FEDERAL PROGRAM INTEGRITY REGULATIONS

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FEDERAL PROGRAM INTEGRITY REGULATIONS

• Spring 2011
• Webinar Series
• Webinar 1

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PI REGS AGENDA

• Background
• Definition of a Credit Hour 600.2, 602.24
• Clock/Credit Hour Conversion 668.8
• Adding New Programs 600.10, 600.20
• Incentive Compensation 668.14

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PI REGS BACKGROUND

• US Department of Education held regional hearings
  in 2009 to solicit public input
• USED formed two Negotiated Rulemaking Committees
• Team One focused on Program Integrity
• Meetings in 11/09, 12/09, 01/10
•  
•  14 issuescommittee did not reach consensus

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PI REGS BACKGROUND

• These regulations do not implement legislation
• Administrations agenda
• Two NPRMs
• 06/18/10 - Program Integrity Regulations
• 07/26/10 - Gainful Employment Regulations
•  

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PI REGS BACKGROUND

• Final Regs 10/29/10
• Effective 07/01/11
• Program Integrity Regs
• DCL GEN-11-05 and DCL GEN-1106
• Gainful EmploymentAdding New Programs
• Gainful Employment final regs not yet published
• USED estimates late March 2011
• Earliest effective date is 07/01/12

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PI REGS DEFINITION OF A CREDIT HOUR

• Establishes a minimum basis for a credit hour
• Used to determine eligibility for and amount of
  federal financial aid
• Applies to all credit hour educational programs
  at all Title IV eligible programs
• Includes degrees
• Includes programs offered via distance education,
  in whole or in part

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PI REGS DEFINITION OF A CREDIT HOUR

• Institution can use different measure for
  academic purposes
• ACCET uses 15/30/451 for semester credits,
  10/20/301 for quarter credits
• Some states mandate a clock/credit hour
  conversion ratio

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PI REGS DEFINITION OF A CREDIT HOUR

• In 34 CFR 600.2, a credit hour is defined as
• an amount of work represented in intended
  learning outcomes and verified by evidence of
  student achievement that is an institutionally
  established equivalency that reasonably
  approximates not less than--

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PI REGS DEFINITION OF A CREDIT HOUR

• (1) One hour of classroom or direct faculty
  instruction and a minimum of two hours of out of
  class student work each week for approximately
  fifteen weeks for one semester or trimester hour
  of credit, or ten to twelve weeks for one quarter
  hour of credit, or the equivalent amount of work
  over a different amount of time or

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PI REGS DEFINITION OF A CREDIT HOUR

• (2) At least an equivalent amount of work as
  required in paragraph (1) of this definition for
  other academic activities as established by the
  institution including laboratory work,
  internships, practica, studio work, and other
  academic work leading to the award of credit
  hours.

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PI REGS DEFINITION OF A CREDIT HOUR

• Accrediting agency requirements (602.24)
  
• As part of initial accreditation or renewal of
  accreditation, the agency is required to conduct
  an effective review and evaluation of the
  reliability and accuracy of the institutions
  assignment of credit hours. The agency meets
  this requirement if it

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PI REGS DEFINITION OF A CREDIT HOUR

• Reviews the institutions policies and procedures
  for assigning credit hours
• Reviews the application of the policies and
  procedures to the institutions programs and
  courses
• Makes a reasonable determination of whether the
  institutions assignment of credit hours conforms
  to commonly accepted practice in higher education

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PI REGS DEFINITION OF A CREDIT HOUR

• The accrediting agency
• May use sampling or other methods in this
  evaluation
• Must take actions it deems appropriate to address
  deficiencies it identifies as part of its review
  and evaluation
• Must promptly notify the USED if it detects
  systemic noncompliance with the agencys policies
  or significant noncompliance regarding one or
  more of the institutions programs

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PI REGS DEFINITION OF A CREDIT HOUR

