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WORKING GROUP REPORT PROGRAM INTEGRITY REGULATIONS

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WORKING GROUP REPORT PROGRAM INTEGRITY REGULATIONS Powered By Docstoc
					          WORKING	
  GROUP	
  REPORT	
  
      PROGRAM	
  INTEGRITY	
  REGULATIONS	
  
                                        University	
  of	
  Wisconsin	
  System	
  Administration	
  
                                                               March,	
  2011	
  

            ................................................................................................................................................	
  
INTRODUCTION	
                                                                                                                                              2	
  
                                                                                                                                                     2	
  
SUMMARY	
  OF	
  CHANGES	
  TO	
  REGULATIONS	
  ....................................................................................................	
  
                                                                                                                                                     2	
  
   State	
  Authorization	
  &	
  Distance	
  Learning	
  Requirements	
  (§600.9)	
  ...............................................................	
  
                                                                                                                                                                   2	
  
       State	
  Authorization:	
  .................................................................................................................................	
  
                                                                                                                                                               5	
  
       Distance	
  Learning	
  Education:	
  ..................................................................................................................	
  
                                                                                                                                                                       5	
  
       Penalty:	
  ....................................................................................................................................................	
  
                                                                                                                                                         12	
  
   Disclosure	
  Requirements	
  (§668.43)	
  ...........................................................................................................	
  
                                                                                                                                                         13	
  
   Incentive	
  Compensation	
  (§668.14)	
  ............................................................................................................	
  
                                                                                                ....................................................	
  
   Definition	
  of	
  Credit	
  Hour	
  and	
  Accreditation	
  Process	
  (§§600.2,	
  600.24)	
                                                  14	
  
                                                                                                                                                             18	
  
   Validity	
  of	
  High	
  School	
  Diplomas	
  (§668.16(p))	
  ..........................................................................................	
  
                                                                                                                                                      20	
  
   Satisfactory	
  Academic	
  Progress	
  (§§668.16,	
  668.34)	
  ..................................................................................	
  
                                                                                                                                                            21	
  
   Repeat	
  Coursework	
  (§668.2)	
  .....................................................................................................................	
  
                                                                 ..................................................................................	
  
   Student	
  Aid	
  Disbursement	
  and	
  Refunds	
  (§668.164)	
                                                                                22	
  
                                                                                                                                                                   24	
  
   R2T4	
  (Return	
  of	
  Title	
  IV	
  Aid)	
  Withdrawal	
  (§668.22(a),	
  (b),	
  (f))	
  ..................................................................	
  
                                                                                                                                                         26	
  
   Gainful	
  Employment	
  (§§600.2,	
  600.4,	
  668.6)	
  ............................................................................................	
  
   Student	
  Eligibility	
  &	
  Aid	
  Determination:	
  Ability	
  to	
  Benefit/Approval	
  of	
  Independent	
  Tests	
  (§668.32,	
  
                                                                                                                                                                    28	
  
   Subpart	
  J	
  of	
  Part	
  668	
  (§668.141,	
  et.seq.)	
  ..................................................................................................	
  
                                                                                                                                                        30	
  
   Verification	
  and	
  Updating	
  of	
  Student	
  Aid	
  Application	
  Information	
  (Subpart	
  E	
  of	
  Part	
  668)	
  .....................	
  
                                                                                                                                                               32	
  
   Misrepresentation	
  (Subpart	
  F	
  of	
  Part	
  668)	
  ................................................................................................	
  
                                                                                                                                                34	
  
   Written	
  Arrangements	
  Between	
  Institutions	
  (§§668.5,	
  668.43)	
  ...............................................................	
  
                                                                                                                                                          35	
  
ATTACHMENTS	
  TO	
  REPORT	
  ...........................................................................................................................	
  
   	
                                                                                                                                                      35	
  
           Program	
  Integrity	
  Regulations	
  (by	
  CFR	
  section)	
  ................................................................................	
  
   	
                                                                         ...................................................................	
  
           Eduventure/WCET	
  “Starter	
  List”	
  (revised	
  January	
  2011)	
                                                                 35	
  
                                                                 University	
  of	
  Wisconsin	
  System	
  Administration	
  
                                                  Working	
  Group	
  Report	
  -­‐	
  PROGRAM	
  INTEGRITY	
  REGULATIONS	
  
	
  
INTRODUCTION	
  

On October 29, 2010, the Department of Education issued a new set of administrative rules
covering a variety of topics under the rubric of “program integrity.” While the rules have been
widely characterized as targeting abuses in the for-profit sector, all institutions that participate in
Title IV student aid programs will be impacted. The breadth and depth of these rules cover a
wide range of topics and will substantially impact institutional operations. A significant number
of questions have been raised by the University of Wisconsin (UW) institutions relating to the
impact and intent of the rules, as well as the recommended approaches for ensuring compliance.
For example, under the State Authorization requirements, institutions must be legally authorized
by name to operate postsecondary education programs in a state where the institution has a
physical presence. In addition, states must establish a complaint process under which states can
receive, review, and respond to public complaints regarding postsecondary education. A new
provision was added to require institutions to obtain approval from any state where a student
who enrolls in a distance learning/online education program is located. Even though some states
maintain certain requirements for distance learning, the new regulations now impact all fifty
states where UW students may reside. The other example includes the Gainful Employment rule
requires institutions to track student post-graduation placement, income and other data. While
degree programs are exempted from this specific requirement, the changes will require additional
resources to monitor certificate, continuing education and other non-degree programs. Due to
these changes, among others, a working group was established to provide guidance and direction
toward compliance with the new program integrity regulations. This report is intended to offer
an overview of the regulations, the potential impact upon UW institutions, and suggestions
toward compliance.


SUMMARY	
  OF	
  CHANGES	
  TO	
  REGULATIONS

State	
  Authorization	
  &	
  Distance	
  Learning	
  Requirements	
  (§600.9)	
  

Summary:	
  

State	
  Authorization:

 Regulation: In response to the Department of Education’s concerns over the inconsistent
  approval and oversight methods of States in regard to institutions offering postsecondary
  education, the “State Authorization” requirements were amended to force States to take a
  more active role in approving an institution’s postsecondary education by authorizing
  institutions by name, and creating a complaint process in which a State (or its equivalent) can
  receive, review and respond to public complaints relating to postsecondary education.

       In general, these regulations are applicable to institutions of higher education, proprietary
       institutions of higher education or postsecondary vocational institutions that maintain a
       physical presence within a State and/or offer postsecondary education through distance
       learning or correspondence education in a State where the institution is not physically

                                               Page 2 of 35
	
  
                                                                 University	
  of	
  Wisconsin	
  System	
  Administration	
  
                                                  Working	
  Group	
  Report	
  -­‐	
  PROGRAM	
  INTEGRITY	
  REGULATIONS	
  
	
  
       located. (Note that the specific regulations addressing the distance learning education are
       found under §600.9(c) as discussed below) This includes all UW institutions within the State
       of Wisconsin along with their respective online or distance learning education courses or
       programs (whether funded by the institution or as a cost-recovery program).

          Applicable Definitions:

          Institution of Higher Education is defined as an accredited public or other nonprofit
          institution in any state that is legally authorized to provide a program of education
          beyond secondary education. This includes institutions that provide: (1) a program that
          leads to a bachelor’s degree; (2) a not less than a 2-year program that is acceptable for
          full credit toward a bachelor’s degree; (3) a degree that is acceptable for admission to a
          graduate or professional degree program; or, (4) a not less than a 1-year program of
          training to prepare students for gainful employment in a recognized occupation.

       An institution is legally authorized by the State if the State establishes the institution by name
       as an educational institution through its charters, laws, constitutional provisions or articles of
       incorporation that authorize an entity to offer postsecondary educational programs, including
       programs leading to a degree or certificate. As stated in the Comments of the Federal
       Register, “unless a State provides at least this minimal level of review, we do not believe it
       should be considered as authorizing an institution of offer [postsecondary education].” 75
       Fed. Reg. 66859, 66863. If a state has additional approval or licensure requirements, the
       institution must also comply with those requirements in order to be considered legally
       authorized. If the entity is established as a business or nonprofit charitable organization (i.e.
       not an educational institution), the entity must obtain authorization to offer postsecondary
       educational programs.

       According to the Comments, public institutions established by state law, such as the
       University of Wisconsin System and its institutions, are considered instrumentalities of a
       State government and thereby considered compliant with the provisions of §600.9(a)(1)(i).
       However, if, for example, the State of Wisconsin maintains additional state requirements in
       regard to operating a postsecondary educational institution, public institutions must
       demonstrate that they have met all additional requirements in order to remain compliant
       under §600.9(a). 75 Fed. Reg. 66861.

 Complaint Process: Even though public institutions may be considered “authorized”
  pursuant to their home state’s authority, institutions will not be legally authorized to offer
  postsecondary education under §600.9(a)(1) unless the State has a process under which it can
  receive, review and appropriately act on complaints concerning postsecondary education,
  including the enforcement of applicable State laws. §600.9(a)(1).

            “If a State declines to provide an institution with legal authorization to
            offer postsecondary education in accordance with §600.9, the
            institution will not be eligible to participate in Federal [student Title
            VI financial aid] programs.” 75 Fed. Reg. 66859.


