Distance Education and Title IV of the Higher Education Act: Policy, Practice, and Reauthorization

Distance Education and Title IV of the Higher Education Act: Policy, Practice, and Reauthorization

Order Code RL32490
CRS Report for Congress
Received through the CRS Web
Distance Education and Title IV of the
Higher Education Act: Policy,
Practice, and Reauthorization
Updated January 21, 2005
Jeffrey J. Kuenzi,
Rebecca R. Skinner,
and David P. Smole
Analysts in Social Legislation
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress

Distance Education and Title IV of the Higher
Education Act: Policy, Practice, and Reauthorization
Summary
The phrase “distance education” (DE) has been used to describe a wide variety
of structured learning environments that occur away from the “traditional” bricks and
mortar classroom setting. The U.S. Department of Education (ED) identifies five
different DE delivery modes: correspondence study, interactive videoconferencing,
telecourses, asynchronous online instruction, and synchronous online instruction.
Based on an ED survey, 56% of institutions of higher education (IHEs) offered DE
courses in 2000-2001, in which over 3 million students were enrolled.
To participate in federal student aid (FSA) programs authorized under Title IV
of the Higher Education Act (HEA), institutions must meet eligibility requirements
known collectively as the 50% rules. According to the rules, if telecommunications
courses and correspondence courses constitute at least half of the total courses
offered at an IHE, then telecommunications courses are considered to be
correspondence courses; and if more than 50% of an IHE’s courses are
correspondence courses, or if 50% or more of an IHE’s students are enrolled in
correspondence courses, the IHE loses its Title IV eligibility. Students’ eligibility for
FSA also depends on their own DE coursetaking.
The Distance Education Demonstration Project (DEDP) waives certain
eligibility requirements for about two dozen IHEs in order to “test the quality and
viability” of DE programs (P.L. 105-244). An ED report on the DEDP concluded
that these restrictions should be loosened and that this would have few negative
consequences. A GAO study of the impact of the 50% rules concluded that doing so
without management accountability would probably increase occurrences of fraud
and abuse. GAO recommended that ED study the cost of waiving the 50% rules.
To be eligible for Title IV programs, IHEs must be accredited by an agency or
association recognized by ED as a reliable authority for assessing the quality of
education. There are several special challenges associated with evaluating and
accrediting DE programs and courses. DE courses and programs are offered through
different modes of instruction, requiring accreditors to evaluate the curriculum and
instruction, faculty support, student support, and student learning outcomes of these
programs in different ways. DE programs and courses are offered by a variety of
providers, ranging from traditional four-year institutions to online degree-granting
institutions to corporate universities. DE is also used for short-term continuing
education and training in professional fields, often separate from degree programs.
Due to the substantial changes in the availability of technology and demand for
DE courses since the 1998 reauthorization of the HEA, there are numerous issues that
may be discussed during the upcoming reauthorization. These include whether to
reauthorize the DEDP; whether to change the 50% rules used in determining the
eligibility of IHEs to participate in programs authorized under Title IV of the HEA;
and whether to change the requirements for federal recognition of accrediting
organizations that are applicable to DE. This report will be updated.

Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
What Is Distance Education? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
How Prevalent is Distance Education? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
DE Course Offerings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
DE Course Enrollment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Title IV of the Higher Education Act as It Affects Distance Education . . . . . . . . 6
Institutional Eligibility and the 50% Rules . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Student Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Telecommunications and Correspondence Course Programs . . . . . . . 10
Student Enrollment Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Cost of Attendance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
The Distance Education Demonstration Program . . . . . . . . . . . . . . . . . . . . 14
Effect of Waiving the 50% Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Accreditation and Distance Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Federal Recognition of Accrediting Organizations . . . . . . . . . . . . . . . 16
Standards Used to Evaluate DE Programs and Courses . . . . . . . . . . . 17
Issues for Reauthorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Distance Education Demonstration Program . . . . . . . . . . . . . . . . . . . . . . . . 19
50% Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
DE at Proprietary and Postsecondary Vocational Institutions . . . . . . . . . . . 20
Accreditation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
List of Figures
Figure 1. Institutional Eligibility: Application of the 50% Rules . . . . . . . . . . . . . 9
Figure 2. Student Eligibility: Effects of Enrollment in Telecommunications
and Correspondence Courses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Figure 3. Student Eligibility for FSA under HEA Programs:Effects of
Enrollment Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
List of Tables
Table 1. IHEs Offering Distance Education Courses: 2000-2001 . . . . . . . . . . . . 5
Table 2. Enrollment in DE Courses, 2000-2001 . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Distance Education and Title IV of the
Higher Education Act: Policy, Practice,
and Reauthorization
Introduction
Issues related to distance education (DE) are among those that surfaced in the
108th Congress. It is likely that these issues will reemerge in the 109th Congress as
legislation is introduced to reauthorize the Higher Education Act (HEA) of 1965.1
The issues include whether to reauthorize the Distance Education Demonstration
Project (DEDP); whether to amend or eliminate the 50% rules applicable to
determining the eligibility of institutions of higher education (IHEs) to participate in
programs authorized under Title IV of the HEA; and whether to change the
requirements for federal recognition of accrediting organizations that are applicable
to DE. This report explores the growth of DE into a significant component of the
modern postsecondary education landscape and then examines a number of issues
involved in the debate surrounding HEA reauthorization.2
Many observers trace the origins of DE to correspondence study3 and in
particular to the founding of the University of Chicago and its correspondence
program and extension division in 1892.4 According to University archivists,
1 P.L. 89-329, as amended by P.L. 105-244 [20 U.S.C. §§ 1001 et seq.]. For more
information on issues related to the reauthorization of the HEA see CRS Issue Brief
IB10097, The Higher Education Act: Reauthorization Status and Issues, by James B.
Stedman.
2 In this report, our discussion of DE is limited to how it relates to the reauthorization of the
HEA. However, federal support for DE programs and initiatives is also provided through
other programs (e.g., programs authorized under ESEA — the Elementary and Secondary
Education Act of 1965, as amended (P.L. 107-110); Perkins III — the Carl D. Perkins
Vocational and Applied Technology Education Amendments of 1998 (P.L. 105-332); and
WIA — Workforce Investment Act of 1998 (P.L. 105-220)).
3 According to Von Pittman, “Early collegiate-level correspondence study was often called
‘home study’ to distinguish it from the product of proprietary schools. For much the same
reason, colleges and universities began to call it ‘independent study’ beginning in the late
1960s,” Moore & Anderson, Handbook of Distance Education, 2003.
4 Michael Moore, Contemporary Issues in American Distance Education (New York:
Pergamon, 1990); and Watkins & Wright, The Foundations of American Distance
(continued...)

