by the revenue 

size standard only, respectively. 

TABLE 4—LEVEL OF FOR-PROFIT IHES IDENTIFIED AS SMALL UNDER THE ENROLLMENT SIZE STANDARD ONLY

Level Number of IHEs 

Less than 2 years (below associate) ........................................................................................................................................... 73 

At least 2 but less than 4 years .................................................................................................................................................. 45 

Four or more years ...................................................................................................................................................................... 38 

Total ...................................................................................................................................................................................... 156 

TABLE 5—LEVEL OF FOR-PROFIT IHES IDENTIFIED AS SMALL UNDER THE REVENUE SIZE STANDARD ONLY

Level Number of IHEs 

Less than 2 years (below associate) ........................................................................................................................................... 50 

At least 2 but less than 4 years .................................................................................................................................................. 47 

Four or more years ...................................................................................................................................................................... 29 

Total ...................................................................................................................................................................................... 126 

Notably, the five states with the most 

IHEs that are identified as small under 

only the enrollment standard are 

California (34), Texas (15), Florida (13), 

New Jersey (7), and Puerto Rico (7). The 

five states with the most IHEs that are 

identified as small under only the 

revenue standard are California (28), 

Florida (18), Texas (11), Arizona (8), and 

Illinois (6). 

Description of the Projected Reporting, 

Recordkeeping, and Other Compliance 

Requirements of the Regulations, 

Including of the Classes of Small 

Entities That Will Be Subject to the 

Requirement and the Type of 

Professional Skills Necessary for 

Preparation of the Report or Record 

Based on the model described in the 

discussion of RIA, an IHE will see a 

minimum net increase in costs of 

approximately $4,729 in year 1 for all 

IHEs, as explained in more detail in the 

4.B. COSTS OF THE FINAL 

REGULATIONS section of this 

Regulatory Impact Analysis and 

included in the table below. We note 

that all these amounts are reduced from 

the NPRM due to the decision not to 

finalize several provisions. 

TABLE 6—ESTIMATED NET INCREASE IN COSTS

Category Year 1 

Reading and Understanding the New Rule ................................ $1,740 Total cost of $10,265,351 divided by the total institutions. 

Distance Education—Reporting and Disclosure of Information 1,705 Total cost of $10,057,889 divided by the total institutions. 

Return of Title IV Funds When a Student Withdraws ................ 1,284 Total cost of $7,573,504 divided by the total institutions. 

Total ..................................................................................... 4,729 

For purposes of assessing the impacts 

on small entities, the Department 

defines a ‘‘small IHE’’ as a less than twoyear IHE with an enrollment of less than 

750 FTE and two-year or four-year IHEs 

with an enrollment of less than 1,000 

FTE, based on official 2022 FTE 

enrollment. According to data from the 

IPEDS, in FY 2022, small IHEs had, on 

average, total revenues of approximately 

$8,691,634.50 Therefore, the Department 

estimates that the regulations will 

generate a net cost for small IHEs equal 

to approximately 0.5 percent of annual 

revenue. 


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502 Federal Register / Vol. 90, No. 2 / Friday, January 3, 2025 / Rules and Regulations 

TABLE 7—ESTIMATED NET INCREASE IN COSTS

Entities by sector Number of 

institutions 

Average total 

revenue 

Net cost 

percentage 

Private for-profit, 2-year ............................................................................................................... 473 $4,923,011 0.09 

Private for-profit, 4-year or above ............................................................................................... 237 9,204,127 0.05 

Private for-profit, less-than 2-year ............................................................................................... 1362 1,845,117 0.3 

Private not-for-profit, 2-year ......................................................................................................... 123 3,810,573 0.1 

Private not-for-profit, 4-year or above ......................................................................................... 810 13,268,232 0.03 

Private not-for-profit, less-than 2-year ......................................................................................... 57 2,030,589 0.2 

Public, 2-year ............................................................................................................................... 234 14,804,670 0.03 

Public, 4-year or above ............................................................................................................... 82 26,692,438 0.02 

Public, less-than 2-year ............................................................................................................... 219 3,477,191 0.1 

Grand Total ........................................................................................................................... 3,597 6,792,743 0.07 

According to data from IPEDS, 

approximately 371 small IHEs had total 

reported annual revenues of less than 

$472,900 for which the costs estimated 

above will potentially exceed 1 percent 

of total revenues. The average 

enrollment across these 371 small IHEs 

was 46 students. 

