Washington Watch: ED releases further final rules on program and institutional eligibility

U.S. Education Department (Photo: AACC)

The U.S. Education Department (ED) on Tuesday released a new set of final regulations that make a number of important changes to procedures and standards that institutions must meet in order to qualify for federal student aid. 

These rules, along with gainful employment (GE) and financial value transparency, were subject early last year to “negotiated rulemaking,” a process in which the American Association of Community Colleges (AACC) participated. (Anne Kress, president of Northern Virginia Community College, served as primary negotiator.) The GE and related rules were finalized on October 10. 

This second batch of rules is arguably as far-reaching as GE and its accompanying disclosure framework, and hugely consequential for colleges and students. As with the GE regulations, they generally take effect next July 1.

House Education and the Workforce Committee Chair Virginia Foxx (R-North Carolina) denounced the regulation, saying in a statement that “Adopting a ‘go it alone’ strategy to advance the Education Department’s own agenda is not a viable avenue to reform postsecondary education in America — the Department better wake up and realize this. This decision to subvert the constitutional authority vested in Congress is nothing new — it adds to a long line of flawed, and in some cases illegal decision-making that is all to familiar in the Biden administration.”

Into the details

The new final rules cover four broad areas: certification, administrative capability, financial responsibility and ability-to-benefit (ATB). The ATB rules were the only ones that garnered consensus. AACC submitted detailed comments on the rules. 

Some of the key provisions of the regulations that AACC has been tracking include:

Administrative Capability:

  • Colleges will now be required to provide “adequate career services,” as a part of demonstrating that they have the “administrative capability” to deliver federal aid to students. AACC opposed this new requirement in the negotiating sessions as well as in its formal comments, on the grounds that career counseling has no specific or even implied relationship to the administrative capability requirement in the Higher Education Act.
  • Institutions will have to meet new requirements relating to financial aid counseling and financial aid communications to students, including information on the cost of attendance and the sources and the “most beneficial” types of financial aid available to them.


  • For certificate programs that lead to licensure (at community colleges, basically GE programs), the program length can be no longer than 100% of the length mandated by the state in which the institution is located, or another state if a majority of students in the program live or work there. The final rule specifies that this requirement does not apply to degree programs or to any program that is entirely online.
  • Colleges will be required to ensure that their programs that prepare students for licensed occupations satisfy the applicable educational requirements for professional licensure or certification in every state in which enrolled students are located or plan to work after they complete the program.
  • In a big policy win for AACC and other stakeholders of the State Authorization Reciprocity Agreements (NC-SARA) process, the department has limited the proposed application of individual state laws to policies related to institutional closure that related to teach-outs, record retention, tuition recovery funds and surety bonds. The final rule removes provisions in the NPRM that would also have applied state laws specifically related to misrepresentation and recruitment. The final regulation should allow the NC-SARA framework to continue to operate largely as at present. 
  • Although modified in a positive direction from the proposed rule, ED is creating a new category of “supplementary performance measures” that it can use to deny a college Title IV eligibility.  The department may consider, “among other” information, an institution’s withdrawal rate (possibly an area of vulnerability for AACC members), the amount of funds spent on instruction compared to recruiting (surely not an issue for community colleges) and licensure pass rates.


  • The final ATB regulations establish new processes for states to secure ED approval to provide Title IV aid to students who do not have a high school diploma and who are enrolled in career pathway programs. The regulations also define eligible career pathway programs (ECPP) and set documentation standards. They also include a new completion standard that ATB students must meet overall — 85% of the completion rate of that attained by high school graduates. As stated, the ATB rule was agreed to by negotiators and modified only slightly from the proposed rule.

AACC will provide a more detailed analysis of the regulations shortly. 

About the Author

David Baime
David Baime is senior vice president for government relations at the American Association of Community Colleges.
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