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The campus of the University was never meant to contain its educational
mission. As conceived by William R. Harper, the University of Chicago
included an extension division that would bring instruction to students who could
not work toward their degrees on campus. The extension offered three methods
of instruction: students could learn by attending a series of scheduled lectures
(lecture-study), register for courses offered in an extension center (class-study),
or receive instruction through the mail at home (correspondence-study). At a
time when state universities were bound to their rural land-grant campuses and
the concept of adult education was still new, the University’s offering of
extension courses in the heart of the city provided opportunities for students for
whom conventional higher education was out of reach.5
The promise of bringing educational opportunity to individuals who lack access
to traditional classrooms has remained the central rationale for DE up to the present
day. In the last reauthorization of the HEA the Congress stated, “Distance education
holds the promise of expanding access to higher education at a time when the number
of postsecondary students will be expanding, including those seeking retraining and
those in rural communities without access to local colleges and universities” (H.Rept.
105-481).
While its purpose has been longstanding and straightforward, what actually
constitutes DE is often unclear and has changed over time. The remainder of this
section discusses the characteristics that define DE and the extent to which DE
occurs in the U.S. at the postsecondary education level. The following section
examines DE in the context of the HEA and Title IV in particular. This includes
discussing the rules governing institutional and student eligibility for receipt of
Federal Student Aid (FSA). The DEDP, the effect of eligibility rules on DE, and
accreditation of DE are also discussed. The report concludes with a review of DE
issues likely to arise during HEA reauthorization.
What Is Distance Education?
The phrase DE has been
Distance Education: The process of extending
used to describe a wide variety
learning, or delivering instructional resource-
o f s t r u c t u r e d l e a r n i n g
sharing opportunities, to locations away from a
environments that occur away
classroom, building or site, to another classroom,
from the “traditional” bricks
building or site by using video, audio, computer,
and mortar classroom setting.
multimedia communications, or some combination
The definition in the text box
of these with other traditional delivery methods.
— Instructional Technology Council
4 (...continued)
Education: A Century of Collegiate Correspondence Study (Dubuque, IA: Kendall/Hunt
1991).
5 Alice Schreyer, The University and the City: A Centennial View of the University of
Chicago (Chicago: University of Chicago Library, 1992), available at
[http://www.lib.uchicago.edu/e/spcl/centcat/home.html].

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typifies the current use of the term.6
However, with the growing use of telecommunications technology in education
generally, there is not always a clear distinction between DE and traditional
education. Computer and network technology now provide students and teachers
with means of communicating that are on par with what previously could have been
achieved only through face-to-face interaction. E-mail can replace a visit to the
department office. A chat room can replace a group study session in the student
union. Some types of lab work can be completed in a student’s dorm room rather
than at a computer lab. The point at which an educational process conducted via
telecommunications technology ceases to be “traditional” education and begins to be
“distance” education has become blurred.
The Alfred P. Sloan Foundation has developed a somewhat arbitrary standard
for categorizing DE based on the proportion of content that is delivered online. It
classifies an “online” course as having at least 80% of the course content delivered
online, a “blended” or “hybrid” course as 30% to 80% online content, a “web
facilitated” course as under 30% online content, and a “traditional” course as having
no online content.7
Yet, it also recognizes that the potential of online learning goes well beyond
simply learning outside the traditional classroom. Telecommunications technologies
not only allow learning to take place anywhere, but also at any time — most
importantly, when it is convenient for the student. When time elapses during the
exchange in a learning experience (e.g., students listening to a prerecorded lecture or
exchanging messages on an online discussion group), this process is referred to as
asynchronous learning.
In its report to Congress on the status of the DEDP (discussed later in this
report), ED includes asynchronous learning in its list of DE delivery modes:
Correspondence study — the institution mails lessons to students who work
independently and periodically submit assignments and examinations for grading
by an instructor;
Interactive videoconferencing — telecommunications networks link a faculty
member with students located in classrooms around the state or region;
Telecourses — instruction is delivered on videotape (or through cable
distribution) to students studying at home;
Asynchronous online instruction — students have access to electronic classrooms
that contain instructional materials with links to other online resources, and tools
to facilitate group discussion, small group activities, and one-to-one
communication; and
6 Instructional Technology Council website hosted by Dallas TeleLearning, available at
[http://telelearning.dcccd.edu/].
7 I. E. Allen and J. Seaman, Seizing the Opportunity: The Quality and Extent of Online
Education in the United States(Needham, MA: Sloan Consortium, 2002 and 2003).

