Program Participation Agreement (PPA)

GE Program Length

This new provision emphasizes the maximum duration of programs that can lead to gainful employment to qualify for Title IV student aid. In the past, GE programs were eligible to offer Title IV aid as long as they did not exceed 150% of the minimum required clock hours set by the state for the occupation the program prepares students for. Effective July 1, 2024, the maximum program length is limited to 100% of the state’s minimum required clock or credit hours.

There is an exception allowing a program’s length to be based on another state’s minimum required clock or credit hours, provided the program meets specific criteria related to the majority of their students’ residency, employment, or intended employment locations. Additionally, there are exceptions to these new rules for occupations that require completion of an associate degree or higher for state entry-level positions, or where the program is delivered entirely through distance education or correspondence courses.

This new provision emphasizes the maximum duration of programs that can lead to gainful employment to qualify for Title IV student aid. In the past, GE programs were eligible to offer Title IV aid as long as they did not exceed 150% of the minimum required clock hours set by the state for the occupation the program prepares students for. Effective July 1, 2024, the maximum program length is limited to 100% of the state’s minimum required clock or credit hours.

There is an exception allowing a program’s length to be based on another state’s minimum required clock or credit hours, provided the program meets specific criteria related to the majority of their students’ residency, employment, or intended employment locations. Additionally, there are exceptions to these new rules for occupations that require completion of an associate degree or higher for state entry-level positions, or where the program is delivered entirely through distance education or correspondence courses.

The important thing that must be noted is that institutions can continue to offer programs with longer lengths to students who have enrolled before July 1, 2024, but can enroll new students (enrolling on or after July 1) in shorter program lengths only. Although the Department of Education (ED) has not officially postponed any requirements, they are open to considering individual circumstances and challenges faced by institutions. If the institution can provide documentation regarding the challenges, ED may be flexible in its enforcement actions against them.

ED stated that “Title IV eligible programs must be programmatically accredited, satisfy educational requirements for professional licensure of certification, and comply with state laws related to closure.”

Financial aid administrators can help colleges by making them aware of these changes, so that they can have an action plan in place for compliance with these regulations.

Transcript Withholding

With this new regulation, now schools cannot withhold the student’s transcript solely because the student owes a balance to the school, which is caused by errors made by the school in managing Title IV programs or due to fraud or misconduct by the institution or its staff. Furthermore, institutions can also not withhold the transcript of students for a period in which the student received Title IV financial aid and has either paid all the charges owed to the school or has made arrangements to pay those charges.
However, institutions would still be able to withhold the students’ transcripts in cases where no Title IV aid was received or where the student has Title IV aid but owes a balance and hasn’t made arrangements for paying the balance.  

Administrative capability

Financial aid counseling and communications

The Department of Education has also introduced new regulations on how a school must communicate information related to financial aid to students. This includes disclosing the total cost of attendance for each student by the institutions with proper information on the cost breakdown and all associated direct and indirect costs, indication which financial aid options are to be earned and which are to be repaid by the students, net price for students, and information regarding the deadlines for accepting, declining, or adjusting their financial aid offers. 

Evaluating the Authenticity of a high school diploma

Under the new regulations, in cases where an institution doubts the authenticity or credibility of a student’s high school diploma or its issuing institution, to evaluate its validity, an institution’s procedure will now require adequate documentation from the high school in question. The documentation can include transcripts, written descriptions of course requirements, and written statements from the high school affirming the rigor and quality of the coursework offered. Institutions must also verify that the high school in question is recognized by relevant state or tribal educational agencies and is not included on any lists published by the Department of Education (ED) identifying high schools that issue invalid diplomas.

Providing adequate career services and geographically accessible clinical or externship opportunities

In the list of regulations related to administrative capability, the requirement for an institution to provide comprehensive career services to their students is also added. Along with this, institutions must also ensure that students have geographical access to practical training experiences such as clinical placements or externships within 45 days of the completion of required coursework. They should also directly relate to the student’s program of study and be necessary for completing the educational requirements leading to a professional credential or licensure.

Disbursing funds in a timely manner that best meets the student’s needs

According to this new regulation, an institution is only considered administratively capable if it disburses funds to the students in a timely manner. The Department of Education may consider a college out of compliance with this provision for several reasons, such as if ED receives complaints from multiple students regarding delays in receiving their financial aid disbursements, an increase in student withdrawals is observed due to delayed disbursements, a delay in disbursements by the institution until students have earned 100% of their aid for Return to Title IV (R2T4) purposes, or  delaying the disbursement to ensure passage of the 90/10 ratio.

Saving on a Valuable Education Income-Driven Repayment Plan (SAVE)

Regulations that are already implemented

Auto-Renewal: If a borrower consents to disclose his tax information, his monthly payments are automatically adjusted, and his enrollment is recertified every year in an IDR (including SAVE).

Automatic Re-enrollment: Borrowers will be automatically transferred to the new SAVE plan, if they are presently enrolled or have recently applied to the REPAYE plan.

Negative Amortization: Negative amortization was revoked.

Income Protection: Income below 225% of the poverty line is protected.

Exclusion of Spousal Income for Married Borrowers Filing Separately: Married borrowers who file taxes separately can exclude their spouse’s income from their IDR plan payments calculations.

Shortened Cancellation Periods: Under the SAVE plan, debt for undergraduate students will be canceled after 20 years of qualifying payments, while the debt for graduate students will be canceled after 25 years.

Simplified Documentation Requirements: Borrowers who have returned to the SAVE plan after being on another repayment plan do not need to provide income documentation for the duration when they were not enrolled in REPAYE or SAVE.

Early Cancellation for Low Balance Borrowers: Under the SAVE plan, borrowers who have low balance may qualify for early loan cancellation.

Implemented from July 1, 2024

Monthly Payments: Monthly payments are equal to 5% of discretionary income for undergraduate debt, and 10% of discretionary income for graduate debt.

Automatic IDR Enrollment: The borrowers will automatically get enrolled on IDR if they are more than 75 days late with their monthly payments.

Credit for Consolidated Loans: For consolidated loans, borrowers can get credit equivalent to the weighted average of pre-consolidation qualifying payments made.

Limitation on New Enrollment in Some IDR Plans: The enrollments are restricted in some IDR plans.

Automatic Credit Toward Forgiveness During Deferment/Forbearance: Borrowers may obtain automatic credit toward loan forgiveness for certain periods of deferment or forbearance

Conclusion

The new higher education regulations, effective July 1, 2024, bring about a revolutionary change in the operation modalities of universities. These regulations’ sole aim is to improve education quality and ensure that institutions emphasize the well-being and progress of their students. Therefore, it is critical for institutions to prepare their campuses for these regulations by proactively reviewing their policies and filling the gap to make the environment student centric. Incorporating these changes will not only ensure regulatory adherence but will also help institutions to thrive in an evolving education landscape.

And if you want to stay ahead of the curve, you must try Virtue Analytics‘ net price calculator. Our net price calculator can help you enhance the student experience, increase transparency, and drive more informed enrollments. Contact us today.