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Federal Update – May 29

Federal Update – May 29

GOVERNMENT RELATIONS HIGHLIGHTS

  • DCL on Certification Procedures: The Department of Education published a Dear Colleague Letter summarizing institutional obligations pursuant to the Final Rules on Financial Responsibility, Administrative Capability, Certification Procedures and Ability to Benefit (“ATB”).
  • Certification Procedures FAQ: The Department of Education released an Electronic Announcement (“EA”) addressing FAQs related to the new Financial Responsibility and Certification Procedures (including clock hour program length limitations) set to go into effect on July 1, 2024. 
  • FVT/GE Reporting User Guide: The Department of Education published Volume 1 of the NSLDS FVT/GE User Guide. The User Guide is intended to assist institutions comply with the October 1, 2024 FVT/GE reporting deadlines.

DEAR COLLEAGUE LETTER – CERTIFICATION PROCEDURES

Why This is Important To You

The Final Rules on Financial Responsibility, Administrative Capability, Certification Procedures and Ability to Benefit (“ATB”) will impact institutions of higher education. On May 16, 2024, the Department of Education published a Dear Colleague Letter summarizing these changes. The regulations will take effect on July 1, 2024.

What You Need to Know

The Department’s Dear Colleague Letter provides a summary of the requirements that the Department is implementing for the 2024-25 Award Year. For each of the new regulations, the Department identifies the modifications in the Final Rule compared to the previous iterations. Of particular note, the Department has revised the certification process in order to “create a more rigorous process for certifying institutions to participate in the Title IV, HEA programs.” The Final Rule revises a previous requirement that imposed a maximum length for Title IV clock-hour programs. The Final Rule limits the amount of allowed clock hours for these programs from 150% of the state minimum in which the institution is located to 100% of the state minimum in which the institution is located, or another state under limited circumstances. The Department stated that it will use “enforcement discretion” in implementing this rule,

As announced in Electronic Announcement GE-24-03, the Department understands that there may be circumstances outside of an institution’s control that may prevent compliance with the new requirements under § 668.14(b)(26) and § 668.14(b)(32) by July 1, 2024. However, the Department believes that most of those concerns and challenges will have been resolved or sufficiently mitigated by January 1, 2025. The Department has enforcement discretion with respect to an institution’s compliance with certain Title IV, HEA requirements. Given the concerns received from institutions and States, particularly for the period between July 1, 2024, and January 1, 2025, we will consider exercising this discretion before taking action regarding these two provisions.

AACS has assisted in drafting and circulating a bipartisan letter that requests the Department of Education to postpone the effective date of the 150% rule to July 1, 2025.

For more information:

Dear Colleague Letter
Bipartisan Letter

DEPARTMENT GUIDANCE ON CERTIFICATION PROCEDURES

Why This is Important to You

On May 20, the Department of Education released an Electronic Announcement (“EA”) addressing FAQs related to the new Financial Responsibility and Certification Procedures (including clock hour program length limitations) set to go into effect on July 1, 2024. 

What You Need to Know

The Department’s EA contains two sets of Frequently Asked Questions (“FAQs”) providing additional guidance on the Financial Responsibility and Certification Procedures Final Rules.  These rules take effect on July 1, 2024. The Department indicated that it will add future FAQs to its website as it receives additional questions.

The EA includes a number of questions related to the revised 100% Certification Rule, 34 CFR 668.14(b)(26). Among the key questions are the following:

GEPH-Q1: If an institution does not want to reduce the number of hours in a program to the minimum required by their State, is it permitted to only consider part of the program to be Title IV eligible? For example, if the minimum number of hours required by the State is 1,530 hours, but a program has 1,545 hours, can Title IV funds be used to cover only up to the 1,530 hours? Or are schools required to reduce the number of hours to the state’s minimum number of hours in order for the program to remain Title IV eligible?

GEPH-A1: No. Institutions cannot partially fund programs with Title IV funds. In order to maintain Title IV eligibility, 34 CFR 668.14(b)(26)(ii) requires institutions to reduce the number of credit or clock hours in their GE program to the State’s minimum number of hours. GE programs that exceed these length restrictions by any amount are ineligible in their entirety for Title IV funds.