                                                Page 3 of 35
	
  
                                                                University	
  of	
  Wisconsin	
  System	
  Administration	
  
                                                 Working	
  Group	
  Report	
  -­‐	
  PROGRAM	
  INTEGRITY	
  REGULATIONS	
  
	
  
       The purpose of the complaint process shall be to determine whether an institution or
       education program is complying with state laws, including licensure and approval
       requirements. It must address three ranges of complaints: 1) violations of state consumer
       protection laws (e.g., false advertising); 2) violations of state laws or rules relating to
       licensure of postsecondary institutions; and 3) complaints relating to quality of education or
       other state or accreditation requirements. 75 Fed. Reg. 66865-66866. If the current
       complaint process fails to address these three areas, the process will be considered
       noncompliant with §600.9(a)(1) and the institutions operating within such State will not be
       “legally authorized” to offer postsecondary education.

       A State may delegate this authority to one or more regulatory state agency or the State’s
       Attorney General’s Office to manage the complaints; however, the State must remain
       responsible for the official response and resolution of the complaints. The State may also
       defer an initial review of a complaint to an accreditation agency, but the State retains the
       primary role and responsibility in determining the appropriate resolution to assure student
       consumer protection against fraudulent or abusive practices by postsecondary institutions. 75
       Fed. Reg. 66866. The State cannot assign this responsibility to a higher education board or
       agency, as the process must be separate and apart from an educational institution’s complaint
       and sanctioning process in order to provide an independent review.

 Extension to Delay Effective Date: If a State fails to implement a mechanism to authorize
  institutions to offer postsecondary education within its territory by July 1, 2011, the affected
  institution may request a one-year extension, and if necessary, an additional one-year
  extension (up to July 1, 2013) from the Secretary of the Department of Education. The
  institution’s request for an extension must include an explanation from the State as to how an
  extension will permit the State to comply with §600.9(a)(1). If the extension is granted, the
  effective date of §600.9(a) and (b) is extended to the new date. According to the Discussion
  section of the Federal Register, such time frame should be sufficient to permit a State to
  modify its procedures to comply with the new regulations. 75 Fed. Reg. 66863.

 Notice and Disclosure of Authorization: Once an institution has received legal
  authorization, it must provide documentation to the Secretary of the Department of Education
  to verify that it is legally authorized to provide postsecondary education programs within the
  State. It must also provide its enrolled and prospective students with a copy of the state
  approval or licensure upon request. Finally, the institution must provide its enrolled and
  prospective students with the contact information of the applicable state agency or office
  where complaints may be filed. (See Disclosure Requirements herein).

 Reciprocal Agreement: If a State that has a reciprocal agreement with another state to
  recognize each other’s authorization, the Department of Education will consider the
  institution legally authorized in both States as long as the institution provides appropriate
  documentation of authorization from the home State and of the reciprocal agreement. 75
  Fed. Reg. 66867. (Note: As stated herein above, in addition to the reciprocal agreement, both
  States must have a complaint process for the institution to be considered “authorized” under
  §600.9.)


                                               Page 4 of 35
	
  
                                                                  University	
  of	
  Wisconsin	
  System	
  Administration	
  
                                                   Working	
  Group	
  Report	
  -­‐	
  PROGRAM	
  INTEGRITY	
  REGULATIONS	
  
	
  
Distance	
  Learning	
  Education:	
  	
  	
  

 Regulation: Under §600.9(c), if an institution is offering postsecondary education through
  distance or correspondence education to students in a State in which it is not physically
  located or in which it is otherwise subject to State jurisdiction as determined by the State, the
  institution must meet the State’s requirements to be legally offering postsecondary distance
  or correspondence education within that State.

              “If an institution is offering postsecondary education through distance
              learning or correspondence education to students in a State in which it
              is not physically located or in which it is otherwise subject to State
              jurisdiction as determined by the State, the institution must meet any
              State requirements for it to be legally offering postsecondary distance
              learning or correspondence education in that State.” §600.9(c); 75
              Fed. Reg. 66947

 Documentation: Upon request by the Secretary of the Department of Education, the
  institution must be able to document that the State has approved the institution to offer
  postsecondary distance learning or online education within its borders. §600.9(c); 75 Fed.
  Reg. 66947. For those States that have set requirements regarding online or distance learning
  education, the institution must obtain approval before offering distance learning or online
  education to a student located in that State. This means that in order for the student to be
  eligible for Title IV/ HEA funds, the institution must identify the student and seek approval
  from the State before enrolling the student in an online course or program. In order to remain
  eligible, the student’s location must be reevaluated each time that the institution makes a new
  award. [See USDOE “Dear Colleague” Letter, Mar 17, 2011]

       If a State does not have an approval process in place, the institution may continue to offer its
       distance learning education as long as it can document that it sought approval from the State
       (and the State confirms this fact). If a State does not regulate such activities by out-of-state
       institutions, the institution will be considered to be legally operating in that State.

 Notice and Disclosure Requirements: Even if a State does not regulate out-of-state distance
  learning education, the institution is still required to provide its students and prospective
  students with contact information for filing complaints with its accrediting agency and with
  any relevant State official or department that would appropriately handle a student’s
  complaint. See Disclosure Requirements herein; 75 Fed. Reg. 66866; See USDOE “Dear
  Colleague” Letter, Mar 17, 2011.
Penalty:	
  	
  	
  

The penalty for failing to comply with the provisions of §600.9 may include, but are not limited
to: 1) the institution’s loss of eligibility to participate in the federal student financial aid
programs; 2) loss of eligibility to participate in the federal student financial aid programs with
respect to the particular State in which the institution is not approved/in compliance; and 3)


                                                 Page 5 of 35
	
  
                                                            University	
  of	
  Wisconsin	
  System	
  Administration	
  
                                             Working	
  Group	
  Report	
  -­‐	
  PROGRAM	
  INTEGRITY	
  REGULATIONS	
  
	
  
reimbursement by the institution of Title IV funds that were obtained without the requisite State
authorization or approval to receive them. [See USDOE “Dear Colleague” Letter, Mar 17, 2011]




                                          Page 6 of 35
	
  
                                                                  University	
  of	
  Wisconsin	
  System	
  Administration	
  
                                                   Working	
  Group	
  Report	
  -­‐	
  PROGRAM	
  INTEGRITY	
  REGULATIONS	
  
	
  
Impact:	
  

 State Authorization Requirements: Because the University of Wisconsin System was
  created as a “system of institutions of learning known as the University of Wisconsin
  System”, any university or organizational equivalent designated by the Board of Regents of
  the University of Wisconsin (whether a university, college or extension) is a part of the
  University of Wisconsin System and is thereby authorized by the State of Wisconsin to
  provide postsecondary education in compliance with §600.9(a)(1)(i)(A). Wis.Stat., §36.03.
  [Note that if the State of Wisconsin has additional licensure or approval requirements
  through State boards or agencies, the UW System and its institutions must also demonstrate
  compliance with such additional state law requirements, including any provisions relating to
  distance learning or online programs.]

       However, that is only one part of §600.9(a) for purposes of compliance. In order to fulfill the
       state authorization requirements under §600.9(a), the State of Wisconsin must have a
       complaint process through which to receive, review and respond to concerns relating to
       postsecondary education. Failure of the State of Wisconsin to establish such a complaint
       process prevents the UW institutions from being “legally authorized” to provide
       postsecondary education for purposes of Title IV eligibility. Therefore, the State must act to
       create such a process on or before July 1, 2011 in order for the UW institutions to be
       considered in compliance with §600.9(a)(1) and avoid the loss of federal aid eligibility and/or
       a loss of students’ eligibility to receive federal aid.

       The UW System and its institutions may seek an extension beyond the July 1, 2011 deadline
       by submitting an explanation from that states how the extension will permit the State to
       comply with §600.9 (authorization and complaint process). 75 Fed. Reg. 66833 and 66863.
       If the UW institutions continue to operate after July 1, 2011 and the State is noncompliant
       with §600.9(a)(1), the institutions will not only risk losing federal aid eligibility for purposes
       of Title IV, HEA, but the institutions may be required to reimburse the Department of
       Education for any funds received during this period.

 Distance Learning: This change will also have a significant impact on UW institutions’
  distance learning and correspondence programs offered to students who are located in states
  other than Wisconsin. As of July 1, 2011, institutions offering distance learning or
  correspondence education outside of the State of Wisconsin will be required to verify that
  they have either met a respective state’s requirements for offering out-of-state distance
  learning or correspondence education within that state, or, in the alternative, verify that the
  institution has contacted the state and determined that no approval or requirement exists.
  This will require additional time and resources of university staff. Two UW institutions have
  already confirmed that their distance learning education programs have at least one or more
  students located in each of the fifty states, thereby requiring the institutions to seek approval
  from each of the fifty states on or before July 1, 2011.

