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Proposed Rule on Program Integrity and Institutional Quality Sent to OIRA

Proposed Rule on Program Integrity and Institutional Quality Sent to OIRA

What You Need To Know

Yesterday, the Department of Education submitted its Proposed Rule on Program Integrity and Institutional Quality to the Office of Management and Budget (“OMB”) to the Office of Management and Budget’s Office of Information and Regulatory Affairs (“OIRA”) for approval. The Proposed Rule includes regulations on the following topics: Distance Education, Return of Title IV, HEA Funds, and Federal TRIO Programs. OIRA may review the Proposed Rule for up to ninety days, with a possibility to extend the review period to one-hundred and twenty days.

The draft language for the Proposed Rule was formed via the Negotiated Rulemaking Committee process, which held three sessions between January and March, 2024. The Department considered two proposals that particularly impact AACS members: (i) disallow asynchronous distance learning in clock hour programs that participate in Title IV federal student aid programs; and (ii) the exclusion of books and supplies (which includes kits for beauty and wellness institutions) from the definition of “tuition, fees and institutionally provided food and housing.” The negotiators did not reach consensus on either issue. In the Negotiated Rulemaking process, once negotiations have concluded, if consensus language is reached on a particular provision, the Department is required to use that regulatory language in its Notice of Proposed Rulemaking (“NPRM”). As consensus was not reached, the Department may use regulatory language developed during the negotiations as the basis for its NPRM, or develop new regulatory language for all or a portion of its NPRM.

During OIRA’s review of the Proposed Rule, the public has the option to request a meeting with OIRA. This provides interested parties with the opportunity to discuss issues with the Proposed Rule. Following this review period, the Department will publish its NPRM in the Federal Register and invite the public to comment on the draft language.

Why This is Important to You

The two provisions referenced above may significantly impact AACS member institutions. As to the regulation on asynchronous distance learning, those cosmetology schools that have incorporated asynchronous distance learning into their programs will lose that flexibility.

The proposed changes to the definitions of “books and supplies” prohibits institutions from automatically charging students for books and supplies without initially providing students with an option to purchase these items from a third-party. Students will still have the option to “opt-in” and purchase the items directly from the institution.

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