Office of Postsecondary Education - U.S. Department of Education

Federal Register / Vol. 75, No. 209 / Friday, October 29, 2010 / Rules and Regulations66859WReier-Aviles on DSKGBLS3C1PROD with RULES2another commenter regarding problemareas with certain types of institutions.Changes: None.Comment: Several commentersquestioned the need for proposed§ 600.9. For example, severalcommenters questioned whether theDepartment’s concern that the failure ofCalifornia to reinstate a State regulatoryagency was justified. Commentersbelieved that the regulations would nothave prevented the concerns theDepartment identified in the case of thelapsing of the California State agency.One commenter believed the Californiaissue was resolved and thataccreditation and student financial aidprocesses worked. Some commentersbelieved that the current Stateregulatory bodies or other authorizationmethods were sufficient. Onecommenter stated that authorizationsare spelled out in State statutes, andthere is no need for the regulations.Some commenters believed thatadditional information is needed, suchas a State-by-State review of the impactof proposed § 600.9, or the States withadequate or inadequate oversight.Several commenters were concernedthat proposed § 600.9 wouldunnecessarily impact small Stateswithout discernable problems. Somecommenters believed there is noevidence of marginal institutionsmoving to States with lower standardsand that there is no danger to title IV,HEA program funds. One commenterbelieved that proposed § 600.9 shouldbe eliminated because the commenterbelieved that its full effect is not knownand that it will be chaotic ifimplemented. Another commenterbelieved that proposed § 600.9 would beburdensome, is not economicallyfeasible, and would leave an institutionat the mercy of the State. Onecommenter believed that proposed§ 600.9 would encourage for-profitinstitutions to undermine State agenciessuch as through lobbying to underfundan agency and would stallreconsideration of legislation.Some commenters believed that theDepartment’s concerns were valid. Oneof these commenters believed that, inthe absence of regulations, many Stateshave forfeited their publicresponsibilities to accrediting agencies.In the case of the interim lapse of theState regulatory agency in California,the commenter believed that we do notknow yet the extent of the mischief thatmay have occurred or may still occur,but the commenter has received reportsthat schools began operating in the gapperiod and are being allowed tocontinue to operate without Stateapproval until the new agency isoperational. The commenter understoodthat at least one of those schools closedabruptly, leaving many students withdebts owed and no credential to showfor their efforts.Some commenters believed that theproposed regulations would not addressissues with degree mills as they are notaccredited. Some commenters urged theDepartment to offer leadership andsupport of Federal legislation andfunding to combat diploma mills.One commenter recommended thatthe Department use Federal funds foroversight. Another commentersuggested that the Departmentencourage the Federal Government toprovide incentives to the States.Discussion: We do not agree with thecommenters who believe that proposed§ 600.9 should be eliminated. Forexample, we believe these regulationsmay have prevented the situation inCalifornia from occurring or would havegreatly reduced the period of timeduring which the State failed to provideadequate oversight. While it may appearthat the California situation wassatisfactorily resolved as somecommenters suggested, the absence of aregulation created uncertainty. As onecommenter noted, during the periodwhen the State failed to act, it appearsthat problems did occur, and that noprocess existed for new institutions toobtain State authorization after thedissolution of the State agency. We areconcerned that States have notconsistently provided adequateoversight, and thus we believe Federalfunds and students are at risk as wehave anecdotally observed institutionsshopping for States with little or nooversight. As a corollary effect ofestablishing some minimal requirementsfor State authorization for purposes ofFederal programs, we believe the publicwill benefit by reducing the possibilitiesfor degree mills to operate, without theneed for additional Federal interventionor funding. We do not believe thatadditional information is needed tosupport § 600.9 in these finalregulations as § 600.9 only requires aninstitution demonstrate that it meets aminimal level of authorization by theState to offer postsecondary education.Because the provisions of § 600.9 areminimal, we believe that many Stateswill already satisfy these requirements,and we anticipate institutions in allStates will be able to meet therequirements under the regulations overtime. This requirement will also bringgreater clarity to State authorizationprocesses as part of the Triad. Since thefinal regulations only establish minimalstandards for institutions to qualify aslegally authorized by a State, we believeVerDate Mar2010 14:10 Oct 28, 2010 Jkt 223001 PO 00000 Frm 00029 Fmt 4701 Sfmt 4700 E:\FR\FM\29OCR2.SGM 29OCR2that, in most instances they do notimpose significant burden or costs.States are also given numerous optionsto meet these minimum requirements ifthey do not already do so, and thisflexibility may lead to some States usingdifferent authorizations for differenttypes of institutions in order tominimize burden and provide betteroversight. The question of whether theseregulations will impact the ability ofany group to seek changes to a State’srequirements is beyond the purview ofthese final regulations. As onecommenter requested, we will continueto support oversight functions asprovided under Federal law, and webelieve that these final regulations willprovide the necessary incentives to theStates to assure a minimal level of Stateoversight.Changes: None.Comment: Some commentersquestioned how the Department wouldenforce the proposed regulations. Onecommenter stated that the Departmenthas no mechanism to enforce theproposed regulations and asks how theywill improve program integrity. Onecommenter questioned why aninstitution may be held accountable forthe actions of the State over which it hasno direct control.Discussion: Any institution applyingto participate in a Federal programunder the HEA must demonstrate that ithas the legal authority to offerpostsecondary education in accordancewith § 600.9 of these final regulations. Ifa State declines to provide an institutionwith legal authorization to offerpostsecondary education in accordancewith these regulations, the institutionwill not be eligible to participate inFederal programs.As to an institution’s inability tocontrol the actions of a State, we do notbelieve such a circumstance is anydifferent than an institution failing tocomply with an accreditationrequirement that results in theinstitution’s loss of accredited status.We believe that in any circumstance inwhich an institution is unable to qualifyas legally authorized under § 600.9 ofthese final regulations, the institutionand State will take the necessary actionsto meet the requirements of § 600.9 ofthese final regulations.Changes: None.Comment: One commenter believedthat proposed § 600.9 would result in anunfunded mandate by the FederalGovernment. Another commenter statedthat many States may see proposed§ 600.9 as a revenue-generatingopportunity and pass the costs of thisrequirement on to institutions, which