The latest Neg Reg (negotiated rulemaking) process examined the fundamental rules that guide higher education institutions’ interactions with the Department of Education with regards to student aid and related programs.  The Department has used access to student aid to bring a lot of aspects of higher education under federal supervision.

The process, which ended in April 2019, focused on accreditation and innovation, and will have wide-ranging implications on multiple areas that potentially affect student outcomes.

This Neg Reg represents a critical shift, one that bears watching, because of the competing tensions among federal oversight, institutions and accreditors, and the higher ed marketplace which is shifting toward a more dynamic, more open, learner-centered postsecondary system. This also will result in increased partnerships, including public-private partnerships.

Looking at Accreditation

When Higher Education Act was passed in the 1960s, Congress set up a three-legged stool to manage the process: (1) Congress would provide the money; (s) states would approve the institution; and (3) the institution would need to be accredited by an accrediting agency recognized by the Secretary of Education. While this initially sound s straight-forward, what emerged was a very extensive list of rules, especially when applied to the accreditors’ role in ensuring institutional quality so that they could participate in the federal loan programs.

Over the years, the accreditors have become in many ways subordinate to the Department in terms of how they go about doing their business.

The recent Neg Reg process focused on accreditation and innovation. Secretary of Education Betsy DeVos and other Department officials argued that the rules should be changed to encourage innovation and competition among accreditation agencies, and this process led to major changes that could have profound implications for higher education institutions.

Surprisingly, the Neg Reg ended in consensus (agreement) among the various stakeholders / negotiating parties, e.g., colleges, accreditors, consumer groups, states.  This is a critical conclusion, because when consensus is reached, the law requires that the rule that will be followed is based on the consensus – the Secretary does not have the discretion to change what was agreed upon.

This finding of consensus means that higher education is at an interesting inflection point in the relationship between the federal and accrediting agencies. Now, with having consensus, the accrediting agencies are setting policies, vs having them handed down by the Department.  Previous examples where consensus was not reached include Title IX and Borrower Defense to Repayment, instances where negotiations proved to be contentious.

Encouraging Innovation

Many of the provisions that reached consensus (approval) are groundbreaking in many respects, including the strong emphasis on new programmatic approaches, which sends a strong message to accreditors. Instead of being penalized for thinking about the box, the new rules encourage finding faster, cheaper and better delivery of education.

In the early stages of discussions leading up to the Neg Reg session, Department of Education leaders floated some very aggressive ideas but made it clear that these ideas were opening positions to enable negotiators to think outside the box so as to find ways to make the accreditation process innovative. For example, department officials set a target and encouraged negotiations to reach that target. This was different than in previous Neg Reg efforts.

For instance, the Department proposed that an accredited institution that participates in federal student aid could contract out a program to an entity that is not accredited, with the approval of its accrediting agency. The process led to a decision to let the accrediting agency do a staff review of these types of proposals. This has two major effects – it simplifies the process and reduces the time from proposal to approval from months to a few weeks.

That is a dramatic change; to date, innovation has been inhibited by the significant review time it takes for accreditation to consider this type of request and make a decision, as well as the expense of going through the review process.

 Additionally, this will open up more opportunities for relationships between academic institutions and non-accredited providers who provide a wide variety of academic services. This decision also makes it clear that rather than being exception, the relationship between higher ed institutions and OPMs / alternative providers should be considered “favored.” In many cases, these are more efficient, less expensive and substantially better ways of providing educational services than what are currently available in the institution.

This type of innovation isn’t necessarily bad for higher education. When MOOCs first appeared and changed the marketplace, the assumption was that these would radically change higher education. That death was greatly exaggerated, but it has created a substantial industry of companies that are using private capital to create quality educational experiences. This regulatory change will make it easier for institutions to pick and choose and make these products part of their educational program.

One note with this – the Department had proposed eliminating the 50% outsourcing limit, but the negotiators retained this limit for outsourcing courses if.

Innovations in Courses

These changes could make a difference in the scope and quality of courses. While a faculty-developed course relies on the developer’s expertise, it may not be as broad as it could be. Outside resources could help make course content more current than the faculty’s knowledge. Furthermore, it also lets faculty, department heads, program directors and deans be more creative about seeing what is available in the broader universe of educational services. The existing rule said that if a course was not created at the institution, it couldn’t be used; however, the new rules are encouraging faculty to realize that there is an enormous amount of services in the marketplace. This new reg gives institutional leaders and faculty the chance to identify and use the best services possible.

For example, StraighterLine, an educational program provider, focuses on lower-division undergraduate courses that make up core curriculum. These lower-division courses are a very expensive enterprise for a school to provide and more often than not, these courses have little innovation. StraighterLine provides innovative approaches to these courses, enabling adult learners to fulfill their general education requirements without going to the institution, allowing the institution to focus on their own programs that are innovative. This is a very critical development.