       To go a step further, national speakers proclaim that due to the general nature in which the
       regulations are written, the institutions must assume that the approval process will cover not
       only distance learning programs, but any form of education, whether it is an online course or

                                                Page 7 of 35
	
  
                                                                 University	
  of	
  Wisconsin	
  System	
  Administration	
  
                                                  Working	
  Group	
  Report	
  -­‐	
  PROGRAM	
  INTEGRITY	
  REGULATIONS	
  
	
  
       some form of distance correspondence. For example, the rules would cover non-degree
       seeking students who enroll in random courses without declaring an interest in a particular
       program. In addition, there are continuing students from some campuses who may head
       home for a summer and seek to enroll in an online course when they are back in their home
       state. The regulations fail to define “students in a State,” thereby leaving open the question of
       whether it applies to students with permanent residency or merely located within the State at
       the time of enrollment. The guidance provided by the USDOE suggests that UW institutions
       must seek and obtain the approval requirements of a State in which the UW student is
       merely located at the time of enrollment for purposes of eligibility. [See USDOE Dear
       Colleague Letter, Mar 17, 2011] For every award period thereafter, the institution will be
       responsible for reevaluating the student’s location to determine whether he or she remains
       eligible for Title IV, HEA funds. There is no minimum enrollment for purposes of
       complying with the requirements hereunder. For example, if a student is enrolled in an
       online course in the State of Missouri and moves to the State of Texas, the institution must
       verify that it has approval to offer this course in the State of Texas. If the State of Texas
       refuses to approve the institution’s course or program, the institution must cease the course or
       program immediately. This adds another dimension to this issue regarding the termination of
       a student’s enrollment mid-course and the ramifications of such act, including potential
       reimbursement of tuition and fees, reduction in courses which could impact the student’s
       financial aid eligibility, and more.

       In addition, the fees and costs associated with the authorization process will likely result in
       an increase in the operational costs of the distance learning programs due to the application,
       registration and/or licensure fees that will likely be required to continue offering online
       education within a state. A number of states have application fees ranging from $500
       to$3000 with an additional fee of $500 per program. Other states have not established a
       specific application or licensure fee for distance learning because they have not previously
       regulated this type of activity. However, those states now have the opportunity to create a
       fee structure that may provide an opportunity for additional revenue during difficult
       economic times. These costs may result in either an increase in costs associated with these
       distance learning programs or a reduction in programs that are offered. Either result would
       likely cause a decrease in student enrollment. Ultimately, since a number of states do not
       regulate or license distance learning education and/or do not apply state requirements to these
       types of educational options, it is difficult to predict the full extent of the impact on each
       institution.

       One possibility for reducing the impact of complying with the requirements of the State
       Authorization (§600.9(a)(1)) and Distance Learning (§600.9(c)) regulations would be for the
       State of Wisconsin to pursue reciprocal agreements with other states which recognize public
       institutions as being “authorized” for purposes of offering postsecondary education within
       that state. UW institutions would be able to provide postsecondary education within such
       states without the required application, licensure or related costs. For example, if Wisconsin
       and Minnesota created such agreement, the public institutions from each state could offer
       postsecondary education in the other state as if they were legally authorized to do so.
       However, the reciprocating state must have a complaint process in order for the institution to
       be “authorized” under §600.9. This option would likely require, at a minimum, involvement

                                               Page 8 of 35
	
  
                                                               University	
  of	
  Wisconsin	
  System	
  Administration	
  
                                                Working	
  Group	
  Report	
  -­‐	
  PROGRAM	
  INTEGRITY	
  REGULATIONS	
  
	
  
       from other executive branches of state government and could not be accomplished by the
       UW System alone.

       The UW institutions will be required to create and maintain a database or record-keeping
       system whereby it can verify that it is legally authorized by name to provide postsecondary
       education in the State of Wisconsin in addition to documenting that it has met applicable
       State requirements in regard to offering postsecondary education through distance learning or
       correspondence education. The documentation must be available to the Secretary of the
       Department of Education upon request, and provided to prospective and enrolled students as
       well.

Steps	
  to	
  Compliance:

Due to the significant impact of these regulations on UW institutions, both for purposes of being
legally authorized to offer postsecondary education programs within the State of Wisconsin and
providing distance learning or correspondence education outside of the State of Wisconsin, it is
highly important that the UW System Administration and its institutions prepare for the July 1,
2011 changes by taking the following steps, at minimum:

 System Administration should designate an individual and/or office to serve as the System’s
  official contact in regard to the preparation and implementation of the pending changes. This
  individual and/or office should be familiar with the process involved in the State of
  Wisconsin’s authorization and complaint process for postsecondary education within the
  State, along with the process involved in the development, implementation and management
  of distance learning and/or correspondence education offered by UW institutions outside of
  the State.

 System Administration should initiate contact with its state government representatives to
  determine what is required, if anything, to verify that the State of Wisconsin has a process in
  place to legally authorize the UW System (and/or its institutions) by name to offer
  postsecondary education in the State of Wisconsin. In addition, it is imperative that the State
  of Wisconsin create a process in which it can receive, review and appropriately respond to
  complaints regarding an institution’s postsecondary education as required by §600.9(a).
  Finally, System Administration should recommend to the State of Wisconsin that it consider
  pursuing reciprocal agreements with other states to recognize UW institutions as authorized
  to operate both on-site postsecondary education and distance learning programs within the
  reciprocating state. Such agreement would significantly decrease the costs and resources
  required to comply with out-of-state authorization licensure and approval requirements.

 Each institution should designate an individual and/or office to work closely with all
  academic units and distance learning programs affected by these changes to determine the
  most effective and efficient method in complying with the State of Wisconsin’s authorization
  requirements and out-of-state requirements for distance learning or correspondence education
  (including those states where students currently reside along with those states where the
  institution is offering or advertised its courses/programs for enrollment). This individual


                                              Page 9 of 35
	
  
                                                                                                                                                                                                                                                                      University	
  of	
  Wisconsin	
  System	
  Administration	
  
                                                                                                                                                                                                                                                       Working	
  Group	
  Report	
  -­‐	
  PROGRAM	
  INTEGRITY	
  REGULATIONS	
  
	
  
                             and/or office will also serve as a liaison between the campus and System Administration for
                             purposes of pursuing state authorization and state requirements, when necessary.

 Each institution should take steps to catalog all academic programs which offer online
  courses or distance learning education to determine the nature and extent of its staff resources
  required to pursue the necessary state approvals for both existing and future programs or
  courses by July 1, 2011.

 Each institution should review the budgetary and funding requirements for the academic
  programs offering online and distance learning education to determine the financial impact
  that may result from seeking approval from those states in which students currently reside.

 Until a decision is made in regard to the most effective and efficient manner in seeking
  approval on behalf of those UW institutions offering online or distance learning education,
  the institutions should engage in discussions regarding what steps need to be taken at the
  campus level in order to comply with these new regulations.

 For those institutions that are currently offering distance or online education to students
  outside of the State of Wisconsin, a standard letter should be prepared that will be directed to
  all affected states which indicates that the institution is responding to the new “state
  authorization” federal regulations that go into effect on July 1, 2011. This letter should seek
  state authorization for the programs offered and request that the State respond by indicating
  what will be required to meet the State’s requirements, such as: 1) specific state
  authorization/licensure/approval requirements for an out-of-state institution delivering online
  programs into the state; 2) specific reference to the state’s governing law and regulations; 3)
  application and materials required to be submitted; 4) time and calendar requirements for
  submission; 5) length of time before the agency will act on a completed application, once
  submitted; 6) the process that is employed for reviewing the application, including site visits
  or external review processes; 7) cost to apply and any ongoing costs to the institution; 8)
  whether any exemptions are allowable and if so, what are the procedures and costs for
  requesting an exemption; 9) whether any reciprocal or consortial arrangements are
  allowed/approved to meet the state authorization/licensure/approval requirements; and 10)
  the period of time covered by the authorization/licensure/approval, if granted. 1 The letter
  should also indicate that the institution is currently, or may in the future, enroll students from
  that State in online/distance education.

 Even though the regulations do not become effective until July 1, 2011, UW System
  Administration and institutions should work together to coordinate the most effective and
  efficient approach toward compliance with the new regulations, which should include
  immediate action toward: 1) obtaining state authorization within the State of Wisconsin
  (which will include verifying that the State of Wisconsin has a complaint process in place or
  will establish such a process on or before July 1, 2011); and 2) determining the approval
  requirements from each state within the country for purposes of receiving approval to offer
  distance learning/online education to both current and prospective student(s) who are located
  within said states(s).
	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
   	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
1
         This list was prepared and recommended by the University Professional & Continuing Education Association.

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In summary, there are more questions than answers in regard to the impact of these regulations
on institutions of postsecondary education that are eligible for Title IV/HEA funding. At this
point, the most effective approach toward reaching compliance is to designate appropriate UW
System Administration and institution officials who will oversee compliance efforts in regard to
the new regulations, continue to collect information regarding the interpretation of the
regulations, contact state officials to verify the existing mechanisms in place for purposes of state
authorization/complaint process, work closely with other campus officials to avoid duplicative
efforts, and create a detailed course of action toward compliance within the necessary
timeframes.

Guidance from Other Resources:

Due to the significant impact on educational institutions that offer online programs throughout
the country, and in response to many inquiries, a few organizations have prepared information
and guidance on these changes and the impact on educational institutions, such as National
Association of College and University Attorneys (NACUA), Eduventure and the WICHE
Cooperative for Educational Technologies (WCET). A useful resource from NACUA can be
found at: http://www.nacua.org/lrs/NACUA_Resources_Page/StateAuthorizationRule.asp. In
addition, Eduventure and WCET have worked together to create a “Starter List” as a resource to
assist educational institutions in determining the state-by-state licensure and authorization
requirements. (Attached). (Note that this information has not been verified for accuracy). In
addition, WCET has offered the following suggestions to prepare institutions for this change:
(Note: This information can be found on the WCET website at: http://wcet.wiche.edu/advance/state-
approval.)