Identification, to the Extent Practicable, 

of All Relevant Federal Regulations That 

May Duplicate, Overlap, or Conflict 

With the Regulations 

The regulations will not conflict with 

or duplicate existing Federal 

regulations. 

Alternatives Considered 

As described in section 5 of the RIA 

above, in ‘‘Alternatives Considered’’, the 

Department considered several 

alternative provisions and approaches 

but rejected those alternatives for the 

reasons considered above. Most relevant 

to small entities were the alternatives to 

limit regulatory changes. For example, 

under R2T4, the Department proposed 

removing the 49 percent withdrawal 

exemption, which would in part 

eliminate observed confusion between 

this figure and the 60 percent 

completion requirement under the R2T4 

calculation and eliminate the continued 

need for significant guidance and 

training on how to determine whether a 

student qualifies for the exemption, 

thereby reducing institutional burden. 

Negotiators disagreed, however, stating 

that institutions had already updated 

systems and policies to account for the 

exemption and that it was serving 

students well. As a result, the 

Department eliminated the proposal. 

IX. Paperwork Reduction Act of 1995 

As part of its continuing effort to 

reduce paperwork and respondent 

burden, the Department provides the 

general public and Federal agencies 

with an opportunity to comment on 

proposed and continuing collections of 

information in accordance with the 

Paperwork Reduction Act of 1995 (PRA) 

(44 U.S.C. 3506(c)(2)(A)). This helps 

ensure that the public understands the 

Department’s collection instructions, 

respondents can provide the requested 

data in the desired format, reporting 

burden (time and financial resources) is 

minimized, collection instruments are 

clearly understood, and the Department 

can properly assess the impact of 

collection requirements on respondents. 

With the decision to not finalize the 

proposed amendments to the Federal 

TRIO programs and the proposal for 

institutions to take attendance in their 

distance education courses from these 

final regulations, we have determined 

that there are no new PRA implications 

for those provisions. 

Section 668.41 contains information 

collection requirements. Under the PRA, 

the Department has or will at the 

required time submit a copy of this 

section and Information Collection 

request to OMB for its review. A Federal 

agency may not conduct or sponsor a 

collection of information unless OMB 

approves the collection under the PRA 

and the corresponding information 

collection instrument displays a 

currently valid OMB control number. 

Notwithstanding any other provision of 

law, no person is required to comply 

with, or is subject to penalty for failure 

to comply with, a collection of 

information if the collection instrument 

does not display a currently valid OMB 

control number. In these final 

regulations, we display the control 

numbers assigned by OMB to any 

information collection requirements 

proposed in the NPRM and adopted in 

these final regulations. 

Section 668.22 Treatment of Title IV 

Funds When a Student Withdraws 

As described in the preamble, 

§ 668.22(b)(3)(ii) is not being finalized. 

There is no longer any burden 

associated with this regulation. The 

burden for the information collection 

1845–0022 will not be changed based on 

these final regulations. 

Section 668.41 Reporting and 

Disclosure of Information 

Requirements: The Department added 

a new paragraph § 668.41(h) that 

requires institutions to report their 

enrollment in distance education or 

correspondence courses. The 

Department expects that this provision 

will be implemented July 1, 2027. This 

change will provide the Department 

with expanded information to better 

answer questions about college access, 

persistence, and success, and to better 

inform student-centered policies. This 

reporting requirement also improves the 

Department’s ability to determine 

whether institutions have reached the 

50 percent threshold for distance 

education enrollment. When 

institutions enroll at least 50 percent of 

their students in distance education, 

offer at least 50 percent of their courses, 

or 50 percent of a program via distance 

education, they must obtain further 

accreditor approval beyond the initial 

approval to deliver distance education 

programs. 