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Synchronous online instruction — students at home log onto computers that are
linked through the Internet to faculty and students in a classroom.8
As telecommunications technology is increasingly brought into the educational
environment, it provides not only learners separated by space and time with new
ways to exchange ideas, but also provides faculty and students in courses offered
through traditional means with a way to supplement or enhance the educational
process. How much spatial and temporal distance must there be for a learning
experience to be termed distance education? Much of the remainder of this report is
devoted to clarifying the boundaries of DE set by Title IV of the HEA. However,
before doing so, we first describe the prevalence of DE in the U.S. postsecondary
educational system.
How Prevalent is Distance Education?
Given the elusive definition of DE, it is quite difficult to measure the extent to
which DE is being utilized. The most recent and reliable data on the utilization of
DE come from ED’s 2001 survey of two-year and four-year, Title IV-eligible, degree-
granting institutions based on the Postsecondary Education Quick Information
System (PEQIS).9
In the PEQIS survey, DE was defined as courses delivered to off-campus
locations through audio, video, or computer transmission either synchronously or
asynchronously. This definition excluded courses delivered on-campus, through
written correspondence, or at a remote site visited in person by the instructor.
Courses involving on-campus meetings for lab work or exams or occasional lectures
could still be considered DE in the PEQIS survey.
DE Course Offerings. Fifty-six percent of IHEs offered DE courses in
academic year 2000-2001 and an additional 12% reported planning to do so in the
next three years. DE is much more prevalent among public schools (90% of two-year
and 89% of four-year) than among private schools (16% of two-year and 40% of
four-year). Perhaps not surprisingly, small schools have been less likely than large
schools to offer DE courses (41% for IHEs with enrollments under 3,000 compared
to 95% for IHEs with enrollments of 3,000 or greater). Data on IHEs offering DE
courses are presented in Table 1.
8 U.S. Department of Education, Second Report to Congress on the Distance Education
Demonstration Program, 2003.
9 Available data on use of DE at institutions that do not report to PEQIS (i.e., non-Title IV-
eligible and/or non-degree-granting institutions) are not reliable enough to produce
nationally representative estimates. ED conducted the PEQIS survey in 1995 and 1998;
however, due to sampling differences, much of the data are not comparable to the 2001
survey. See U.S. Department of Education, National Center for Education Statistics,
Distance Education at Degree-Granting Postsecondary Institutions: 2000-2001, NCES
2003-017.

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Table 1. IHEs Offering Distance Education Courses: 2000-2001
Distance education program status
Did not offer DE in
Planned to offer
2000-2001 and
Offered DE in
DE in next three
does not plan to in
Total
2000-2001
years
next three years
Institution type
number of
and size
institutions
No.
Pct.
No.
Pct.
No.
Pct.
All institutions
4,130
2,320
56
510
12
1,290
31
Institution type
Public two-year
1,070
960
90
50
5
50
5
Private two-year
640
100
16
150
23
400
62
Public four-year
620
550
89
20
3
50
8
Private four-year
1,800
710
40
290
16
790
44
Institution size
Less than 3,000
2,840
1,160
41
460
16
1,220
43
3,000 to 9,999
870
770
88
50
5
60
7
10,000 or more
420
400
95
10
2
10
2
Source: U.S. Department of Education, National Center for Education Statistics, Distance Education
at Degree-Granting Postsecondary Institutions: 2000-2001, 2003.
Note: Percentages are based on the estimated 4,130 two-year and four-year Title IV-eligible, degree-
granting institutions in the nation. Detail may not sum to totals because of rounding.
DE Course Enrollment. According to PEQIS, 3.1 million students were
enrolled in DE courses in the 2000-2001 school year. Most of these courses were
taken for college credit (2.9 million), primarily undergraduate credit (2.4 million).
Public two-year institutions enrolled just under half (1.5 million) of the total and just
under half (1.4 million) of those enrolled for college credit. As stated above, data
from previous PEQIS surveys are not fully comparable for different years; however,
a report by the GAO claims that the PEQIS data “indicate that enrollments in
distance education quadrupled between 1995 and 2001.”10 Data on student
enrollment in DE courses are presented in Table 2.
10 U.S. General Accounting Office, Distance Education: Improved Data on Program Costs
and Guidelines on Quality Assessments Needed to Inform Federal Policy, GAO/04-279,
Feb. 2004, p. 7.