       1.   Designate a person or office to be the institution’s main contact in regard to the
            preparation and implementation of the pending changes. For example, some institutions
            have dedicated up to four staff members to assume this responsibility.

       2.   Determine each institution’s distance learning or online program enrollment history. For
            example, review the states in which the institution has advertised and provided distance
            learning programs to students. Determine which states you need to address first.

       3.   Become familiar with each state’s regulatory requirements. For example, there are
            resources available that provide an overview of state-by-state regulatory requirements for
            state authorization. A number of states regulate all educational programs offered in the
            state, but do not provide guidance on whether it would apply to online or distance
            learning programs. Other states have no requirements. Some states expect every
            institution to seek approval. For the vast majority of states, it will depend on what
            educational programs the institution intends to offer.

       4.   Collaborate with Institution leadership and System Administration. Involve key officials
            (distance education directors, provosts, chief financial aid officers, system administration
            and legal) of how this issue will affect the institution and what steps you plan to take to
            address the pending changes. For example, what impact will the new regulations have on

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                the program’s budget (application and licensure fees by state)? What type of resources
                will be necessary to comply with the regulations? Will the institution be required to
                reconsider its current and future plans to offer distance learning or specific programs in
                other states? Will there be legal exposure to the institution if it continues its current
                distance learning programs?

       5.       Prepare a Snapshot Description of Institution’s programs offered in other states. Whether
                the institution will be required to seek state authorization for its programs depends
                entirely on the description and type of program being offered. Experts recommend that
                institutions create brief “profiles” that describe the institution and its intended activities in
                the state. This will assist the state regulatory agency in determining whether the
                institution will be required to submit an application for licensure. An example of a
                summary might include:
                    • Name of institution.
                    • Type of institution (public, for-profit, religious-based, etc.).
                    • Programs and degree levels in which you previously, currently, or plan to enroll
                         students in the state.
                    • List of activities within state (include information, such as: does the institution
                         maintain a local mailing address or phone number in the state, advertise in local
                         media, require students to take proctored tests, place recruiting officers or faculty
                         within the state, etc…).
                    • The institution’s contact information (by individual and office).

       6.       Document Institution’s Plan of Action. One of the requirements under the new regulation
                is the ability to provide documentation regarding state authorization. Establishing a
                record-keeping process will assist in these efforts, if and when it becomes necessary.


Disclosure	
  Requirements	
  (§668.43)	
  
	
  
Summary:	
  

Under Section 668.43(1)(b), institutions are required to make certain institutional information
available for review by enrolled and prospective students, and to provide other information to
enrolled or prospective students.

Specifically, institutions must make the following available for review by enrolled and
prospective students:

            •   Documents describing the institution’s accreditation; and
            •   Documents describing the institution’s State, Federal, or tribal approval or licensing.
                [Note: UW institutions are not licensed by the State of Wisconsin, although reference
                could be made to Wisconsin Statutes, Chapter 36.]

Institutions must also provide its students or prospective students with:

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       •   Contact information for filing complaints with its accreditor and with its State approval
           or licensing entity (according to the Comments to the final regulations, institutions must
           provide not only the contact information for the State or States in which it is physically
           located, but also the contact information for States in which it provides distance
           education to the extent that the State has any licensure or approval processes for an
           institution outside the State providing distance education in the State); and
       •   Any other relevant State official or agency that would appropriately handle a student’s
           complaint.

Impact:	
  

This regulation requires certain basic disclosures to students. The impact is not expected to be
significant.

Steps	
  to	
  Compliance:	
  

 UW institutions should make arrangements to make available (perhaps by posting on
  websites) documents describing accreditation. The same information should also provide an
  explanation of the institution’s status under Chapter 36.

 Separately, institutions should provide for prospective and enrolled students contact
  information for filing complaints, including both with the appropriate agency in the State of
  Wisconsin and in every state in which the institution is licensed or approved to provide
  distance education. UW institutions should make reference to Chapter 36 of the Wisconsin
  Statutes. UW institutions should work together to develop or seek from another organization
  a comprehensive list of the entities taking complaints across the country so that this effort
  need not be duplicated by each institution.


Incentive	
  Compensation	
  (§668.14)	
  

Summary:	
  
	
  
Institutions are not permitted to provide any commission, bonus, or other incentive payment
based in any part, directly or indirectly, upon success in securing enrollments or the award of
financial aid, to any person or entity who is engaged in any student recruitment or admission
activity, or in making decisions regarding the award of Title IV, HEA program funds. This
restriction does not apply to the recruitment of foreign students residing in foreign countries who
are not eligible to receive Federal student assistance.
           Applicable Definitions:
           Commission, bonus, or other incentive payment is defined as a sum of money or
           something of value, other than a fixed salary or wages, paid to or given to a person or an
           entity for services rendered.

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        Securing enrollments or the award of financial aid is defined as activities that a person
        or entity engages in at any point in time through completion of an educational program
        for the purpose of the admission or matriculation of students for any period of time or the
        award of financial aid to students.

Impact:	
  

Although the regulation permits proper merit-based compensation adjustments and profit-sharing
payments, any employee who receives multiple compensation adjustments in a calendar year and
is engaged in any student enrollment or admission activity or in making decisions regarding the
award of Title IV/HEA program funds is deemed to have received such adjustments based upon
success in securing enrollments or the award of financial aid if those adjustments create
compensation that is based in any part, directly or indirectly, upon success in securing
enrollments or the award of financial aid.
The Comments to the final regulations state that recruitment of student athletes is not different
from recruitment of other students. Incentive compensation payments to athletic department
staff are also governed by these restrictions. If the payments are made based on success in
securing enrollments or the award of financial aid, the payments are prohibited; however, the
Department of Education does not consider “bonus” payments made to coaching staff or other
athletic department personnel to be prohibited if they are rewarding performance other than
securing enrollment or awarding financial aid, such as a successful athletic season, team
academic performance, or other measures of a successful team.

Steps	
  to	
  Compliance:	
  
	
  
 Institutions should review job duties to determine which employees are covered by this
  regulation. Moreover, institutions should review compensation methods for all employees
  and entities engaging in student recruitment, admissions activity, or decisions regarding the
  award of Title IV/HEA program funds to ensure that merit based adjustments have no
  relationship to success in securing enrollments or the award of financial aid.


Definition	
  of	
  Credit	
  Hour	
  and	
  Accreditation	
  Process	
  (§§600.2,	
  600.24)	
  
	
  
Summary:	
  

The Department of Education’s Program Integrity Rules apply to all academic programs offered
by U.S. institutions of Higher Education. The new rules create a quantifiable minimum definition
for credit hours primarily for use in “determining eligibility for, and the amount of, Federal
program funds that a student or institution may receive.” Under the new regulations, the
institution retains the right to determine the credit hours applicable to an amount of work verified
by evidence of student achievement. The proposed guidelines allow for a “reasonable”
approximation in establishing minimum credit hour requirements for other academic activities,
such as laboratory work and internships, etc., which amount to the equivalent level of work over
a different length of time. In determining their equivalent definitions of a credit hour,

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institutions may also use the baseline standard of “other commonly accepted higher education
academic practice.” Institutions may consider the unique characteristics of their program
offerings as well as its distinctive student populations provided that institutions establish other
measures that approximate the minimum standards. Institutions are required to submit their
definitions and related policies regarding credit hour to their accrediting agencies and receive an
official, recorded certification from that accrediting organization that the definitions meet the
new minimum definition of “commonly accepted practice.” [Note that the regulations do not
specifically define this commonly-used term.]

        Applicable Definition:

        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:

                (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

                (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, practicals, studio work, and other academic work leading to
        the award of credit hours.

Impact:	
  

Although the new rules are primarily intended for use in “determining eligibility for, and the
amount of, Federal program funds that a student or institution may receive,” it is to be expected
that institutions will adopt the mandated credit hour definition (or its equivalent) for all
operations because it is difficult to distinguish between credit hour definitions needed solely for
federal financial aid and other purposes. However, UW institutions will be able to continue using
the long-standing credit-assignment practices that have proven to be the most effective for
determining credit hours or equivalent measures for academic purposes, as long as they
reasonably conform to the Department of Education definition.

Apart from the use for Federal programs, the rules do not limit or prescribe the method which
institutions use to assign credits to their courses for academic or other purposes.
The rules provide institutions with a baseline, not an absolute value. One hour can mean 50
minutes or one clock hour.

However, in some institutions, different programs/disciplines are allowed to use diverging
definitions of credit hours, e.g. different definitions used by the Department of Engineering in
contrast to the Department of Music. Under the new rules, these distinctions would have to be
eliminated and credit hour definitions would have to be applied uniformly to all degree
programs.

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The impact on online delivery might be the strongest. Institutions will have to examine three-
year degree options, accelerated classes and all distance learning and hybrid formats for
compliance. In addition short-term and long-term study-abroad programs need to be examined
for compliance with the new credit hour rule since they often accommodate out-of-class learning
in the community for college credit. At the very least, current policies and definitions regarding
equivalencies at each institution may be subject to review and change. Institutions may have to
create policies that set minimum requirements for what counts as direct faculty instruction in
asynchronous or flexible online delivery of curricula.

Overall, the impact on traditional delivery might be of lesser concern to UW System institutions
because, in essence, the new rules maintain a definition of credit hour similar to the Carnegie
Unit used at many institutions for the same purposes. In the latter, the measuring of a credit hour
is based upon the “seat time” students spend in formal instruction and in direct contact with the
instructor in a face-to-face or virtual classroom and, independently, upon the student’s time spent
for class preparation, studying, and take-home assignments.

