Inside the Crystal Ball: Positioning Your School to Succeed in Tomorrow’s Regulatory Environment

1. Inside the Crystal Ball:Positioning Your School to Succeed in Tomorrow’s Regulatory Environment Presented by: Jamie Morley, Ph.D. Spring Zutes

2. Agenda • Impending Regulatory Environment • Reauthorization of the Higher Education Act • Negotiated Rulemaking • Gainful Employment • Today’s Newest Regulatory Changes • Strategies to Survive and Thrive

3. Higher Education Act (HEA) • The Higher Education Act is the law that covers how federal dollars are awarded to colleges and students. • HEA was signed into law and has been reauthorized nine times • Scheduled to be renewed again in 2014 The Triad

4. Negotiated Rulemaking "Negotiated rulemaking" (Neg Reg) is a process by which the federal government consults with key constituents as part of drafting or revising regulations. Failure by the committee to reach unanimous agreement on all regulatory proposals being considered means USDE is free to propose new regulations or revise the set of regulations considered by the committee.

5. Negotiated Rulemaking Topics Negotiated Rulemaking on Gainful Employment Session 1: September 9-11, 2013Session 2: November 18-20, 2013 – (Rescheduled due to government shutdown) Proposed Negotiated Rulemaking Sessions • Campus safety and security reporting requirements • State authorization of programs offered through distance education or correspondence education • State authorization for foreign locations of institutions located in a state • Clock to credit hour conversion • Definition of “adverse credit” for borrowers in the federal Direct PLUS Loan Programs • Campus-based federal student aid program reforms. Get Involved!!!

6. Gainful Employment Definitions Debt-to-Earnings Rates aDTE Annual debt-to-earnings = annual loan payment Annual earnings dDTE Discretionary debt-to-earnings = annual loan payment Annual earnings − (1.5  Poverty Guideline) Of the close to 6,000 programs that were previously submitted to SSA, over 4,000 did not meet these protocols and could not be resubmitted. These programs have been excluded from the new calculations.  Additionally, there were over 5,000 programs that were not previously submitted to the SSA because the student count was fewer than the previous rule’s minimum program size of 30 but now meet the new minimum of 10 students under the draft regulation. 

7. Proposed GE Rates (2011 vs. 2013)

8. Neg Reg Proposed GE Rates

9. Additional HEA Hot Spots • Imposing tougher requirements on states to finance higher education and state authorization • Reinstating year-round Pell Grants • Accountability measures for all schools • Creation of a federal database of student academic progress • DOE approval of education programs (usurping of academic freedom)

10. Additional HEA Hot Spots • Implementation of Gainful Employment Regulations Includes proposed definition for Job Placement -- “within 180 days of completion/graduation the student has been employed for at least 13 weeks with the employer in a full-time paid position in the field or related field of study.” • Changes to 90/10 related to threshold and segmentation of funds for marketing • Dismantling of Existing System of Accreditation (peer review process) • Eliminating FSA gatekeeping role

11. President’s Plan for HEA Paying for Performance Tie financial aid to college performance, starting with publishing new college ratings before the 2015 school year. Challenge states to fund public colleges based on performance. Hold students and colleges receiving student aid responsible for making progress toward a degree.

12. President’s Plan for HEA Promoting Innovation and Competition Challenge colleges to offer students a greater range of affordable, high-quality options than they do today. Give consumers clear, transparent information on college performance to help them make the decisions that work best for them. Encourage innovation by stripping away unnecessary regulations.

13. President’s Plan for HEA Ensuring that Student Debt Remains Affordable Help ensure borrowers can afford their federal student loan debt by allowing all borrowers to cap their payments at 10 percent of their monthly income. Reach out to struggling borrowers to ensure that they are aware of the flexible options available to help them to repay their debt.

14. 2013 Change: Direct Assessment • Colleges can award federal student aid based on measured competencies instead of credit hours • Direct assessment of learning. • Competency-based programs "have the potential for assuring the quality and extent of learning, shortening the time to degree/certificate completion, developing stackable credentials ... and reducing the overall cost of education.” • Programs will have to map their competencies back to credit hours, and accreditors will have to agree with institutions' assessment of the equivalencies.

15. HEA Survival Strategies • Admissions • Adopt more selective admission policies. • Increase application fees. • Recruit at companies that have employer-paid tuition programs. • Enroll international students. • Create try-before-you-buy programs.

16. HEA Survival Strategies • Student Financing • Assist students with applying for scholarships. • Offer short-term tuition installment plans as less expensive as debt. • Promote the use of college savings plans. • Modify your Award Letter to encourage more responsible borrowing. • Institute a strong financial literacy program. • Require debt counseling for students borrowing > $5,000

17. HEA Survival Strategies • Academic and Student Services • Eliminate underperforming programs. • Reduce academic credential level from Associate degree to Certificate/Diploma to reduce length, cost and borrowing potential. • Aggressively pursue dropouts who were close to completion to re-enter. Institute a re-entry scholarship program. • Encourage unemployed students to volunteer to obtain experience. Volunteering at AmeriCorps can reduce federal education debt.

18. HEA Survival Strategies • Academic and Student Services • Measure SAP more frequently. • Beef-up the career services offered to students. Get creative! • Include business etiquette skills into the curriculum.

19. HEA Survival Strategies • 90/10 or 85/15 • Purchase a non-eligible Title IV School, or foreign school, so that their revenue can be added to yours. • Increase emphasis on internships that bring revenue – MT, cosmetology, graphic design, culinary. • Partner with employers for tuition assistance in continuing education opportunities. • Offer short programs or seminars to increase non Title IV revenue. • Last resort – Negotiate a sale of account balances to a collection agency for cash up front to be included in your 90/10 calculation.

20. Final Thoughts – Change is coming • Get Involved • Invite legislators to your school • Invite legislators to your graduations • Send notices to your legislators to announce employment success stories of your graduates • Add legislators to your Alumni Newsletter mailing list • Attend Hill Day • Nominate a representative for other Neg Reg topics • For information about the neg reg process or the nomination process, contact: Wendy Macias, U.S. Department of Education, 1990 K Street NW., room 8017, Washington, DC 20006. (202) 502-7526 or by email: wendy.macias@ed.gov.http://www2.ed.gov/policy/highered/reg/hearulemaking/ hea08/neg-reg-faq.html.

21. Questions? www.educationconsultingsolutions.com Specializing in accreditation, compliance, distance education, Title IV, and college operations.