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Table 2. Enrollment in DE Courses, 2000-2001
Enrollment in college-level credit-
Institutions
granting DE courses
Total
Offering
enrollment
grad/1st
Institution type
DE
in all DE
courses at
undergrad
prof.
and size
Total
courses
courses
both levels
courses
courses
All institutions
4,130
2,320
3,077,000
2,876,000
2,350,000
510,000
Institution typea
Public two-year
1,070
960
1,472,000
1,436,000
1,435,000
‡b
Public four-year
620
550
945,000
888,000
566,000
308,000
Private four-year
1,800
710
589,000
480,000
278,000
202,000
Intuition Size
Less than 3,000
2,840
1,160
486,000
460,000
368,000
91,000
3,000 to 9,999
870
770
1,171,000
1,132,000
932,000
197,000
10,000 or more
420
400
1,420,000
1,284,000
1,049,000
222,000
Source: U.S. Department of Education, National Center for Education Statistics, Distance Education
at Degree-Granting Postsecondary Institutions: 2000-2001, 2003.
Note: Enrollments may include duplicated counts of students, since institutions were instructed to
count a student enrolled in multiple courses for each course in which he or she was enrolled. Detail
may not sum to totals because of rounding, missing data, or because too few cases were reported for
a reliable estimate for private two-year institutions.
a. Data for private two-year institutions are not reported in a separate category because too few
private two-year institutions in the sample offered distance education courses in 2000-2001 to
make reliable estimates. Data for private two-year institutions are included in the totals and in
analysis by other institutional characteristics. Thus, total enrollments do not always equal the
sum of categories of courses.
b. Two-year branches of public four-year institutions occasionally offer graduate/first-professional
level courses.
‡ Reporting standards not met.
Title IV of the Higher Education Act as It
Affects Distance Education
Title IV of the HEA authorizes federal programs that provide student financial
aid to support attendance at a variety of postsecondary institutions, including public
institutions, private not-for-profit institutions, for-profit (proprietary) institutions, and
trade and technical schools. In order for a student attending a postsecondary
institution to receive Title IV student aid, the institution must:
! be licensed or otherwise legally authorized to provide postsecondary
education in the state in which it is located;
! be accredited by an agency recognized for that purpose by the
Secretary of Education; and

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! be deemed eligible and certified to participate in federal student aid
programs by ED.11
In addition to these requirements, IHEs also must comply with specific statutory
requirements related to DE. Failure to comply with these requirements can result in
an institution losing its eligibility to participate in Title IV programs. At the same
time, certain provisions generally applicable to institutional eligibility may also affect
student eligibility for Title IV aid. This section discusses aspects of DE related to
institutional and student eligibility to participate in Title IV programs and also
examines how DE affects the accreditation of IHEs.
In contrast to the pedagogically-based definition of DE discussed above, under
Title IV of the HEA, the terms “correspondence courses” and “telecommunications
courses,” are used rather than “distance education,” (with the exception of the
DEDP). Federal regulations12 define a correspondence course as a home study course
offered by an IHE in which the IHE provides the student with instructional materials.
Upon completing a section of the instructional materials, the student takes a
corresponding examination provided by the IHE and returns it to the IHE for grading.
In contrast, a telecommunications course is a course that is offered via the application
of technology. This includes courses offered by Internet, audio or computer
transmission,13 or television. As some correspondence courses also include some
form of telecommunications technology, courses are classified as correspondence or
telecommunications based on the predominant mode of instruction.14 As will be
discussed in the next section, in certain circumstances telecommunications courses
may arbitrarily be considered to be correspondence courses for purposes of
determining institutional eligibility for participation in Title IV programs.
Institutional Eligibility and the 50% Rules
To participate in Title IV student aid programs, institutions must meet eligibility
requirements that specifically apply to DE.15 Several of these requirements are
known collectively as the 50% rules. The 50% rules were incorporated into the HEA
during the 1992 reauthorization, in part, as a response to cases of fraud and abuse that
11 For more information on institutional eligibility requirements to participate in Title IV
programs, see CRS Report RL31926, Institutional Eligibility for Participation in Title IV
Student Aid Programs Under the Higher Education Act: Background and Issues, by
Rebecca R. Skinner.
12 34 C.F.R.§ 600.2.
13 This could include, for example, closed circuit, cable, microwave, or satellite
transmission.
14 Courses delivered through video cassettes or discs are considered correspondence courses
unless the IHE delivers the same instruction to students attending classroom-based courses
during the same year. U.S. Department of Education, Office of Federal Student Aid, FSA
Handbook, 2004-2005: Volume 2 — School Eligibility and Operations, 2004-2005, Chapter
8, Distance Education. (Hereafter cited as ED, FSA Handbook, 2004-2005.)
15 Many of these requirements may be waived by the Secretary under the DEDP. The DEDP
and applicable waivers are discussed later in this report.

