Tennessee Higher Education Commission

1. Tennessee Higher Education Commission Tennessee Higher Education Commission Division of Postsecondary School Authorization Presentation to: Tennessee Higher Education Commission Federal Program Integrity Rules Thursday, April 28, 2011

2. Tennessee Higher Education Commission Overview • On October 29, 2010, the U.S. Department of Education published new regulations commonly referred to as the “program integrity regulations.” • The Department’s October 28, 2010 press release states that the rules are intended: “to strengthen federal student aid programs at for-profit, nonprofit and public institutions by protecting students from aggressive or misleading recruiting practices, providing consumers with better information about the effectiveness of career college and training programs, and ensuring that only eligible students or programs receive aid.”

3. Tennessee Higher Education Commission Topics Covered by the Regulations Holding programs accountable for preparing students for gainful employment Protecting students from misleading or overly aggressive recruiting practices, and clarifying state oversight responsibilities Ensuring that only eligible students receive federal funds Clarifying the courses that are eligible for federal aid, and the amount of aid that is appropriate

4. Tennessee Higher Education Commission Legally Authorized • In order to be eligible to participate in federal financial aid programs institutions must be legally authorized. • This requirement applies to all eligible institutions and includes, for example: • Institutions of higher education that are public institutions or private nonprofit institutions that are physically located in a state, that are accredited, and that offer programs to students who have a high school diploma that lead to baccalaureate degrees, e.g., University of Tennessee Knoxville, University of Memphis and Vanderbilt University; • Proprietary institutions of higher education that are neither public nor private nonprofit entities, that are physically located in a state, that are accredited, that offer an eligible program to students that have a high school diploma, and that have been in existence for at least 2 years, e.g., University of Phoenix and Argosy University • Postsecondary vocational institutions that are public institutions or private nonprofit institutions that are physically located in a state, that are accredited, that offer an eligible program to students who have a high school diploma, and that have been in existence for at least 2 years , e.g., Tennessee Technology Center at Nashville.

5. Tennessee Higher Education Commission What is “Legally Authorized”? • Established by name as an educational institution by a state through a charter, statute, constitutional provision, or other action and is authorized to operate postsecondary programs and • Is compliant with state approval requirements or • Is exempt from state requirements based on accreditation or being in operation for at least 20 years • (34 C.F.R. § 600.9(a)(1)(i)) There has to be a state process to review and act on complaints concerning the institution. AND • Established by a state to conduct business or to operate as a nonprofit charitable organization and • Approved by the state to offer postsecondary education and • Not exempt from approval requirements based on accreditation, years of operation, or comparable exemption • (34 C.F.R. § 600.9(a)(1)(ii)) The institution meets one of the following provisions. Exempt from state authorization as a religious institution under the state constitution or state law (34 C.F.R. § 600.9(b))

6. Tennessee Higher Education Commission Effect of Regulations on Distance Education • 34 C.F.R. § 600.9(c) states: • This provision requires that a distance education provider must be compliant with the authorization requirements of any state where the institution’s students reside. This requirement includes public institutions. • Although this rule is effective July 1, 2011, the Department recently issued a Dear Colleague Letter (GEN-11-11) explaining that it “will not initiate any action to establish repayment liabilities or limit student eligibility for distance education activities undertaken before July 1, 2014, so long as the institution is making good faith efforts to identify and obtain necessary State authorizations before that date.” “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 any State requirement for it to be legally offering postsecondary distance or correspondence education in that State. An institution must be able to document to the Secretary the State’s approval upon request.”

7. Tennessee Higher Education Commission Additional Information To read more about Distance Education authorization requirements in Tennessee, please visit the Commission’s home page and click on “NEW FEDERAL REGULATIONS: Distance Education Authorization.”