Burden Hours: The final regulatory 

change adds burden for institutions. 

Because we expect to delay 

implementation of this new requirement 

until July 1, 2027, we are not estimating 

the burden for implementation of these 

regulations at this time. As development 

of the reporting mechanism progresses, 

a separate information collection will be 

submitted for full public comment 

closer to implementation of the data 

collection, incorporating more useful 

and specific information. 

Consistent with the discussions 

above, the following chart describes the 

sections of the final regulations 

involving information collections, the 

information being collected and the 

collections that the Department will 

submit to OMB for approval and public 

comment under the PRA, and the 

estimated costs associated with the 


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Federal Register / Vol. 90, No. 2 / Friday, January 3, 2025 / Rules and Regulations 503 

information collections. The monetized 

net cost of the increased burden for 

institutions, lenders, guaranty agencies 

and students, using wage data 

developed using Bureau of Labor 

Statistics (BLS) data. For institutions the 

Department is using the median hourly 

wage for Education Administrators, 

Postsecondary, $49.33 per hour 

according to BLS. https://www.bls.gov/ 

oes/current/oes119033.htm. 

COLLECTION OF INFORMATION

Regulatory section Information collection OMB control No. and estimated burden Estimated cost 

$49.33 per entity 

§ 668.41 ................. The Department adds a new paragraph (h) that 

requires institutions to report their enrollment 

in distance education or correspondence 

courses. The Department plans to implement 

this provision July 1, 2027.

None—will develop closer to implementation.

Intergovernmental Review 

This program is subject to Executive 

Order 12372 and the regulations in 34 

CFR part 79. One of the objectives of the 

Executive Order is to foster an 

intergovernmental partnership and a 

strengthened Federalism. The Executive 

order relies on processes developed by 

State and local governments for 

coordination and review of final Federal 

financial assistance. 

This document provides early 

notification of our specific plans and 

actions for this program. 

Assessment of Education Impact 

In the NPRM we requested comments 

on whether the proposed regulations 

would require transmission of 

information that any other agency or 

authority of the United States gathers or 

makes available. Based on the response 

to the NPRM and on our review, we 

have determined that these final 

regulations do not require transmission 

of information that any other agency or 

authority of the United States gathers or 

makes available. 

Federalism 

Executive Order 13132 requires us to 

provide meaningful and timely input by 

State and local elected officials in the 

development of regulatory policies that 

have Federalism implications. 

‘‘Federalism implications’’ means 

substantial direct effects on the States, 

on the relationship between the 

National Government and the States, or 

on the distribution of power and 

responsibilities among the various 

levels of government. These final 

regulations do not have Federalism 

implications. 

Accessible Format: On request to one 

of the program contact persons listed 

under FOR FURTHER INFORMATION

CONTACT, individuals with disabilities 

can obtain this document in an 

accessible format. The Department will 

provide the requestor with an accessible 

format that may include Rich Text 

Format (RTF) or text format (txt), a 

thumb drive, an MP3 file, braille, large 

print, audiotape, compact disc, or other 

accessible format. 

Electronic Access to This Document: 

The official version of this document is 

the document published in the Federal 

Register. You may access the official 

edition of the Federal Register and the 

Code of Federal Regulations at 

www.govinfo.gov. At this site you can 

view this document, as well as all other 

Department documents published in the 

Federal Register, in text or in Portable 

Document Format (PDF). To use PDF 

you must have Adobe Acrobat Reader, 

which is available at no cost to the user 

at the site. 

You may also access Department 

documents published in the Federal 

Register by using the article search 

feature at www.federalregister.gov. 

Specifically, through the advanced 

search feature at this site, you can limit 

your search to documents published by 

the Department. 

List of Subjects 

34 CFR Part 600 

Colleges and universities, Foreign 

relations, Grant programs—education, 

Loan programs—education, Reporting 

and recordkeeping requirements, 

Selective Service System, Student aid, 

Vocational education. 