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had occurred at institutions that primarily delivered instruction through print-based
media. According to the report by the House Committee on Education and Labor for
H.R. 3553 (the 1992 House bill to reauthorize the HEA):
In amending this section of the Higher Education Act, the Committee intends to
improve the integrity of the Federal student assistance programs and to prevent
fraud and abuse in the programs ... H.R. 3553 reforms the criteria by which
institutions become eligible to participate in the Title IV programs. Institutions
which offer half or more of their courses as correspondence will no longer be
considered eligible institutions under this title. (H.Rept. 102-447)
Report language for the Senate bill (S. 1150) to reauthorize the HEA was even
stronger on this issue:
The integrity of title IV programs has been harmed immeasurably by persistent
reports of fraud and abusive actions by schools and other program participants,
especially in the Stafford loan program where profit incentives are great ... There
have also been numerous instances of abuse in the use of correspondence
courses, particularly in short-term programs. While the Committee understands
that there are many legitimate uses of correspondence courses, this bill seeks to
address the areas of abuse by eliminating the use of student aid for any
correspondence course that is not part of an associate’s or bachelor’s degree
program. Further, this bill removes from eligibility any school that offers more
than 50% of its courses by correspondence. (S.Rept. 102-204)
The compromise that came out of the conference committee was eventually
passed as P.L. 102-325 and contained the following rules:
1. At IHEs that are not institutes or schools described in §521(4)(C) of the
Carl D. Perkins Vocational and Applied Technology Education Act (P.L.
101-392)16 and at which at least 50% of the programs lead to an associate,
baccalaureate, or graduate degree, telecommunications courses shall not
be considered to be correspondence courses, unless the sum of
telecommunications and correspondence courses equals or exceeds 50%
(HEA, §484(l)(1)).17
16 Section 521(4)(C) of the Carl D. Perkins Vocational and Applied Technology Education
Act (P.L. 101-392) defines an area vocational education school as “a technical institute or
vocational school used exclusively or principally for the provision of vocational education
to individuals who have completed or left high school and who are available for study in
preparation for entering the labor market.” This section was deleted from the United States
Code under P.L. 105-332; however, references to this section remain in regulations at 34
C.F.R. Part 600 and in the Federal Student Aid Handbook (ED, FSA Handbook, 2004-2005).
17 For more information, see ED, FSA Handbook, 2004-2005, Institutional Eligibility,
Chapter 12.

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2. If more than 50% of an institution’s courses are correspondence
courses, it loses its Title IV eligibility (HEA, §102(a)(3)(A)).18
3. If 50% or more of an institution’s students are enrolled in
correspondence courses, it loses its Title IV eligibility (HEA,
§102(a)(3)(B)).19
It is important to note that the three 50% rules are applied in conjunction with
one another in determining institutional eligibility. Institutions not meeting the
requirements of either rule 2 or 3 are not eligible to participate in Title IV programs.
The first rule determines the application of rules 2 and 3. (Figure 1 provides a visual
overview of the application of the three 50% rules and their effect on institutional
eligibility).
Figure 1. Institutional Eligibility: Application of the 50% Rules*
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18 This limitation does not apply to institutions described under Section 521(4)(C) of the
Carl D. Perkins Vocational and Applied Technology Education Act (P.L. 101-392).
19 This limitation may be waived for a two-year or four-year institution offering associate’s
degrees or bachelor’s degrees, respectively, if the students participating in the
correspondence courses do not receive more than 5% of the total Title IV funds received by
all students enrolled in the institution.

CRS-10
According to the first rule, as stated above, telecommunications courses are
considered correspondence courses in instances where correspondence and/or
telecommunications courses constitute at least half of the courses offered by an IHE.
Telecommunications courses also are considered to be correspondence courses if less
than half of the programs at an IHE lead to an associate, baccalaureate, or graduate
degree. The result from this first rule can affect the application of the other two 50%
rules, which consider the proportion of correspondence courses offered at institutions
and the proportion of students enrolled in them.
According to the second rule, an institution loses eligibility to participate in
Title IV programs if the sum of its correspondence courses (including
telecommunications courses, if defined as such) exceeds 50% of the total number of
courses offered, regardless of the proportion of students enrolled in these classes.
Under the third 50% rule, an institution loses Title IV eligibility if 50% or more of
the institution’s students are enrolled in correspondence courses, regardless of the
number of the institution’s courses offered via correspondence. In addition, if
telecommunications courses are considered correspondence courses under the first
50% rule, certain DE students might lose eligibility to receive Title IV aid (as is
discussed below), even if the institution as an entity remains eligible to participate
in Title IV programs.
It should be noted that the 50% rules apply to institutions, not programs. Thus,
an individual educational program could be composed entirely of correspondence or
telecommunications courses and still be considered an eligible program for the
purposes of Title IV, assuming the institution does not run afoul of the 50% rules and
the program is otherwise eligible. Also, in order to maintain institutional eligibility
for FSA programs, institutions may decide to identify programs that do not lead to
a degree and that are offered solely through correspondence as non-FSA programs.
In such cases, the programs and the students enrolled in them do not factor into the
determination of institutional eligibility.20
Student Eligibility
Eligibility for DE students to receive FSA depends on many factors including
(a) the eligibility of the institution they attend to participate in FSA programs (with
particular respect to the application of the 50% rules); (b) the classification of their
program of instruction; (c) their enrollment status; and (d) whether participation in
DE affects the calculation of their cost of attendance (COA). The eligibility of
institutions offering DE programs to participate in FSA programs was discussed in
the previous section. Factors that affect the eligibility of DE students to receive FSA
are discussed below.
Telecommunications and Correspondence Course Programs. In
general, for a student to be eligible to receive FSA, the student must “be enrolled or
accepted for enrollment in a degree, certificate, or other program ... leading to a
20 ED, FSA Handbook, 2004-2005, pp. 2-147 through 2-148.