• If an institutions accreditor is not compliant
  by 07/01/11, the institution must apply the
  mandatory clock/credit hour conversion ratio in
  668.8(l)(1)
• ACCET Document 15
• Drafted following the December 2010 Commission
  meeting
• Will be reviewed and finalized at April 2011
  meeting

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PI REGS CLOCK/CREDIT HOUR CONVERSION

• Eligible program offered in credit hours--668.8
• At least a two year program that leads to an
  associate degree, bachelors degree, professional
  degree, or equivalent degree OR
• Each course within the program is acceptable for
  full credit toward a degree offered by the
  institution OR
• Institution uses the clock/credit hour formula
  contained in 668.8 paragraph (l)

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PI REGS CLOCK/CREDIT HOUR CONVERSION

• Courses fully acceptable toward a degree
• The degree requires at least two academic years
  of study AND
• The institution demonstrates that students enroll
  in, and graduate from, the degree program.
• Adding certificate/diploma and degree at the same
  time
• Certificate/diploma cannot use this option until
  the degree program has graduates

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PI REGS CLOCK/CREDIT HOUR CONVERSION

• Exception a program is considered to be a clock
  hour program for Title IV purposes if
• The program is required to measure student
  progress in clock hours when receiving federal or
  state approval or licensure to offer the program
  OR
• Completing clock hours is a requirement for
  graduates to apply for licensure or the
  authorization to practice the occupation that the
  student is intending to pursue OR

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PI REGS CLOCK/CREDIT HOUR CONVERSION

• The credit hours awarded by the institution for
  the program are not in compliance with 600.2 OR
• The institution does not provide the clock hours
  that are the basis for the credit hours awarded
  for the program and requires attendance in the
  clock hours on which the credit hours are based,
  except under the excused absence policy in
  668.4(e)
• Does not apply if a limited component of the
  program must include a minimum number of clock
  hours

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PI REGS CLOCK/CREDIT HOUR CONVERSION

• From the comments
• . . .an institution must require attendance in
  the clock hours that are the basis for credit
  hours awarded, except as provided in current
  668.4(e). . .These programs are still required
  to contain the clock hours that support the
  conversion under the regulations, and
  institutions are expected to make sure that those
  clock hours are completed by students, subject to
  the institutions existing policies for excused
  absences and make-up classes.

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PI REGS CLOCK/CREDIT HOUR CONVERSION

• 668.4(e) an institution does not have to
  require that students make up excused absences if
• The institution has a written policy that permits
  excused absences and
• The number of excused absences does not exceed
  the lesser of
• The accrediting agencys policy on excused
  absences or
• The state agencys policy on excused absences or
• 10 of the clock hours in the payment period

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PI REGS CLOCK/CREDIT HOUR CONVERSION

• An institution should ensure that students
  taking a program in credit hours are still
  completing the clock hours associated with the
  conversion, and excused absences from the classes
  should be within the tolerance permitted in the
  clock hour regulations.
• These programs can be offered in credit hours for
  academic or other purposes, even though they must
  be measured in clock hours for financial aid

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PI REGS CLOCK/CREDIT HOUR CONVERSION

• 668.8(l) formula
• 37.51 for semester credit hours
• (under current regulations, 301)
• 251 for quarter credit hours
• (under current regulations, 201)

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PI REGS CLOCK/CREDIT HOUR CONVERSION

• OR less than 37.51 or 251 IF
• The accrediting agency has not identified any
  deficiencies in the institutions policies and
  procedures, or their implementation, for
  determining credit hours AND
• the clock hours of in-class instruction combined
  with the out-of-class student work equal or
  exceed the 37.51 or 251 (900 clock hours for
  one academic year) AND
• the institutions conversion uses at least 301
  for semester credits or 201 for quarter credits

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PI REGS CLOCK/CREDIT HOUR CONVERSION