34 CFR Parts 643 and 644 

Colleges and universities, Education 

of disadvantaged, Elementary and 

secondary education, Grant programs— 

education, Reporting and recordkeeping 

requirements, Student aid. 

34 CFR Part 645 

Colleges and universities, Education 

of disadvantaged, Elementary and 

secondary education, Grant programs— 

education, Reporting and recordkeeping 

requirements, Veterans. 

34 CFR Parts 647 

Colleges and universities, Education 

of disadvantaged, Grant programs— 

education, Reporting and recordkeeping 

requirements. 

34 CFR Part 668 

Administrative practice and 

procedure, Aliens, Colleges and 

universities, Consumer protection, 

Grant programs—education, Loan 

programs—education, Reporting and 

recordkeeping requirements, Selective 

Service System, Student aid, Vocational 

education. 

Miguel Cardona, 

Secretary of Education. 

For the reasons discussed in the 

preamble, the Secretary of Education 

amends parts 600, 643, 644, 645, 647, 

and 668 of title 34 of the Code of 

Federal Regulations as follows: 

PART 600—INSTITUTIONAL 

ELIGIBILITY UNDER THE HIGHER 

EDUCATION ACT OF 1965, AS 

AMENDED 

■ 1. The authority citation for part 600 

continues to read as follows: 

Authority: 20 U.S.C. 1001, 1002, 1003, 

1088, 1091, 1094, 1099b, and 1099c, unless 

otherwise noted. 

■ 2. Amend § 600.2 by adding, in 

alphabetical order, a definition of 

‘‘Distance education course’’ to read as 

follows: 

§ 600.2 Definitions. 

* * * * * 

Distance education course: A course 

in which instruction takes place 

exclusively as described in the 

definition of distance education in this 

section notwithstanding in-person noninstructional requirements, including 

orientation, testing, and academic 

support services. 

* * * * * 


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504 Federal Register / Vol. 90, No. 2 / Friday, January 3, 2025 / Rules and Regulations 

PART 643—TALENT SEARCH 

■ 3. The authority citation for part 643 

continues to read as follows: 

Authority: 20 U.S.C. 1070a–11 and 1070a– 

12, unless otherwise noted. 

■ 4. Amend § 643.3 by revising 

paragraphs (a)(1)(iv) and (v) to read as 

follows: 

§ 643.3 Who is eligible to participate in a 

project? 

(a) * * * 

(1) * * * 

(iv) Is a permanent resident of Guam, 

or the Northern Mariana Islands; or 

(v) Is a resident of the Freely 

Associated States—the Federated States 

of Micronesia, the Republic of the 

Marshall Islands, or the Republic of 

Palau. 

* * * * * 

PART 644—EDUCATIONAL 

OPPORTUNITY CENTERS 

■ 5. The authority citation for part 644 

continues to read as follows: 

Authority: 20 U.S.C. 1070a–11 and 1070a– 

16, unless otherwise noted. 

■ 6. Amend § 644.3 by revising 

paragraphs (a)(1)(iv) and (v) to read as 

follows: 

§ 644.3 Who is eligible to participate in a 

project? 

(a) * * * 

(1) * * * 

(iv) Is a permanent resident of Guam, 

or the Northern Mariana Islands; or 

(v) Is a resident of the Freely 

Associated States—the Federated States 

of Micronesia, the Republic of the 

Marshall Islands, or the Republic of 

Palau. 

* * * * * 

PART 645—UPWARD BOUND 

PROGRAM 

■ 7. The authority citation for part 645 

continues to read as follows: 

Authority: 20 U.S.C. 1070a–11 and 1070a– 

13, unless otherwise noted. 

■ 8. Amend § 645.3 by: 

■ a. Removing the periods at the end of 

paragraphs (a)(1) through (3) and 

adding, in each place, ‘‘; or’’. 

■ b. Revising paragraph (a)(4). 

The revision reads as follows: 

§ 645.3 Who is eligible to participate in an 

Upward Bound project? 