CRS-11
recognized educational credential” at an eligible institution.21 For students enrolled
in DE programs, eligibility to receive FSA depends on whether their program of
study leads to a degree, a certificate, or a diploma and whether their courses are
classified as telecommunications or correspondence courses based on the first 50%
rule (see Figure 2). Students enrolled in telecommunications courses are eligible for
FSA if they are enrolled in a program leading to an associate, baccalaureate, graduate,
or professional degree, or in a program of one year or more in length leading to a
certificate. Students taking telecommunications courses as part of a certificate
program that is less than one year in duration are not eligible to receive FSA funds.
Students enrolled in correspondence courses are eligible for FSA if they are enrolled
in a program leading to an associate, baccalaureate, or graduate degree. Students
taking correspondence courses as part of programs leading to a certificate or diploma
(as opposed to a degree) are not eligible for FSA.22 The application of these rules for
determining student eligibility are presented in a flow chart in Figure 2.
Figure 2. Student Eligibility: Effects of Enrollment in
Telecommunications and Correspondence Courses*
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21 HEA, §484(a)(1).
22 ED, FSA Handbook, 2004-2005, pp. 2-154 through 2-155.

CRS-12
Student Enrollment Status. For DE students, enrollment in correspondence
courses may determine their enrollment status for FSA purposes (i.e., full-time, three-
quarter-time, half-time, or less-than-half-time), and affect their eligibility to receive
FSA under certain HEA programs. (These limits are applicable only to
correspondence courses and do not apply to telecommunications courses.)23 DE
students who are enrolled only in correspondence study may not be considered
enrolled more than half-time, regardless of the number of courses they are taking;
however, students who combine correspondence and regular coursework may be
considered enrolled more than half-time. (Under the DEDP this provision may be
waived, thus allowing students enrolled only in correspondence courses to be
considered enrolled full-time.)24
Students’ eligibility for FSA under certain HEA programs depends on their
enrollment status. For example, students must be enrolled at least half-time to
receive aid under the Stafford and PLUS Loan programs.25 Students enrolled less-
than-half-time may be eligible for the Pell Grant and campus-based aid programs
(Federal Supplemental Educational Opportunity Grants (FSEOG), Federal Work-
Study (FWS), and Perkins Loans); however, Pell Grant award amounts are calculated
according to formulas that take enrollment status into account.26 Institutions are
required to award campus-based aid to students enrolled less-than-full-time in a
proportion comparable to the extent that the institutions’ funding allocations were
based on the financial need of such students.27 Figure 3 shows how enrollment in
correspondence courses may affect students’ eligibility for FSA.
23 However, as previously discussed, under the first 50% rule telecommunications courses
are considered to be correspondence courses if more than 50% of the courses offered at the
institution are either telecommunications or correspondence courses, or if less than 50% of
its programs lead to an associate, baccalaureate, or graduate degree.
24 U.S. Department of Education, Student Financial Aid Handbook, 2004-2005, vol. 2 —
School Eligibility and Operation, Chapter 8; Distance Education, pp.2-157.
25 HEA, § 484(b).
26 For additional information on the Pell Grant program, see CRS Report RL31668, Federal
Pell Grant Program of the Higher Education Act: Background and Reauthorization, by
James B. Stedman.
27 For additional information on the campus-based programs, see CRS Report RL31618,
Campus-Based Student Financial Aid Programs Under the Higher Education Act, by David
P. Smole.

CRS-13
Figure 3. Student Eligibility for FSA under HEA Programs:
Effects of Enrollment Status
St
S ud
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Student enro
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.
Cost of Attendance. For DE students enrolled less-than-half-time or only
in correspondence study, the amount of FSA they may be eligible to receive may be
affected by limitations on what may be included in the calculation of their COA.28
For students enrolled less-than-half time, their COA may include only the costs of
tuition, fees, books, supplies, transportation, and dependent care expenses.29 For
students in correspondence study, their COA is generally limited to the costs of
tuition, fees, books, and supplies. (However, for correspondence courses with a
residential training component, an allowance for travel, and room and board also may
be included in the COA.)30 Additionally, for students attending institutions
participating in the DEDP, computer costs may be included in their COA.31
28 In general, a student’s COA is the sum of the following: (a) tuition and fees, (b) allowance
for books, supplies, transportation, and miscellaneous personal expenses, including
computer costs for students enrolled at least half-time, (c) allowance for room and board,
(d) reasonable costs for approved study-abroad programs, (e) dependent care expenses, (f)
reasonable expenses for students with disabilities, (g) reasonable expenses associated with
employment in cooperative education programs, and (h) FSA loan fees (HEA, § 472).
29 HEA, § 472(4). This provision applies to all students, regardless of whether enrolled in
telecommunications, correspondence, or regular courses.
30 U.S. Department of Education, Student Financial Aid Handbook, 2004-2005, vol. 2 —
School Eligibility and Operations, Chapter 8; Distance Education, p. 2-155.
31 HEA, § 486(b)(2).