• GEN-11-06
• Published March 18, 2011
• Provides background on why the USED developed
  these regulationsIG reviews at 3 of 7 regional
  accrediting agencies found the oversight of
  institutional credit hour assignment
  insufficientthese 3 agencies account for more
  than 70 of all federal student aid

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PI REGS CLOCK/CREDIT HOUR CONVERSION

• USED is explicitly providing institutions the
  flexibility to demonstrate alternative methods of
  measuring student learning--the key is
  verifiable student achievement of
  institutionally established learning outcomes
• Credits may be awarded on the basis of
  documentation of the amount of work a typical
  student is expected to complete within a
  specified amount of academically engaged time, or
  on the basis of documented student learning
  calibrated to that amount of academically engaged
  time for a typical student.

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PI REGS CLOCK/CREDIT HOUR CONVERSION

• For 2011-2012, if a school is in the process of
  complying with these requirements, the USED will
  consider the institution to be making a
  good-faith effort, and Department staff will
  take this effort into consideration when
  reviewing an institutions or accrediting
  agencys implementation of the regulations.

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PI REGS CLOCK/CREDIT HOUR CONVERSION

• Guidance for accrediting agencies in the DCL
• Not expected to review every course and related
  documentation agency is to review the policies
  and procedures that the institution uses to
  assign credit hours, and to review the
  application by a sampling of the institutions
  degree and nondegree programs to encompass a
  variety of academic activities, disciplines, and
  delivery modes.

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PI REGS CLOCK/CREDIT HOUR CONVERSION

• ACCET Proposed Credit Hour/Clock Hour Policy.
• Example of a Lesson Plan with homework hours
  how they relate to the credit hour conversion.
• Example of a Grade Sheet showing how homework
  hours impact the overall module grade.

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PI REGS CLOCK/CREDIT HOUR CONVERSION

• Medical Assisting (MA) Program example
• 810 clock hours over 36 weeks
• First 30 weeks is ½ lecture, ½ lab, total of 690
  hours
• Classes meet 5 days a week, approximately
  4.5 hours per day for classroom portion
• Last 6 weeks is 120 hours of externship
• Program is 37 academic credit hours for ACCET

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PI REGS CLOCK/CREDIT HOUR CONVERSION

• Medical Assisting (MA) Program example
• School wants to use 301 semester credit hour
  conversion (instead of 37.51) for financial aid
  credit hours
• New regs require MINIMUM of 900 total hours of
  in-class and out-of-class work, so homework
  MINIMUM is 90 hours

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PI REGS CLOCK/CREDIT HOUR CONVERSION

• Medical Assisting (MA) Program example
• Institutions policies require documentation of
  homework for lecture and lab hours (no assigned
  homework for externship hours)
• Program includes 690 clock hours of lecture/lab,
  which equates to 23 FA semester credits
• 23 x 7.5 hours of outside of class work
  172.50 presumably will comply with ACCET Document
  15

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PI REGS CLOCK/CREDIT HOUR CONVERSION

• Medical Assisting (MA) Program example
• How does this work for the student?
• 172.5 hours of homework over 30 classroom weeks
  is 5.75 hours per week of homework, or 1.15 hours
  per night on average
• School is documenting actual homework now, and
  estimates total homework hours will be between
  200 and 300 hours for this MA program

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GE REGS ADDING NEW PROGRAMS

• Separate final regs published 10/29/10
• Remaining issues of GE regulations
• Final regs yet to be published
• Anticipated date is late March 2011
• USED received over 90,000 comments to NPRM
• Implements GE new program regs 07/01/11
• These interim requirements will remain in place
  until performance based standards can be
  implemented for approving additional programs
  using gainful employment measures

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GE REGS ADDING NEW PROGRAMS

• USEDs position
• the Department is concerned that some
  institutions might attempt to circumvent the
  proposed gainful employment standards. . .by
  adding new programs before those standards take
  effect.
• BUTfor most schools with good records
  administering their programs, new programs will
  meet the requirements and will not need to be
  approved by the USED