GEPH-Q3: What happens if a State’s licensure requirement is lower than the minimum number of hours required by an institution’s accrediting agency? For example, if the minimum number of credits required by the State is 500 hours but the accrediting agency requires 600 hours for the same program, must the school then limit the program to the minimum required by the State even if means the program loses its accreditation and, therefore, it’s Title IV eligibility?

GEPH-A3: As stated in 34 CFR 668.14(b)(26)(ii)(A), the State’s minimum number of hours required for training in the recognized occupation is the limit for the number of hours a program may include. The regulations do not account for limitations set by the accrediting agency. In this case, either the accrediting agency or the State would need to change their requirements to meet the State’s minimum number of clock hours, credit hours, or the equivalent for the program to maintain its Title IV eligibility.

GEPH-Q4: Can an institution submit a program for updated program length approval or acknowledgement by the Department before it receives approval from its accrediting agency and State?

GEPH-A4: No. If an institution’s accrediting agency and/or State requires the institution to receive approval prior to making the program length change, the institution must obtain those approvals before submitting the program to the Department for approval or acknowledgement.

For more information:

Department Announcement
Certification Procedure FAQ

FVT/GE USER GUIDE

Why This is Important To You

The Department of Education published Volume 1 of the Financial Value Transparency and Gainful Employment (FVT/GE) User Guide. The User Guide is intended to assist institutions comply with the October 1, 2024 FVT/GE reporting deadlines. Institutions must submit the data no later than the October 1, 2024 deadline. All institutions should review Volume 1 of the User Guide and be on the lookout for future installments of the User Guide, which will be published in the coming months.

What You Need to Know

Volume 1 of the NSLDS FVT/GE User Guide focuses on the batch reporting of student information via the Student Aid Internet Gateway (SAIG) to the National Student Loan Data System (NSLDS®). Volume 1 provides schools with details on the record types and descriptions for the FVT/GE Student Batch Submittal File.  It also contains information on Header and Trailer details, file formats, data elements and definitions, error codes and descriptions, and details about the FVT/GE File-Level Error File and the FVT/GE Error/Acknowledgement File.

For more information:

Department Electronic Announcement
Volume 1 of User Guide

DEPARTMENT UPDATE ON REPROCESSING OF FAFSA RECORDS

Why This is Important to You

The Department published an Electronic Announcement providing updates on its reprocessing of FAFSA applications. The Electronic Announcement is intended to provide additional guidance to institutions that received notice that their ISIR forms were being reprocessed.

The Department has now transmitted the ISIRs from approximately 9.7 million FAFSA forms to schools, states, and designated scholarship organizations. In addition, over 1.5 million corrections have been successfully processed.

What You Need to Know

In contrast to its April 10 Electronic Announcement, the Department advises that institutions should no longer rely on the school- or state-specific data files that were previously provided to institutions in order to identify impacted records due to FPS or IRS FA-DDX reprocessing. The Department stated that “if reprocessing a 2024-25 FAFSA record would not have resulted in an updated ISIR, we did not reprocess that record or send a subsequent transaction.”

For more information: 

Department Electronic Announcement

CFPB ENFORCEMENT ACTION AGAINST WESTERN BENEFITS

Why This is Important to You

Under the Consumer Financial Protection Act, the Consumer Financial Protection Bureau (“CFPB”) has the authority to take action against institutions violating consumer financial laws, including engaging in unfair, deceptive, or abusive acts or practices. In this instance, CFPB took action against a company providing loan debt relief services.

What You Need to Know

The CFPB took action against Western Benefits Group for charging illegal advance fees for student loan debt relief services and misrepresenting to consumers that advance fees would go toward paying down their loans. Western Benefits additionally misrepresented that it was affiliated with and endorsed by the Department of Education. The CFPB is ordering Western Benefits to permanently cease operations and pay a $400,000 penalty to be deposited in the CFPB’s victims relief fund. The order also rescinds all existing agreements with consumers.

For more information:

CFPB Press Release

For More Information

If you have any questions about this Update, please email info@beautyschools.org.

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State Update – June 4

The first week of the June finds only 14 state legislatures actively meeting. Recent and upcoming legislative adjournments include Louisiana on June 3 and New York on June 6. 

Another four states – Arizona, Delaware, New Hampshire and Rhode Island – will be adjourning their respective 2024 legislative sessions at the end of the month.

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