CRS-14
The Distance Education Demonstration Program
The DEDP was created as part of the 1998 reauthorization of the HEA (P.L.
105-244). The main purpose of the DEDP is to “test the quality and viability” of
educational programs that are relieved of some of the restrictions imposed by the
institutional and student eligibility rules previously discussed. Under the DEDP, the
Secretary may waive a number of statutory and regulatory provisions that might
hinder the provision of DE courses and programs. IHEs, systems of IHEs, and
consortia of IHEs may participate in the DEDP. Having key provisions waived
allows participants in the DEDP and students enrolled in DE courses to qualify for
FSA.
As part of the DEDP, the Secretary may waive the following provisions of law
and regulation:
! The three 50% rules (HEA, §§484(l)(1), 102(a)(3)(A), and
102(a)(3)(B));
! The exclusion of computer costs from the calculation of COA for
students enrolled in correspondence courses (HEA, §472(5));
! The definition of “academic and award year,” as it relates to the
minimum number of weeks of instruction (HEA, §481(a));
! The definition of “eligible program,” as it relates to the minimum
number of weeks of instruction (HEA, §481(b)); and
! Any regulations promulgated by the Secretary under Part F — Need
Analysis, or Part G — General Provisions Related to Student
Assistance Programs, that may inhibit the operation of quality DE
programs.32
The DEDP grew from nine participants in 1999 to 23 participants in 2003.
During that time, the number of offsite students enrolled in these DE programs
increased from less than 13,000 to over 27,000 while onsite course enrollment
increased from 19,000 to over 42,000. In 2003, 17 individual institutions, four
systems, and two consortia were selected in a competitive process to participate in
the program. Participants were chosen to represent a variety of institutional sizes and
missions across the country as well as a variety of delivery methods. According to
ED’s July 2003 report to Congress on the status of the DEDP:
Sixteen participants received waivers of the three provisions that relate to the
amount of correspondence education an institution eligible for the Title IV
student financial assistance programs may provide (the “50% rules”). Seven are
currently using these waivers to continue to participate in the Federal student aid
programs. Fourteen participants received waivers for provisions relating to the
required length of a program and definition of a week of instruction (the “12-
32 HEA, § 486(b)(2).

CRS-15
hour rule”).33 Seven received waivers of the definition of a full-time student as
it relates to correspondence study, and three received waivers of the requirements
relating to satisfactory academic progress. Western Governors University
received additional waivers, as provided in the authorizing statute, because of its
unique structure.34
The Government Accountability Office (formerly the General Accounting
Office) has found that while existing Federal restrictions on schools offering DE
programs affect only a small number of schools, the number of affected schools is
expected to grow in future years. GAO reports that 14 schools (serving 225,000
students) are either now or soon will be adversely affected the 50% rules. Thirteen
of these schools participate in the DEDP and most have obtained waivers from the
50% rules.35
Effect of Waiving the 50% Rules. Two recent reports have considered the
effects of the 50% rules on institutions and financial aid. According to ED’s most
recent report on the DEDP submitted to Congress in July 2003,36 16 of the 23
participating institutions, systems, and consortia37 received waivers from all of the
50% rules. Western Governors University also received similar waivers as specified
in the program legislation.38 Of the institutions that received waivers of the 50%
rules eight, including Western Governors University, relied on the waivers to
continue their eligibility to participate in FSA programs.39
Based on this study, ED concluded that waiving these provisions for DE
programs resulted neither in increased incidences of fraud and abuse nor other
negative consequences.40 In addition, ED concluded that the financial viability and
administrative capability of an institution posed a much greater risk to the integrity
of FSA programs than the mode in which instruction is delivered. ED also
recommended changing statutory language and regulations related to FSA to increase
DE opportunities for students.
33 On November 1, 2002, ED promulgated regulations eliminating the 12-hour rule,
previously codified at 34 C.F.R. §§ 668.2, 668.3, and 668.8 (Federal Register, vol. 67, no.
212, pp. 67047-67083).
34 U.S. Department of Education, Second Report to Congress on the Distance Education
Demonstration Program, 2003. Available at [http://www.ed.gov/programs/disted/
secondreport.pdf]. (Hereafter referred to as ED, Second Report on Distance Education.)
35 U.S. General Accounting Office, Distance Education: Improved Data on Program Costs
and Guidelines on Quality Assessments Needed to Inform Federal Policy, Feb. 2004, GAO-
04-279.
36 ED, Second Report on Distance Education.
37 The 23 participants accounted for a total of 107 institutions.
38 This institution was made eligible to participate in the DEDP through § 486(b)(3)(D).
39 The other institutions had not expanded the size of their distance education programs to
the extent that they would have exceeded or were close to exceeding the 50% rules.
40 ED, Second Report on Distance Education.