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GE REGS ADDING NEW PROGRAMS

• Schools must notify USED of intent to add new
  gainful employment programs (668.8(c)(3) or (d))
• These programs must lead to gainful employment in
  order to be eligible for Title IV aid
• All certificate and diploma programs all degree
  programs at for-profit schools (ex. BA in liberal
  arts)
• Notice must be submitted at least 90 days before
  the first date of classes
• School must include the date of the first day of
  class of the new program

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GE REGS ADDING NEW PROGRAMS

• Notice must describe how
• The institution determined the need for the
  program
• The program was designed to meet local market
  needs (or for online programs, regional or
  national market needs)
• The program was reviewed or approved by, or
  developed in conjunction with, business advisory
  committees, program integrity boards, public or
  private oversight or regulatory agencies, and
  businesses that would likely employ graduates of
  the program.

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GE REGS ADDING NEW PROGRAMS

• Notice must include
• Documentation of approval from accrediting agency
• Description of any wage analysis it may have
  performed, including any consideration of BLS
  wage data that is related to the new program.
• Information that describes how the program would
  be offered in connection with, or in response to,
  an initiative by a governmental entity

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GE REGS ADDING NEW PROGRAMS

• USED will
• Notify the school at least 30 days before the
  first day of class if the program is required to
  be approved, and treat the schools notice of the
  program addition as an application for the
  program
• Review the program notice or application taking
  into consideration the following factors
• The institutions demonstrated financial
  responsibility and administrative capability in
  operating its existing programs,

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GE REGS ADDING NEW PROGRAMS

• Whether the additional educational program is one
  of several new programs that will replace similar
  programs currently provided by the institution,
  as opposed to supplementing or expanding the
  current programs provided by the institution,
• Whether the number of additional educational
  programs being added is inconsistent with the
  institutions historic program offerings, growth,
  and operations, and
• Whether the process and determination by the
  institution to offer an additional educational
  program that leads to gainful employment in a
  recognized occupation is sufficient.

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GE REGS ADDING NEW PROGRAMS

• If the institutions notice to add the new
  program is not timelynot submitted at least 90
  days before the first day of classthe program
  must be approved by USED to be Title IV eligible
• USED will take 45 to 90 days to review the notice
  or program application (per regulatory update
  workshop)

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GE REGS ADDING NEW PROGRAMS

• USED may request additional information from the
  school, or consult with the accrediting agency,
  state, BLS or any entity listed in the
  institutions notice during their review
• If USED denies the new program application, the
  school will be able to respond to the reasons for
  the denial and request reconsideration
• The school can still offer the programbut it is
  not eligible for Title IV aid until the USED
  approves it

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GE REGS ADDING NEW PROGRAMS

• What is a new program?
• CIP code different from any other program offered
  by the institution (see ECAR for CIP codes)
• A program with the same CIP code as another
  program offered by the school, but leads to a
  different degree or certificate or
• A program that the schools accrediting agency
  determines to be an additional program.

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PI REGS INCENTIVE COMPENSATION

• USED is revising the current regulations to align
  with the statute
• Eliminates all safe harbors currently allowable
• the Departments experience has demonstrated
  that unscrupulous actors routinely rely upon
  these safe harbors to circumvent the intent of
  the law.
• Revised regs comprehensively ban the use of
  commissions, bonuses, and other direct forms of
  compensation based on success in securing
  enrollments or the award of financial aid.

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PI REGS INCENTIVE COMPENSATION

• Prohibition applies to recruitment for non-Title
  IV as well as Title IV eligible programs
  (institutional eligibility requirement contained
  in PPA)
• Only exception is the recruitment of foreign
  non-Title IV aid eligible students in a foreign
  country

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PI REGS INCENTIVE COMPENSATION

• USED has developed a two-part test for
  determining if a payment is an incentive, bonus
  or commission
• (1) Whether it is a commission, bonus, or other
  incentive payment, defined as an award of a sum
  of money or something of value paid to or given
  to a person or entity for services rendered and

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PI REGS INCENTIVE COMPENSATION

• (2) Whether the commission, bonus, or other
  incentive payment is provided to any person based
  in any part, directly or indirectly, upon success
  in securing enrollments or the award of financial
  aid, which are defined as activities engaged in
  for the purpose of the admission or matriculation
  of students for any period of time or the award
  of financial aid.