Compliance with existing System and Accreditation-required Student Learning Outcomes needs
to be examined and changed, if necessary. Faculty may need to change courses and curriculum.
The requirement to adjust curriculum may interfere with academic freedom and shared faculty
governance. A legal review might be necessary. Quantity of Learning (as measured by the credit
hour definition) may need to be aligned specifically to Quality of Learning.

However, all current (existing) and future Federal Student Aid calculations may potentially be
impacted. Institutions will have to monitor students’ continued eligibility for Federal Student
Aid; this monitoring will require additional work time and budget allocations. Institutions may
need to correct Title IV disbursement amounts if definitions of credit hours used in submitting
the applications are/were not consistent with the new regulations. The amount of Federal Student
Aid the student qualifies for may have to be recalculated. The Department of Education may
determine a repayment liability if the institution calculated student financial aid under faulty
assignment of credit hours and may be required to pay back funds. Further, institutions must
make sure they do not significantly overstate the amount of credit hours a student earns in an
academic program because the Secretary of Education may fine the institution or limit, suspend,
or terminate its participation in federal programs.

Institutions may need to determine whether the Higher Learning Commission (HLC) will
evaluate the above named policies and definitions outside the ordinary institutional review cycle
or whether its current policies will have to be submitted for evaluation immediately, outside the
review cycle.

The accrediting agency might not review promptly or in a timely manner to allow the institution
to act within mandated time frames and federal, state, and local deadlines.

The HLC may need to come up with guidelines and publish evaluation criteria. This process
might delay the institution’s ability to act on Federal Student Aid computations and consequently
could result in student attrition or enrollment decline.

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Steps	
  to	
  Compliance:	
  

 At a minimum, institutions should review current credit hour assignments to ensure
  compliance with the Program Integrity Rules and develop new policies and procedures as
  appropriate. Institutions may be required to use the credit hour rules for determining
  institutional eligibility, program eligibility and student enrollment status and eligibility in
  regard to all federal programs. However, this is not clear from the language of the
  regulations. In addition, the Board of Regents should consider whether a formal Board of
  Regents rule or policy is necessary to provide direction and guidance to the institutions.

 If an institution maintains a separate academic standard for measuring credit hour
  requirements, it may have to publicly justify it (in writing) to the extent it differs from the
  Department of Higher Education definition, even if it appears reasonable to the institution.

 Faculty development and assessment of average time spent by students in completing out-of-
  class assignments may have to take place in order to meet minimum requirements.
  Instructors should design activities for out-of-class work in a manner that will require
  students to utilize approximately two hours per credit hour to complete. Will instructors and
  institutions be able to quantify how long each out-of-class assignment in different disciplines
  will take individual students equipped with different abilities or time-management skills?
  Departments will need to review syllabi or establish assessments to measure whether students
  spend two hours out of class to earn one credit hour.

 Institutions may also need to set limits for maximum time students are expected to spend out-
  of-class on curricular activities related to the classroom hours of instruction.

 In articulation agreements and in the computation of transfer of credits from other
  institutions, compliance with credit hour minimum standards may have to be monitored.
  Registrars, transfer advisors, and prior learning assessment coordinators should be informed
  and trained to understand the extent of the new regulations.

 In the entitlement and approval of new programs, academic planners at the institution and at
  UW System will need to make sure that minimum credit hour requirements are met,
  particularly when equivalencies are to be substituted for ordinary assignment during
  standard-length semesters or internships, etc. ACIS 1 and AFGP Program Planning
  guidelines may have to be revised.

 Faculty Teaching Assignments and FTE calculations will have to correspond to the new
  regulations in terms of teaching clock hours and credit hours/or equivalencies.

 In cases in which teaching/grading is assigned to teaching assistants/co-instructors or
  laboratory staff, institutions will have to determine whether that time is to be counted as
  faculty instruction.
 Institutions will perhaps need to come up with a published, standard reference conversion
  chart to track equivalent amount of work over a different amount of time and be consistent

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       across programs and departments. In the UW System, this conversion chart may require
       Board of Regents approval.

 Institutions may be well advised to establish binding equivalencies for inter-semester,
  summer programs and study abroad courses. These policies and definitions will have to be
  published online and in catalogs and shared with accrediting agencies.

 Institutions may have to determine how many hours of work the student performs during
  internships or service learning are equivalent to academic learning on a program-to-program
  basis. If an internship, for example, lasts 15 weeks and students spend three hours at the
  placement agency or site, will that count for one credit hour or are such out-of-classroom
  non-academic hours to be counted differently? Institutions may have to establish rules or
  equivalencies for internships, etc., that allow for flexibilities in the length of internships
  during a semester and ensure that the hours spent are equivalent academically to hours spent
  in the classroom or in direct contact with the instructor of a formal academic course.

 Institutions may have to set a policy for what counts as “approximately” 15 weeks. Are 13.5
  or 16 weeks approximate? State regulations and/or UW System rules may determine the
  length of semesters in Wisconsin. If the total time of instruction is not identified as at least
  approximate or more than required, what adjustment in the awarding of credit hours needs to
  be made? Can a ½ credit hour be created for 7.5 weeks of instruction? Must the minimum
  award of a credit hour be at least one or may partial credit hours be earned?

 Finally, institutions should draft a definition of credit hour if they do not have one and
  contact their HLC liaison immediately to receive detailed instructions regarding compliance.


Validity	
  of	
  High	
  School	
  Diplomas	
  (§668.16(p))

Summary:	
  

The new requirements are effective for the 2011-12 award year. The new regulations will apply
to all students, and the 2011-2012 Free Application for Federal Student Aid (FAFSA) form will
include a question about the validity of the high school diploma. Whereas there is currently no
federal requirement for institutions to validate a student’s high school diploma, now institutions
must follow procedures or develop new policies that help registrars and admission officials to
evaluate the validity of a student’s completion of high school and the validity of the High School
Diploma issued. The determination of the validity of high school diplomas refers primarily to the
context of Title IV funds and Federal Student Aid. While institutions have discretion in
determining validity, the decisions must be reasonable and meet common academic practices.
The Department of Education will maintain a list of U.S. public and private high schools that are
proven to provide secondary school education and valid diplomas.

Student documentation or certification is not sufficient. Institutions must validate and verify the
validity of a diploma if they have “reason to believe” that there is a problem. An institution may
have to act on suspicion or doubt if:

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       •   It has knowledge that the diploma was purchased;
       •   It has knowledge that the required work for the diploma is not normally associated with
           secondary school curriculum and little effort was needed to obtain the diploma;
       •   The student gives conflicting information about the high school diploma or the high
           school itself; and
       •   There is a record that the high school has been named or suspected of being a diploma
           mill.

Validation can be institutionalized by obtaining an official school-issued copy of the diploma
and high school transcripts. When evaluating foreign high school diplomas, institutions may
need to seek the expertise of outside organizations that are recognized assessors of high school
diplomas.

Students without validated high school diplomas may receive Title IV funds if they completed
six college credits and the institution’s program passes the Department of Education’s ability-to-
benefit test. (The exact procedure and requirements for “ability-to-benefit” are not clear at this
point).

Impact:	
  

In registrars and admissions operations, specific procedures and steps that lead to validation, i.e.
checking of bona fide high schools and diplomas need to be established or strengthened.
Coordination with Study Abroad programs and international education experts (on-and-off
campus) will have to be established.

Criteria for non-acceptance of high schools and/or diploma need to be established, possibly
system-wide and validated by UW System or the Board of Regents.

Admissions officers and registrar’s office workers need to be trained to identify possibly fake
diplomas and also gain expertise in research. This training could be costly.

Steps	
  to	
  Compliance:	
  

 Each institution should take proactive steps to verify diplomas rather than wait until the
  Department of Education notifies the institution that a particular school or a diploma is
  questionable.

 Each institution should create guidelines in determining what high school diploma
  equivalents will be accepted for purposes of Title IV compliance, such as a GED certificate,
  etc.

 While Ability-to-Benefit Determinations set by the Department of Education establish
  alternatives to the standard high school diploma requirement for federal student aid
  eligibility, institutions may need to determine whether those same Department of


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       Education’s alternatives necessarily also apply to students who do not seek financial aid or
       those that do not seek federal student aid eligibility.

 Prior Learning Assessment practices and regulations in UW System will need to conform
  with criteria of Validity of High School Diplomas, including UW System’s competency-
  based admission standards and ACIS 1 and other UW System and Regent policies.

 An institution should also determine whether translations of diplomas will be accepted and
  by which agencies or translators. If the institution seeks to verify that the student’s high
  school is an entity that indeed provides secondary school education, equivalency rules for
  alternative schools or home-schooling environments need to be established.

 The institution must designate a person/officer who is authorized to validate and verify the
  information required.


Satisfactory	
  Academic	
  Progress	
  (§§668.16,	
  668.34)	
  

Summary:	
  

Institutions are required under the new rules to review student academic progress periodically
and develop a structured and consistent approach to develop a policy measuring student
academic progress.

          Applicable Definition:

          Progress is defined as the student’s pace of progression towards completion of the
          program within the time limits set by the institution.

