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

WReier-Aviles on DSKGBLS3C1PROD with RULES266870 Federal Register / Vol. 75, No. 209 / Friday, October 29, 2010 / Rules and Regulationsinstitutions agree to accept credits whenstudents transfer from one institution toanother, or to cases where individualstudents transfer to a differentinstitution to complete their educationalprograms. Students who enroll in aninstitution and have college creditsaccepted on transfer that were earnedwhile in high school also do not comewithin the scope of this regulation.Changes: None.Comment: A number of commentersdisagreed with proposed § 668.5(a)(2),which has the effect of limiting therelative portions of an educationalprogram provided by more than oneinstitution under the same ownership orcontrol. Some commenters argued thatthe limit is arbitrary and inappropriatebecause—for all intents and purposes—institutions under common ownershipare the same. A few commenterssuggested that the regulations shouldfocus more narrowly on the institutionswith problems as opposed to allinstitutions under common ownership.Some commenters were unclear aboutwhat constitutes ‘‘common ownership’’and what types of written arrangementsare subject to the 50 percent limitationin § 668.5(a)(2)(ii).Some commenters indicated that theproposed regulations should apply to allinstitutions and not apply only to forprofitinstitutions. Several commentersexpressed concern about theapplicability of this provision to themany written arrangements betweenpublic institutions within a State andwhether a State is considered to ‘‘own’’all of its institutions. Other commentersasked the Department to clarify thatpublic and private nonprofit institutionsare not covered by the proposedlanguage in § 668.5(a)(2).In addition, commenters raisedconcerns about the potential impactthese regulations could have onstudents who move to another area andwant to transfer to another location ofthe same institution. One commenterstated that the proposed change woulddiscourage students who finish aprogram from transferring to anotherinstitution under the same control for ahigher level program.Some commenters objected to theDepartment’s assertions in the preambleof the NPRM that written arrangementsare used by institutions under commonownership to circumvent otherregulations and argued that theDepartment provided only anecdotalevidence to support the proposedchanges in § 668.5. Commenters statedthat institutions that are circumventingthe current regulations will find otheropportunities to do so and should facesanctions under the misrepresentationprovisions.Discussion: As indicated in thepreamble to the NPRM, the Departmentfocused its regulatory changes on thetypes of institutions and situationswhere problems have been identifiedrather than expanding a requirement foraccrediting agencies to review writtenarrangements between institutionsunder common ownership. We modeledthese regulations on the language in§ 668.5(c)(3)(ii)(B), regarding writtenarrangements between an eligibleinstitution and an ineligible institutionor organization because that section ofthe regulations refers to institutions thatare owned or controlled by the sameindividual, partnership, or corporation.We do not agree with the commenterwho stated that the regulations arearbitrary and inappropriate becauseinstitutions under common ownershipare the same entity. This is becauseinstitutions are approved to participatein the Federal student aid programs asseparate entities, and they mustindividually demonstrate eligibility asan institution, eligibility for theprograms they offer, programcompliance, cohort default rates,financial responsibility, andadministrative capability. Somelimitations on institutions that are basedon program measures can becircumvented if programs that appear tobe offered by one institution are actuallyoffered by another institution. Theprohibition in this regulation willensure that the institution providingmost of the program will be the oneassociated with the students that aretaking the program.Section 668.5(a)(2) does not apply topublic or private nonprofit institutionsbecause these institutions are not ownedor controlled by other entities andgenerally act autonomously. Somenonprofit institutions may havebusiness relationships throughmanagement agreements or serviceagreements where similar concernscould arise, but those instances areexpected to be infrequent and will beaddressed on a case-by-case basis.These provisions do not impact theability of individual students to transferto another location of the sameinstitution or to another institutionunder the same ownership or controleither to complete an educationalprogram or to enroll in a higher-levelprogram. When a student transfers to anew institution and enrolls for thepurpose of completing a degree orcertificate, the new institution becomesthe degree-granting institution.We agree that institutions thatcircumvent or otherwise violateVerDate Mar2010 14:10 Oct 28, 2010 Jkt 223001 PO 00000 Frm 00040 Fmt 4701 Sfmt 4700 E:\FR\FM\29OCR2.SGM 29OCR2regulations should face appropriatesanctions.Changes: None.Comment: A number of commenterssupported the proposed changes to§ 668.5 regarding the limitations on theportion of the educational program thatmay be offered by another institutionunder a written arrangement, but soughtclarification on how to measure portionsof educational programs for thesepurposes. These commenters suggestedthat, for the purposes of determining thepercentage of the educational programprovided by each institution, we shouldtrack the provision of educationalservices on a programmatic basis ratherthan by the amount of coursework anindividual student may elect to take.Discussion: For purposes ofdetermining the portions of theeducational program provided by eachinstitution under any writtenarrangement under § 668.5, the degreegrantinginstitution is responsible forlimiting the amount of the program thatmay be taken from any other institution.Because an institution cannot offermore than 50 percent of an educationalprogram through another institution thatis under common ownership or control,if an institution offered an educationalprogram on campus and online (througha written arrangement with anotherinstitution under common ownership)and offered students the option of takingcourses by either method, the institutionmust ensure that each studentcompletes more than 50 percent of theeducational program on campus. If thesame institution enrolled students wholive beyond a reasonable commutingdistance to the campus and, therefore,take the online portion of the programfirst, the institution must be able todemonstrate that the students intend toattend on campus to complete at least50 percent of their educational program.Changes: None.Comment: Some commenters agreedthat the institution that grants thedegree or certificate should providemore than 50 percent of the educationalprogram, but suggested that monitoringfor compliance with this regulatoryprovision should be done by accreditingagencies rather than the Department.These commenters noted that to theextent that written arrangements arepart of a deliberative process related tothe development of curriculum andacademic requirements, they are part ofa decision-making process bestperformed by an institution’s facultyand leadership and best evaluated byaccrediting agencies. Some commentersstated that the Department should relyon accrediting agencies to setappropriate limits on the portion of an