Significant Changes in Final Rules for Return to Title IV

By Rick Cox

The Education Department has published a final rules federal register on distance education and innovation that contains significant changes on distance education, Return to Title IV, clock to credit hour conversion requirements, SAP and CBE/Direct Assessment Programs. The new rules were published on September 2, 2020, and are eligible for early implementation. Otherwise, they’re effective July 1, 2021.

This blog focuses on changes to Return to Title IV and LOAs. For an in-depth summary on all final rules published on September 2, please see Global’s blog posted on April 28.

ED has added a definition of subscription-based programs. The changes to R2T4 and LOAs that reference subscription-based programs will apply only if that program meets the new definition of a subscription-based program and a college uses the subscription-based disbursement method instead of disbursing on a term basis.

Modules:
ED is eliminating any reference of modules for nonterm and subscription-based programs. For Title IV purposes, modules will only pertain to standard term and nonstandard term programs.

For standard term and nonstandard term programs, the program is considered made up of modules if the program has any courses that do not span the entire length of the payment period. The determination is made on a payment period (or period of enrollment, if appropriate) basis. For programs that have classes that span the entire length of the payment period as well as classes that don’t span the entire length of the payment period, the program is considered made up of mods. However, if the student is enrolled in a payment period that includes only classes that span the entire payment period, the program is not treated as made up of modules for that specific payment period.

When a student does or does not have to be considered a withdrawal:

Standard Term and Nonstandard Term Programs

For standard term and nonstandard term programs, excluding subscription-based programs, a student must be considered withdrawn if the student has ceased attendance and is not scheduled to begin another course in that payment period within 45 days after the end of the module they ceased attending. In order to not be considered withdrawn under this requirement, the institution must obtain written confirmation at the time of withdrawal that the student will resume attendance within that payment period and within the 45-day period. This is a change for standard term programs (this requirement already exists for nonstandard term programs). Currently, in a standard term program, the student would not have to be considered withdrawn if the institution obtains written confirmation at the time of withdrawal that the student will resume attending a module later in that same payment period. Now, they must resume attendance within 45 days of the end of the module in which they ceased attending.

To illustrate these changes, let’s use an example of a student in a standard term semester-based program in which each semester is comprised of four 4-week modules. The semester dates are 8/30/21 through 12/17/21. The mod dates are 8/30/21-9/24/21, 9/27/21-10/22/21, 10/25/21-11/19/21 and 11/22/21-12/17/21. A student ceases attendance in the 1st module (LDA is 9/15/21) but the student provides written confirmation that they will attend the 4th module. Under the existing regulations, this student would not be considered a withdrawal because written confirmation was provided indicating they will resume attending in that same payment period. However, under the new regulations, this student must be treated as a withdrawal because they are not scheduled to resume attending until 11/22/21, which is more than 45 days after the end of the 1st module (the 4th mod begins 58 days after the 9/24/21 ending date of the 1st module in which the student withdrew). If the student resumed attending in the 3rd module beginning 10/25/21, the student would not have to be treated as a withdrawal because that is within 45 days of 9/24/21, the ending date of the 1st module in which the student withdrew.

Nonterm and Subscription-Based Programs:

For nonterm programs and subscription-based programs, a student is not considered withdrawn if the institution obtains written confirmation at the time of withdrawal that the student will resume attendance provided the student will resume attending within 60 calendar days after the student ceased attendance. This is a change for nonterm programs. As indicated above, ED has removed all references to modules for nonterm programs. Currently, a student in a nonterm program that uses modules must resume attendance within 45 days of the end of the module in which they ceased attending. Under the new regulations, the student must resume attending within 60 calendar days of the date they ceased attending.

To illustrate, let’s use a student enrolled in a nonterm program that uses 5-week modules and combines three modules to make a 15-week payment period. The payment period dates are 7/19/21 through 11/5/21 and there is a 1-week summer break during this payment period. The module dates are 7/19/21-8/27/21 (includes a 1-week summer break), 8/30/21-10/4/21 and 10/04/21-11/5/21. A student withdraws during the 2nd week of the 1st module (LDA 7/27/21) but provides written confirmation they will attend the October module. Under the current regulations, this student would not have to be considered a withdrawal because the student will resume attending on 10/4/21, which is within 45 days after the ending date of the 1st module (8/27/21) in which the student withdrew. However, under the new regulations, the student must be considered a withdrawal. The student ceased attending on 7/27/21 and the next course begins on 10/04/21, which is 69 days. Because this is more than 60 days, the student must be considered a withdrawal.

Exceptions:

ED will add two new exceptions to the requirements for determining a student has withdrawn:

1. The student completes all the requirements for graduation from his/her program before completing the days or hours in the period that he/she was schedule to complete; and 2) for a program offered in modules, a student will not be considered withdrawn if the student successfully (at least one passing grade) completes one module that includes 49% or more of the number of days in the payment period; successfully completes a combination of modules that when combined contain 49% or more of the number of days in the payment period; or successfully completes coursework that is equal to or greater than the coursework required for the institution’s definition of a half-time student under 668.2 for the payment period. For the 2nd exception, “successfully” means passing grades. In calculating the percentage of completion for this purpose only, schools will exclude scheduled breaks of 5 days or more just as they currently do but they will also exclude all days between modules.

Days in the Denominator for R2T4:

For term-based programs made up of modules, the final rules make a significant change on determining the number of days to be used in the denominator of the R2T4 calculation. Currently, this is based on the student’s schedule at the time of withdrawal. As such, future mods in that payment period could have been excluded from the denominator if the student had withdrawn from those mods while still in attendance. Under the proposed change, the days in the denominator will be based on the mods in which they were enrolled that were used to determine eligibility for Title IV aid. Schools can choose to have an “R2T4 Freeze Date” for which the student’s enrollment schedule at a fixed point is used to determine the number of days the student is scheduled to attend for R2T4 purposes. If a school elects not to have an “R2T4 Freeze Date,” fluctuations in a student’s enrollment status (adding or dropping coursework throughout the period) may cause the number of days to be used in the denominator to change.

LOA – Subscription Based Programs:

Subscription-based programs will be included in the types of programs that do not require the student to return to the same coursework in which the student was enrolled when the LOA began (this should only apply to programs that use the subscription period disbursement method).

Technical Changes:

The final rules make some technical changes as well as remove outdated references to old programs that are no longer applicable (i.e., FFEL, ACG, SMART and Perkins) and will add IASG to the types of grants that are included in the R2T4 calculation and insert those grants as the 2nd type of grant to be returned by an institution in the order of returns (follows Pell and precedes FSEOG).

Global recommends all schools review this federal register in its entirety to ensure compliance with all changes and new requirements. To access the final rules federal register, click here

Rick Cox is Global’s Executive Director of Regulatory Affairs and Compliance.