* * * * * 

(a) * * * 

(4) Is a permanent resident of Guam, 

or the Northern Mariana Islands; or 

* * * * * 

PART 647—RONALD E. MCNAIR 

POSTBACCALAUREATE 

ACHIEVEMENT PROGRAM 

■ 9. The authority citation for part 647 

continues to read as follows: 

Authority: 20 U.S.C. 1070a–11 and 1070a– 

15, unless otherwise noted. 

■ 10. Amend § 647.3 by revising 

paragraph (a)(4) to read as follows: 

§ 647.3 Who is eligible to participate in a 

McNair project? 

* * * * * 

(a) * * * 

(4) Is a permanent resident of Guam, 

or the Northern Mariana Islands; or 

* * * * * 

PART 668—STUDENT ASSISTANCE 

GENERAL PROVISIONS 

■ 11. The authority citation for part 668 

continues to read as follows: 

Authority: 20 U.S.C. 1001–1003, 1070g, 

1085, 1088, 1091, 1092, 1094, 1099c, 1099c1, 1221e-3, and 1231a, unless otherwise 

noted. 

■ 12. Amend § 668.22 by: 

■ a. Removing ‘‘and’’ at the end of 

paragraph (a)(2)(ii)(A)(4). 

■ b. Removing the period at the end of 

paragraph (a)(2)(ii)(A)(5) and adding, in 

its place, ‘‘; and’’. 

■ c. Adding new paragraph 

(a)(2)(ii)(A)(6). 

■ d. Revising paragraph (b)(2). 

■ e. Revising paragraphs (d)(1)(vii) and 

(f)(1)(ii)(A). 

■ f. Revising paragraph (l)(9). 

The revisions and addition read as 

follows: 

§ 668.22 Treatment of title IV funds when 

a student withdraws. 

(a) * * * 

(2) * * * 

(ii) * * * 

(A) * * * 

(6) A student is not considered to 

have withdrawn if— 

(i) The institution’s records treat a 

student as having never attended 

courses for that payment period or 

period of enrollment; 

(ii) The institution returns all the title 

IV grant or loan assistance, including all 

title IV credit balances provided to the 

student or parent, that were disbursed 

for that payment period or period of 

enrollment; 

(iii) The institution refunds all 

institutional charges to the student for 

the payment period or period of 

enrollment; and 

(iv) The institution writes off or 

cancels any payment period or period of 

enrollment balance owed by the student 

to the institution due to the institution’s 

returning of title IV funds to the 

Department. 

* * * * * 

(b) * * * 

(2) An institution must, within 14 

days of a student’s last date of 

attendance, document a student’s 

withdrawal date determined in 

accordance with paragraph (b)(1) of this 

section and maintain the documentation 

as of the date of the institution’s 

determination that the student 

withdrew. 

* * * * * 

(d) * * * 

(1) * * * 

(vii) Except for a clock-hour or nonterm credit hour program, a 

subscription-based program, or an 

eligible prison education program, upon 

the student’s return from the leave of 

absence, the student is permitted to 

complete the coursework he or she 

began prior to the leave of absence; and 

* * * * * 

(f) * * * 

(1) * * * 

(ii) * * * 

(A) In the case of a program that is 

measured in clock hours, by dividing 

the total number of clock hours in the 

payment period or period of enrollment 

into the number of clock hours 

scheduled to be completed since the 

student began attendance in the 

payment period or period of enrollment 

as of the student’s withdrawal date. 

* * * * * 

(l) * * * 

(9) A student in a program offered in 

modules is scheduled to complete the 

days in a module only when a student 

begins attendance in the module. 

* * * * * 

■ 13. Amend § 668.41 by adding 

paragraph (h) to read as follows: 

§ 668.41 Reporting and disclosure of 

information. 

* * * * * 

(h) Reporting of student enrollment in 

distance education or correspondence 

courses. For each recipient of title IV, 

HEA assistance at the institution, the 

institution must report to the Secretary, 

in accordance with procedures 

established by the Secretary, the 

recipient’s enrollment in distance 

education or correspondence courses. 

[FR Doc. 2024–31031 Filed 12–30–24; 8:45 am] 

BILLING CODE 4000–01–P 


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