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PI REGS INCENTIVE COMPENSATION

• If the answer to each of these questions is yes,
  the commission, bonus, or incentive payment would
  not be permitted under the statute.
• Permitted practices under the safe harbors will
  neither be automatically prohibited, nor
  automatically permitted.

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PI REGS INCENTIVE COMPENSATION

• Securing enrollments has been defined
• to specifically include (as examples) contact
  through preadmission or advising activities,
  scheduling an appointment for the prospective
  student to visit the enrollment office or any
  other office of the institution, attendance at
  such an appointment, or involvement in a
  prospective students signing of an enrollment
  agreement or financial aid application
• includes activities through the completion of an
  educational program

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PI REGS INCENTIVE COMPENSATION

• What a school CANNOT do
• Pay incentives based on retention or graduation
• Provide gifts or awards to students or alumni for
  referrals
• Adjust employee compensation multiple times a
  year
• (C)ompensation must not be based in any part,
  directly or indirectly, on success in securing
  enrollments or the award of financial aid.

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PI REGS INCENTIVE COMPENSATION

• What a school CANNOT do
• Pay a commission, bonus, or incentive payment to
  any entity, institution or organization that
  undertakes the recruiting or the admitting of
  students or that makes decisions about and awards
  title IV, HEA program funds
• Pay a commission, bonus or incentive payment to
  any higher level employee with responsibility
  for recruitment or admission of students, or
  making decisions about awarding title IV, HEA
  program funds

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PI REGS INCENTIVE COMPENSATION

• What a school CAN do
• Have a hierarchy of recruitment personnel with
  varying salary scales
• Promote and demote recruitment personnel
• Pay for internet-based services based on clicks
• Pay recruitment personnel a fixed salary to
  ensure that their ability to focus on what is in
  a students best interest is not compromised.

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PI REGS INCENTIVE COMPENSATION

• What a school CAN do
• Make merit-based adjustments to employee
  compensation (provided that such adjustments are
  not based in any part, directly or indirectly
  upon success in securing enrollments or the award
  of financial aid).
• Base salary adjustments on seniority or length of
  employment
• Use standard evaluative factors to measure
  employee performance

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PI REGS INCENTIVE COMPENSATION

• What a school CAN do
• Make profit-sharing payments so long as they are
  not provided to any person who is engaged in
  student recruitment or admission activity or in
  making decisions regarding the award of title IV,
  HEA program funds.

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PI REGS INCENTIVE COMPENSATION

• GEN-11-05
• Published March 17, 2011
• Provides additional guidance on state
  authorization, incentive compensation and
  misrepresentation
• Includes tables of covered and exempt
  activities for incentive compensation

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PI REGS INCENTIVE COMPENSATION

• GEN-11-05 exempt activities
• Profit-sharing plans, including 401(k) type
  plans, from which distributions are made to
  individuals on a basis that is neutral with
  respect to the role the recipient plays in
  student recruitment or the securing of financial
  aid

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PI REGS INCENTIVE COMPENSATION

• GEN-11-05 exempt activities
• Employee benefits plans offered to all employees
  on a basis that is neutral with respect to the
  role the recipient plays in student recruitment
  or the securing of financial aid
• Payments to senior executives with
  responsibility for the development of policies
  that affect recruitment, enrollment, or financial
  aid

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CONTACT INFORMATION

• Judy Hendrickson jhendrickson_at_accet.org
• Kris Strom kstrom_at_choiceconsulting.com
• Peggy Tiderman ptiderman_at_dci.edu