With regard to eligibility for Federal Student Aid, students can become eligible for Title IV by
satisfactorily completing six semester hours toward a degree or certificate at an institution.
Students not making Satisfactory Academic Progress are not eligible for Title IV aid. Progress is
to be measured at the end of each disbursement period or at least annually to correspond to the
end of a disbursement period. The evaluation of Satisfactory Academic Progress must be based
on qualitative progress, e.g. grade point average and quantitative progress, e.g. credits earned
towards degree completion. Institutions must examine whether non-academic progress at the
time of evaluation at the end of the payment period allows for an appeal process. There are two
options:

1.      If institutions evaluate Satisfactory Academic Progress only annually or less often than
each payment period, they must institute an appeal process and students can ask to be placed on
financial aid probation. After the end of financial aid probation the student must be making
Satisfactory Academic Progress.

2.    For those institutions that evaluate Satisfactory Academic Progress at the end of each
payment status, a warning notice may be used and students may appeal to a review board.

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  -­‐	
  PROGRAM	
  INTEGRITY	
  REGULATIONS	
  
	
  

The institution has flexibility and may impose conditions for a student’s continued eligibility to
receive Title IV aid. That policy must specify the conditions under which a student may appeal
and apply for reconsideration of eligibility for Title IV aid. The appeal must include an
explanation of why the student failed to make Satisfactory Academic Progress and what changes
and adjustments have been made to make it likely that the student will meet the requirements for
Satisfactory Academic Progress at the next evaluation time.

Impact:	
  

Institutions may need to establish a Satisfactory Academic Progress warning mechanism that
informs the student about impending non-eligibility for Federal Student Aid. Reliable
communication channels to reach each student must be established. The Family Educational
Rights and Privacy Act (FERPA) must be observed.

Students may be placed on Financial Aid Warning notice and may be required to make
Satisfactory Academic Progress after one payment period or appeal. Institutions may want to
seek guidance from the Department of Education to determine whether students may be placed
on probation after an appeal, and whether it is the institution or the student who files the appeal
with the Department of Education.

Institutions still have some flexibility to set their own policy, i.e. to monitor a student’s academic
progress more frequently than on an annual basis. However, progress must be measured during
each evaluation.

Steps	
  to	
  Compliance:	
  

 Institutions must decide what they define as “periodically” and “structured” and “consistent.”
  The Board of Regents may supply a binding definition for all UW System institutions. In
  determining these definitions, the advantages, disadvantages, and cost of annual review
  versus bi-annual review will have to be examined.

 The institution may need to develop an individual academic plan for each student to ensure
  that the student will be able to meet Satisfactory Academic Progress standards by a set
  deadline.

Note: A transfer student’s progress can be accepted by counting the hours accepted toward
completion of the academic program and/or hours attempted.


Repeat	
  Coursework	
  (§668.2)	
  

Summary:	
  
Under the new regulations, a student is allowed to repeat courses during a regular semester or
term. Repeat coursework may count toward a student’s full-time enrollment status. Students

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may re-take any course work previously taken to satisfy degree requirements of a program
provided it is not more than one repetition of a course that the student passed previously (e.g. to
improve grade point average). In order to count toward full-time enrollment status under the new
rules, a student may not repeat a previously passed course due to failing other coursework for
counting toward full-time enrollment status. This change in regulations effectively removes a
previous federal requirement that students receive credit for repeated coursework to be aid-
eligible.

Impact:	
  

Campus regulations that allow students to take a class repeatedly until the student reaches a
certain desired grade or improves the student’s GPA will have to be changed.

For students not seeking Federal Student Aid, the repeat-policies may differ if the institution
chooses to maintain separate policies. However, tracking whether a student is financial-aid
eligible or receiving financial aid at the time of designated enrollment periods (often 9 to 12
weeks in advance of the beginning of a semester) might prove to be difficult.

For institutions that do not use the tuition plateau framework, the new regulation may result in
loss of tuition revenue.

Departments/colleges may have to articulate rules for special cases and exceptions. For
example, a student’s enrollment in a repeat course is not intended to be counting toward full-time
enrollment status, but merely to update the student’s skills and competencies required for an
advanced course.

Steps	
  to	
  Compliance:	
  

 Institutions may need to adjust financial aid allocation for students who intend to re-take a
  class for a third time. It will be hard to determine during late enrollment periods whether a
  student takes a class for the first or subsequent time. Computers and data-capture procedures
  will have to be updated.


Student	
  Aid	
  Disbursement	
  and	
  Refunds	
  (§668.164)	
  

Summary:	
  

Institutions must provide a way for a student who is eligible for a federal Pell Grant to obtain or
purchase the required books and supplies by the 7th day of a payment period if, 10 days before
the beginning of the payment period:

       •   The institution could disburse the Title IV/HEA program funds for which the student is
           eligible; and
       •   Presuming the funds were disbursed, the student would have a credit balance.


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Institution may issue bookstore vouchers, make cash disbursements, issue stored-value cards, or
otherwise extend credit to students to make necessary purchases. Institutions have the flexibility
to choose one or more of these methods or a similar method based on administrative needs,
constraints, and evaluation of costs/benefits.

The amount provided will be the lesser of the presumed credit balance or the amount needed by
the student, as determined by the institution. In determining the amount needed, institutions
could use the actual costs of books and supplies or the allowance used in calculating the
student’s cost of attendance.

In determining the presumed credit balance, institutions must consider all Title IV/HEA program
funds that a student is eligible to receive at that time. Institutions do not have to consider aid
from any other sources. To be eligible, a student must meet all eligibility requirements in
subpart C of 34 CFR part 668 at least 10 days before the start of the payment period. Therefore,
a student who has unresolved issues on the SAR or ISIR or has not completed the verification
process is not covered by the regulations.

Institutions must have a policy under which students may opt out of the way in which an
institution provides for the student to purchase books and supplies. If a student opts out, the
institution is not required to provide another way to purchase books and supplies, so long as it
does not otherwise delay providing funds to the student as a credit balance. The student
authorizes the use of Title IV/HEA funds at the time the student uses the method provided by the
institution. This means that an institution does not need to obtain a written authorization from
the student to credit his/her account.

Impact:	
  
These provisions enable students with financial need to purchase books and supplies at the
beginning of the enrollment period and may prevent those students from taking out private loans
to pay for books and supplies that would otherwise be paid by federal Pell Grant funds.

The largest institutional impact will likely be found in the form of personnel resources to: 1)
analyze and make programming changes necessary to identify Pell Grant eligible students with
presumed credit balances, and 2) make the required disbursements. According to the Federal
Register, the programming changes are estimated to take, on average, 3 hours per institution.

UW institutions that operate textbook rental programs and include the costs of required books
and supplies in tuition/fees may meet the requirements of this regulation.

These provisions do not change how institutions handle the Return of Title IV Aid when a
student withdraws. However, if an institution provides bookstore vouchers, expenses for the
required course materials are considered institutional charges because students do not have a real
and reasonable opportunity to purchase the materials from any other place except the institution.
The institution must include the charges for books and supplies from the voucher as institutional


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charges in determining the portion of unearned Title IV/HEA assistance that the institution is
responsible for returning.

Steps	
  to	
  Compliance:	
  

Each institution will need to:

 Determine which federal Pell Grant eligible students would have credit balances if all Title
  IV/HEA funds were disbursed 10 days before the beginning of the payment period;

 Provide a way for these students to obtain or purchase required books and supplies through a
  mechanism that meets the institution’s needs; and

 Develop a policy to allow students to opt out of the selected mechanism.

Provisions are effective for the 2011-12 award year. [Note: For most UW institutions, the fall
2011 semester will be the first enrollment period in which this provision is effective. However,
for "header" UW institutions (i.e., those that count the preceding summer in the academic year),
implementation may need to occur in June 2011.]


R2T4	
  (Return	
  of	
  Title	
  IV	
  Aid)	
  Withdrawal	
  (§668.22(a),	
  (b),	
  (f))	
  
	
  
Summary:	
  

Currently, if a student ceases attendance after completing at least one course in one module
within the term, the student is not considered to have withdrawn and the requirements of §668.22
for the Return of Title IV Aid do not apply. However, other regulatory provisions concerning
recalculation may apply (e.g., revised enrollment status – part time vs. full time).

The following flowchart can be used to determine whether a student in a program offered in
modules is a withdrawal:




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                                WITHDRAWAL DECISION FLOWCHART                        ATTACHMENT 1




          After beginning attendance, did the       If no
       student cease to attend or fail to begin a
                                                                          Not a withdrawal
         course he was scheduled to attend?




                                 If yes




         When the student ceased to attend or           If yes
       failed to begin a course, was the student
            still attending any other courses?




                                  If no




       Did the student confirm attendance in a              If yes
       module beginning later in the period (45
       days, for nonterm and nonstandard term
                      programs)?




                                                                            Withdrawal


                                    If no




(Note: These regulations do not change what it means to complete days for credit-hour programs
or clock hours for clock-hour programs, for the purpose of determining the amount of aid earned
by a withdrawing student.)

A student is not considered to have withdrawn if the student ceased attending the modules he/she
was scheduled to attend, but the institution obtains a written confirmation from the student at the
time of the withdrawal that he/she will attend a module that begins later in the same payment
period or period of enrollment. For non-term or nonstandard-term programs, a confirmation is
valid only if the module the student plans to attend begins no later than 45 calendar days after the
end of the module the student ceased attending.