This new regulation also gives an institution the opportunity to pick and choose specific and complex programs that are outside of the institution’s core capability but still important to what they are doing. For example, Trilogy Education Services is collaborating with Harvard and other institutions to provide coding programs that many schools don’t necessarily want to provide or don’t have the capacity to provide on their own. If

Competency-based Education vs. Credit-Hour Education

The Neg Reg process made it very clear that the Department wants to move away from the credit hour as the benchmark for post secondary education. The credit hour was created in the 1920s for determining the hours of work by elementary and secondary teachers back when the first union agreements were being negotiated, and rightly or wrongly, was brought into use in higher education in 1965 through the Higher Education Act. The Neg Reg process is one among many that are encouraging discussions about alternate ways of measuring student outcomes. This would change the process from measuring “time in seat” to “what the student actually learned.” This is the idea behind competency-based education – what is the outcome of the education / what is the student learn. Many institutions are moving rapidly in this direction, including Western Governors and Southern New Hampshire.

This change also will require more emphasis on assessment to measure what competency the student has gained vs. what they know. This is the difference between memory and mastery. The credit hour measures memory whereas competency learning and direct assessment measure mastery, i.e., skill vs. what a student can do with that knowledge.

In terms of Bloom’s, credit hour measures the lower levels whereas competency and direct assessment measure the higher levels.

Defining Faculty Interaction

Substantive interaction with faculty was another important piece that came out of the Neg Reg. This was based on Western Governors University’s academic teams, which didn’t include traditional faculty. The Department’s Inspector General had ruled that faculty members need to be part of this interaction with students. However, Western Governors argued that the federal government was determining who made up faculty; instead, this decision should be left up to the university in collaboration with accreditors. In fact, the accreditor felt that the team approach to learning did include faculty because subject-matter experts were involved and helped guide students through the course process.

There was significant support for Western Governor’s approach, which will result in a very radical change by opening up innovative learning environments by stating that online education doesn’t need to replicate a traditional classroom. Instead, online learning should be allowed to create a learning environment and that people who are involved in the faculty-side of the ledger add to the learning process (vs. them actually being a faculty member). By leaving the defining of faculty up to the institution and their accreditors, this will be beneficial for student / learners.

Changes for States

Some people involved in the Neg Reg process expressed concern that the current administration has loosened regulations which will result in institutions that are bad actors will continue to get a free ride or less rules being imposed on them. However, some states are stepping in to fill what they see is the regulatory void as the federal government continues to deregulate and not enforce current regulations. What we are seeing is that the states are stepping in to fill the regulatory void, and that is totally appropriate – the only role that the federal government should have is the handing out of federal financial aid. In California, there is a reactive set of laws that have been proposed that will be restrictive on institutional innovation. This may result in a tug-of-war between states and the federal government.

While state attorneys general were left out of the Neg Reg process, the state education higher ed officials were in attendance. This allowed states’ voices to be heard.

The Department has been compelled by the courts to put into effect the state authorization rule created by the Obama administration and suspended by the Trump administration. States have moved from focusing on authorizing institutions individually for distance learning because of state-authorization reciprocity agreements (NC-SARA) but now are focused on professional licensure. A new regulation that is similar but different would go into effect July 1, 2020.

Three Tips for Higher Education Leaders

Three pieces of advice for higher education leaders:

  • Follow what is happening in Neg Reg and implementation closely. These rule changes go to the heart of the core academic functions. Presidents, provosts, deans and programs chairs need to be aware of these changes.
  • Be aware of how accreditation agencies are responding to these changes.
  • Higher education is currently in a dynamic state. Leaders need to aware of how to accommodate new learners, new learning opportunities, new markets and new demands created by those markets, particularly from employers. The rules are changing in favor of those opportunities and institutions need to learn how to take advantage of them.

Bullet Points

  • Neg Reg is a critical shift to the higher ed landscape. First of all, it was adopted through consensus. In addition, it focuses on innovation, defining student learning and recasting the definition of faculty.
  • The new rules encourage finding faster, cheaper and better delivery of education. For instance, accreditors can now do a staff review when considering an institution’s request to use an outside entity to provide academic coursework support.
  • The new rules will encourage institutions to create agreements with preferred external partners for areas such as undergraduate core courses so they can concentrate their time and financial resources on innovative areas in a college or department.
  • These discussions continue to encourage institutions and accreditors to measure competencies instead of class hours. This will require more focus on meaningful assessments.
  • The Neg Reg also begins to redefine a faculty member. This is necessary based on online education, which in some cases uses a team to guide students. These team members are subject experts, even if they are not the faculty-of-record for the class.
  • Some states are concerned about the implications of Neg Reg. They also are looking at different areas such as professional licensure in relation to holding institutions accountable.

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