New Federal Aid Rules Drop Proposed Change to “Distance Education” & Expand Pell Grants to Incarcerated Students

‘Tis the season for all things pumpkin, brisk mornings, and the release of new U.S. Department of Education final regulations! WCET and the State Authorization Network (SAN) have been closely following and reporting about the 2021-2022 Federal Negotiated Rulemaking process. In our most recent update last summer, we shared about two sets of proposed regulations and the release for public comment of the Notice of Proposed Rulemaking (NPRM) for both.

Those two packages were released as final regulations in the last several days. The first package of regulations addresses:

• The Pell Grants for Prison Education Programs – expands Pell Grant eligibility for incarcerated students,
• Determining the Amount of Federal Education Assistance Funds Received by Institutions of Higher Education (90/10) – lowers the percentage of funds for-profit institutions can acquire from federal aid sources,
• Change in Ownership and Change in Control – updates and clarifies requirement for mergers, acquisitions, and closures of institutions (NOTE: the proposed change to the “Distance Education” definition was dropped).

The second package of regulations addresses:

• Borrower Defense to Repayment – regulations were developed to streamline and improve the rules for student loan relief program if a student, as a borrower, has been defrauded by their institution.

The release of these regulations prior to the November 1 rulemaking calendar deadline for Title IV financial aid regulations allows for the regulations to become effective on July 1, 2023 (for the Change of Ownership, Pell Grants for Prison Education Programs and Borrower Defense to Repayment Rules). The Federal Register Announcement indicates that the 90/10 regulations will apply to institutional fiscal years beginning on or after January 1, 2023, consistent with the effective date specified in earlier legislation regarding the 90/10 calculation.

Today, we will summarize each package of new final regulations and share key takeaways. We acknowledge that this set of regulations has less direct impact on the work of our members than some previous packages of regulations for which we have reported. We will also provide a short update on the status of the remaining issues from the 2022 rulemaking that have yet to be released as proposed regulations [...]