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If the institution has not obtained a written confirmation that the student intends to return within
that time period, the student is considered to have withdrawn. If an institution obtains a written
confirmation but the student does not return as scheduled, the student is considered to have
withdrawn from the payment period or period of enrollment. Any return amounts are calculated
as if the student had not provided written confirmation of future attendance (i.e., back-dated
calculation). If a student does not provide confirmation of his/her intent to return but does return
within 45 days, the institution must “undo” the Return of Title IV funds calculation and treat that
student as if he/she had not ceased attendance.

In addition, the Program Integrity Regulations indicate that if an institution is required to take
attendance or requires that attendance be taken for some students, the institution must use its
attendance records to determine a withdrawal date.

Impact:	
  

The Program Integrity provisions may increase the number of Title IV return calculations,
because the withdrawal ‘trigger’ has been extended throughout the payment or enrollment
period, instead of the completion of just one module. However, institutions have always had to
track students in module programs beyond the first course/module to determine whether the
student’s enrollment status changed and Title IV recalculations were necessary.

Additional effort may also be needed to obtain confirmation of anticipated return dates and
monitor whether that return actually occurred.

The attendance requirement will have little to no impact on institutions. If attendance is taken
for a particular course or for a particular instructor, those attendance records are already used by
institutions in calculating withdrawal dates.

Steps	
  to	
  Compliance:	
  

 Institutions will need to develop processes for obtaining confirmation of anticipated return
  dates and monitoring whether students actually return at that time.


Gainful	
  Employment	
  (§§600.2,	
  600.4,	
  668.6)	
  
       [NOTE: additional regulations are pending and expected to be released in the near future.]

Summary:	
  
	
  
The new regulations apply to programs at least one-academic-year in length that lead to a
certificate, degree, or other recognized educational credential and that prepare a student for
gainful employment in a recognized occupation. These rules do not cover: (1) degree programs
or (2) two-year programs that are fully transferable to a baccalaureate degree. Certain programs
provided by proprietary institutions of higher education or postsecondary vocational institutions
are also subject to this requirement. A recognized occupation is either: (1) identified by a
Standard Occupational Classification (SOC) code established by the Office of Management and

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Budget or an Occupational Information Network O*NET–SOC code established by the
Department of Labor; or (2) determined by the Secretary of Education in consultation with the
Secretary of Labor to be a recognized occupation.
For covered programs, institutions must report:

       •   Identifying information regarding which students are enrolled in a program and the
           program’s CIP code.
       •   For students completing a program.
               • The program name and CIP code;
               • Date student completed the program;
               • Amount student received from private educational loans and institutional
                   financing plans that the student owes to the institution upon completing the
                   program; and,
               • Information whether the student matriculated to a higher degree program at the
                   institution or another institution.
       •   By name and CIP code for each program offered by the institution, the total number of
           students who are enrolled in the program at the end of each award year and identifying
           information for those students.
Institutions must report this information for the 2006-07 through 2009-10 award years by
10/01/2011, and by the date established by the Secretary of Education for information for
subsequent award years.

For each covered program, the institution must provide prospective students with the following
information, including posting it prominently on its website and including in promotional
materials:

       •   Occupations that the program prepares students to enter;
       •   On-time graduation rate for students entering the program (using the calculation included
           in the rules);
       •   Cost of the program, including tuition & fees, books, supplies, and room & board;
       •   Placement rate for students completing the program as determined under a methodology
           developed by the National Center for Education Statistics;

       •   Median loan debt incurred by students completing the program. Median loan debt from
           Title IV/HEA program loans, private educational loans and institutional financing plans
           must be reported separately; and,
       •   The Department of Education will develop a disclosure form that institutions will be
           required to use.
Institutions must also calculate an on-time completion rate for each covered program and must
notify the Department of Education at least 90 days before the first day of classes when it intends
to add a new program that prepares students for gainful employment in a recognized occupation.
The institution must also provide certain information to the Department of Education regarding
any new programs


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Impact:	
  
	
  
Depending on the number of covered programs at an institution, the impact could be significant.
Institutions will need to determine which programs are covered by this rule, monitor student
progress and develop the required information for each student who completes the program.
Institutions will also be required to calculate and make the required debt and graduation rate
information rate information available. Institutions may need to designate a compliance officer
relating to this rule.

Steps	
  to	
  Compliance:	
  

 Institutions should identify all covered programs and develop procedures to assess whether
  any proposed programs would be covered by this rule. For covered programs, institutions
  should review the regulations, and determine the relevant data and other requirements (such
  as required disclosures in publications and websites).
 Institutions may want to identify a compliance officer or designate one individual or office
  with ensuring compliance.
 Standard procedures should be developed so that the necessary calculations and reports
  become part of general business operations and processes.


Student	
  Eligibility	
  &	
  Aid	
  Determination:	
  Ability	
  to	
  Benefit/Approval	
  of	
  
Independent	
  Tests	
  (§668.32,	
  Subpart	
  J	
  of	
  Part	
  668	
  (§668.141,	
  et.seq.)	
  
	
  
Summary:	
  
	
  
These sections change how students become eligible for Title IV financial aid (Ability to
Benefit). Section 668.32 requires students, in order to qualify for aid under the former rules,
meet certain programmatic and other (such as satisfactory academic progress) requirements and:

       •   Have a high school diploma or its recognized equivalent (See Validity of High School
           Diploma herein);
       •   Have obtained a passing score on an independently administered test in accordance with
           subpart J of section 668 (see discussion below);
       •   Be enrolled in an eligible institution that participates in a State “process” approved by the
           Secretary under subpart J of section 668 (see discussion below); or,
       •   Have been home-schooled, and either obtained a State secondary school completion
           credential for home school or have completed a secondary school education in a home
           school setting that qualifies as an exemption from State compulsory attendance
           requirements.

The rules add a fifth mechanism for qualification to §668.32:




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       •   The student has satisfactorily completed 6 semester hours, 6 trimester hours, 6 quarter
           hours, or 225 clock hours that are applicable toward a degree or certificate offered by the
           institution.

In addition, the rules amend subpart J of section 668, which governs the approval of
independently administered tests and the approval of State processes to determine eligibility for
Title IV aid for students without a high school diploma or a recognized equivalent (one of the
five mechanisms for assessing Ability to Benefit). This subpart covers submission of tests to the
Secretary of Education and the requirements for a successful application and approval of a test,
including the determination of passing rates. An institution is liable for Title IV program funds
disbursed to a student whose eligibility is determined through the use of an independently
administered test if:

       •   The institution used a test that was not administered independently;
       •   The institution or an employee of the institution compromised the testing process in any
           way; or,
       •   The institution is unable to document that the student received a passing score on an
           approved test.

Subpart J also provides for the approval of State processes as alternatives to using or requiring a
passing score on an independently administered test. A State must demonstrate that students
admitted under the process have a success rate that is within 95 percent of the success rate of
students with high school diplomas. Participating institutions must provide each student without
a high school diploma or its equivalent who are admitted through this process with the following
services:

       •   Orientation regarding the institution's academic standards and requirements, and student
           rights;
       •   Assessment of each student's existing capabilities through means other than a single
           standardized test;
       •   Tutoring in basic verbal and quantitative skills, if appropriate;
       •   Assistance in developing educational goals;
       •   Counseling, including counseling regarding the appropriate class level for that student
           given the student's individual's capabilities; and,
       •   Follow-up by teachers and counselors regarding the student's classroom performance and
           satisfactory progress toward program completion.

As part of its process, States that establish a process must:

       •   Annually monitor each participating institution's compliance with the requirements and
           standards contained in the State's process;
       •   Require corrective action if an institution is found to be in noncompliance; and,
       •   Terminate an institution from the State process if the institution refuses or fails to comply
           with the process requirements.



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Impact:	
  

For those students using the new Ability to Benefit/Eligibility option, the credits/hours used for
establishing eligibility for Title IV aid funds may also count towards a degree/program
completion. Therefore, a student cannot be paid Title IV funds for the payment period in which
these 6 credits are earned/hours accumulated, because the student has not established eligibility
under the Ability to Benefit until after the credits/hours are satisfactorily completed. Although
the coursework does not have to be applicable towards the particular program the student intends
to complete, it is expected that the coursework be applicable to a Title IV-eligible program at the
institution.
The changes to subpart J (approval/use of independently administered tests and State processes)
impose requirements and liabilities on institutions. For example, institutions will be responsible
for certain issues associated with an independent test. In those instances, an institution would be
liable for Title IV aid disbursed to affected students. In addition, the new rules require
institutions to provide certain services to those students who qualify using a State-established
process (see Summary section).

Steps	
  to	
  Compliance:	
  
	
  
 Institutions should develop a procedure for identifying and monitoring students who enroll
  without a high school diploma or equivalent who are attempting to become eligible for Title
  IV aid by successfully completing 6 semester hours applicable toward a degree or certificate
  offered by the institution. This will ensure that students are not awarded aid prior to
  establishing Ability to Benefit/Eligibility and students do receive aid once eligibility is
  achieved.
 Institutions should also establish procedures to ensure that any test accepted as evidence of
  Ability to Benefit has been approved by the Secretary of Education and continues to be
  considered valid. Institutions must also document a student’s score and ensure that it is
  considered passing. If an institution uses a State process, it must ensure that the required
  95% success rate is maintained by the State, and monitor/verify that each student admitted
  under the process receives the set of services required by the rules.


Verification	
  and	
  Updating	
  of	
  Student	
  Aid	
  Application	
  Information	
  
(Subpart	
  E	
  of	
  Part	
  668)	
  	
  

Summary:	
  
	
  
In general, the regulations require institutions to verify the information submitted by applications
for financial assistance under the subsidized student financial assistance programs. Applicants
are required to provide the documents or information requested by the Secretary of Education or
the institution.
        Applicable Definitions:

                                           Page 30 of 35
	
  
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        Subsidized student financial assistance programs are defined as Title IV/HEA programs
        for which eligibility is determined on the basis of an applicant’s Expected Family
        Contribution (EFC). These programs include the Federal Pell Grant, Federal
        Supplemental Educational Opportunity Grant (FSEOG), Federal Work-Study (FWS),
        Federal Perkins Loan, and Direct Subsidized Loan programs.
        Unsubsidized student financial assistance programs are defined as Title IV, HEA
        programs for which eligibility is not based on an applicant’s Expected Family
        Contribution (EFC). These programs include the Teacher Education Assistance for
        College and Higher Education (TEACH) Grant, Direct Unsubsidized Loan, and Direct
        PLUS Loan programs.

Impact:	
  
	
  
If an institution has any reason to believe that an applicant’s FAFSA information is inaccurate,
the institution should not disburse funds until the information is verified and any corrections are
made. Changes in an applicant’s information may require the applicant or the institution to
notify the Department of Education and require recalculations. If an applicant fails to provide
the requested documentation within a reasonable time period established by the institution, the
institution may not make certain disbursements, employ or continue to employ or allow an
employer to employ the application under FWS. The applicant may also be required to repay the
institution any Federal Perkins Loan or FSEOG received for that award year. Institutions are not
required to verify an applicant’s FAFSA information if, for example, the applicant is eligible to
receive only unsubsidized student financial assistance.

Steps	
  to	
  Compliance:	
  
	
  
Institution policies and procedures for verifying an applicant’s FAFSA information must be
reviewed to ensure the policies and procedures include:
 The time period within which an applicant must provide any documentation requested by the
  institution;

 The consequences of an applicant’s failure to provide the requested documentation within the
  specified time period;

 The method by which the institution notifies an applicant of the results of its verification if,
  as a result of the verification, the applicant’s EFC changes and results in a change in the
  amount of the applicant’s assistance;

 The procedures the institution will follow or the procedures the institution will require an
  applicant to follow to correct FAFSA information determined to be in error;

 The procedures for making referrals to the Office of Inspector General of the Department of
  Education for investigation if there is any credible information that an applicant for Title
  IV/HEA program assistance may have engaged in fraud or other criminal conduct in
  connection with the application;

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 The procedures the institution will follow in furnishing, in a timely manner, each applicant
  whose FAFSA information is selected for verification, a clear explanation of the
  documentation needed to satisfy the verification requirements, the applicant’s responsibilities
  with respect to the verification of FAFSA information including the deadlines for completing
  any actions and the consequences for failing to complete any required action; and

 A statement that an applicant whose FAFSA information is selected for verification is
  required to complete verification before the institution exercises any authority to make
  changes to the applicant’s cost of attendance or to the values of the data items required to
  calculate the EFC.
The institution should review the time period for applicants to provide requested information and
evaluate procedures for verifying financial aid application information. Employees working in
financial aid should be instructed on how to address requests for verification from the
Department.


Misrepresentation	
  (Subpart	
  F	
  of	
  Part	
  668)	
  	
  

Summary:	
  
	
  
The prior regulations provided a review procedure whereby the Department of Education’s
“designated department official” reviewed allegations or complaints of misrepresentation to
determine the factual basis and seriousness. If the department official found the
misrepresentation to be minor and easily corrected, the official informed the institution and
sought an informal correction. If the designated department official found a substantial
misrepresentation as to the nature of the educational programs, the financial charges of the
institution or the employability of its graduates, the department official initiated action against
the institution which could include a fine or limit, suspension, or termination of the institution’s
eligibility to participate in the Title IV/HEA programs.
The new regulations remove the review procedure and provide the Secretary of the Department
of Education with the ability to take action against an eligible institution that has engaged in
substantial misrepresentation. An eligible institution is deemed to have engaged in substantial
misrepresentation when the institution itself, one of its representatives, or any ineligible
institution, organization, or person with whom the eligible institution has an agreement to
provide educational programs, marketing, advertising, recruiting or admissions services, makes a
substantial misrepresentation regarding the eligible institution, including about the nature of its
educational program, its financial charges, or the employability of its graduates.
        Applicable Definitions:
        Substantial misrepresentation is defined as any misrepresentation on which the person to
        whom it was made could reasonably be expected to rely, or has reasonably relied, to that
        person’s detriment.


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  REGULATIONS	
  
	
  
          Misrepresentation is defined as any false, erroneous or misleading statement an eligible
          institution, one of its representatives, or any ineligible institution, organization, or person
          with whom the eligible institution has an agreement to provide educational programs, or
          to provide marketing, advertising, recruiting or admissions services makes directly or
          indirectly to a student, prospective student or any member of the public, or to an
          accrediting agency, to a State agency, or to the Secretary. A misleading statement
          includes any statement that has the likelihood or tendency to deceive or confuse. A
          statement is any communication made in writing, visually, orally, or through other
          means. Misrepresentation includes the dissemination of a student endorsement or
          testimonial that a student gives either under duress or because the institution required the
          student to make such an endorsement or testimonial to participate in a program.

Impact:	
  
	
  
A violation may exist if the statement has a “tendency to deceive or confuse.” Moreover, a
violation may exist as a result of a single or isolated incident and even mistakes or inadvertent
statements may result in a violation. It is up to the Department of Education to determine if any
misrepresentation occurred and, if so, whether the misrepresentation is minor or the more serious
“substantial misrepresentation,” and the appropriate remedy for the misrepresentation.

If the designated department official determines that an eligible institution has engaged in
“misrepresentation,” it appears that the department will continue to address these issues on an
informal basis as before whereby the designated official would inform the institution and seek an
informal correction.

If the designated department official determines that an eligible institution has engaged in the
more serious “substantial misrepresentation,” the Secretary of the Department of Education may:
(1) revoke the eligible institution’s program participation agreement; (2) impose limitations on
the institution’s participation in the Title IV/HEA programs; (3) deny participation applications
made on behalf of the institution; or (4) initiate a proceeding against the eligible institution under
subpart G of part 668, which may include fining the institution, suspending the institution, or
terminating participation.

Steps	
  to	
  Compliance:	
  

 Institutions should educate all representatives and affiliates on proper recruitment and
  admissions communications and the consequences of non-compliance.

 Institutions should also consider providing representatives and affiliates with a point of
       contact for questions to avoid non-compliance.




                                               Page 33 of 35
	
  
                                                                University	
  of	
  Wisconsin	
  System	
  Administration	
  
                                                 Working	
  Group	
  Report	
  -­‐	
  PROGRAM	
  INTEGRITY	
  REGULATIONS	
  
	
  
Written	
  Arrangements	
  Between	
  Institutions	
  (§§668.5,	
  668.43)	
  
	
  
Summary:	
  

The provision governs written arrangements between UW institutions and other institutions to
provide part of an education program to students enrolled at UW institutions. Institutions are
prohibited from contracting with another entity whose eligibility under Title IV has been
revoked.

When an institution enters into a written arrangement with an institution or organization to
provide part of the educational program to its enrolled students, the degree-granting institution
must provide a description of written arrangements to enrolled and prospective students,
including but not limited to the following:

       •   Portion of the educational program that the institution is not providing;
       •   Name and location of other institutions that are providing the other portion of the
           educational program;
       •   Method of delivery of the portion of the educational program provided by the other
           institution; and
       •   Estimated additional costs that students may incur from enrolling in a program that is
           provided in part by another institution (e.g., the Comments provide that “when the
           coursework provided through the written arrangement is provided only, it would be
           appropriate to include estimated additional costs such as the costs of purchasing a
           computer and obtaining Internet access”).

These disclosures must be clear and understandable. The disclosure requirements do not apply
to individual, student-initiated written arrangements.

Impact:	
  

The rule requires an additional audit of programs involving written arrangements with other
entities that are providing educational programs to UW students, and disclosures to students
when these arrangements exist. Institutions should consider whether other study-abroad or
exchange programs apply, and if so, confirm that the proper disclosures are provided.

Steps	
  to	
  Compliance:	
  

 Institutions should designate an academic officer to identify all written arrangements with
  other institutions to provide part of an education program, to ensure that (1) the institution
  providing the education program has not had its eligibility under Title IV revoked, and (2) to
  ensure that students are provided the required disclosures about the educational program
  provided by another entity.




                                              Page 34 of 35
	
  
                                                                   University	
  of	
  Wisconsin	
  System	
  Administration	
  
                                                    Working	
  Group	
  Report	
  -­‐	
  PROGRAM	
  INTEGRITY	
  REGULATIONS	
  
	
  
	
  


ATTACHMENTS	
  TO	
  REPORT	
  	
  

        Program	
  Integrity	
  Regulations	
  (by	
  CFR	
  section)	
  

        State	
  Approval	
  Regulations	
  for	
  Distance	
  Education:	
  	
  A	
  “Starter	
  List”	
  
         (revised	
  March	
  17,	
  2011)	
  	
  




                                                Page 35 of 35
	
  

				
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