CRS-16
GAO also has conducted a study of DE at the postsecondary level.41 This 2002
study examined the factors that would need to be considered before changes were
made to existing statutory language or regulations that affect DE programs. GAO
focused on whether any changes would result in increased access to postsecondary
education or increased incidence of fraud and abuse, and how much it would cost to
implement the changes. GAO concluded that removing restrictions without some
form of management accountability would probably increase occurrences of fraud
and abuse. Suggested forms of accountability included continuing to allow
institutions to request waivers and monitoring institutions that are granted waivers,
or exempting institutions from restrictions based on specific criteria, such as student
loan default rates. In terms of cost, ED has acknowledged that changing existing
laws and regulations to provide DE students with greater access to FSA, could
increase the cost of FSA programs. GAO recommended that ED study the cost of
waiving the 50% rules.
Accreditation and Distance Education
To be eligible for Title IV programs, IHEs must be accredited by an agency or
association recognized by ED as a reliable authority for assessing the quality of
education or training provided by that institution.
There are three major types of accrediting organizations:
Regional accrediting organizations. These eight commissions operate in six
regions of the U.S. and grant accreditation status to whole institutions, as
opposed to individual programs. They accredit approximately 3,000 colleges and
universities — over 97% of which are degree-granting, non-profit institutions.
National accrediting organizations. These organizations operate across the U.S.
and accredit whole institutions. About 80% of the institutions they accredit are
for-profit (proprietary) institutions.
Specialized accrediting organizations. These organizations operate nationwide,
accrediting programs and single purpose institutions. In many cases, a particular
program at an institution (e.g., law program) may be accredited by a specialized
accrediting organization, while the institution is accredited by a regional or
national accrediting organization.42
Federal Recognition of Accrediting Organizations. The HEA
specifically states that an accrediting agency or association will only be recognized
by ED if it:
... consistently applies and enforces standards that ensure that the courses or
programs of instruction, training, or study offered by the institution of higher
41 U.S. General Accounting Office, Distance Education: Growth in Distance Education
Programs and Implications for Federal Education Policy, 2002, GAO-02-1125T. Available
at [http://www.gao.gov].
42 Council for Higher Education Accreditation, Profile of Accreditation, Aug. 2003.
Available at [http://www.chea.org/pdf/fact_sheet_1_profile.pdf].

CRS-17
education, including distance education courses or programs, are of sufficient
quality to achieve for the duration of the accreditation period, the stated objective
for which the courses or the programs are offered.43
After ED determines that an accrediting agency or association should be recognized,
it must then determine the scope of recognition. Section 496(n)(3) states that if an
accrediting agency or association reviews institutions offering DE courses or
programs and meets the requirements of Section 496, its scope of recognition will
include the accreditation of institutions offering DE courses or programs. Thus,
accrediting agencies must have established policies for evaluating the quality of DE
courses or programs offered by an institution.
Standards Used to Evaluate DE Programs and Courses. There are
several challenges associated with evaluating and accrediting DE programs and
courses.44 Accrediting agencies traditionally have focused their efforts on evaluating
institutions providing instruction in classroom-based settings. DE courses and
programs are offered through different modes of instruction, requiring accrediting
bodies to evaluate the curriculum and instruction, faculty support, student support,
and student learning outcomes of these programs in different ways. At the same
time, accrediting bodies must determine whether providers have adequate resources
to offer a high quality program. Secondly, DE programs and courses are offered by
a variety of providers, ranging from traditional four-year institutions to online degree-
granting institutions to corporate universities. Accrediting bodies need to have
standards in place to address the accreditation needs of these different types of
providers. Thirdly, DE is often used for short-term continuing education and training
in professional fields, distinct from a particular degree program. This challenge is
one that has not yet been addressed by many accrediting agencies, as most agencies
do not engage in reviews of short-term training programs, (which in general are not
eligible for FSA).
According to the Council for Higher Education Accreditation (CHEA), all eight
regional accrediting commissions, for example, have established distance learning
guidelines for institutions that operate within existing accrediting standards.45 The
best practices focus on five areas related to DE: (1) institutional context and
commitment; (2) curriculum and instruction; (3) faculty support; (4) student support;
and (5) evaluation and assessment. Within each area, a description of elements
essential to providing quality distance education courses and programs is included.
The regional accrediting commissions also have issued a formal statement regarding
their commitment to quality distance education programs.
43 HEA, § 496(a)(4).
44 Council for Higher Education Accreditation, Accreditation and Assuring Quality in
Distance Learning, CHEA Monograph Series 2002, no. 1.
45 The best practices were based on work conducted by the Western Cooperative for
Educational Telecommunications of the Western Interstate Commission for Higher
Education and completed in 1996. See Council for Higher Education Accreditation. Core
Academic Values, Quality, and Regional Accreditation: The Challenge of Distance
Learning, 2000. Available at [http://www.chea.org/Research/core-values.cfm].

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Other organizations also have developed indicators of quality distance education
programs. For example, the Institute for Higher Education Policy has developed a
series of 24 benchmarks specifically for evaluating internet-based distance
education.46 Several of the national accrediting organizations also have developed
individual standards, policies, or processes for reviewing distance education
programs and courses.
GAO Study of Accreditation of Distance Education Programs and
Courses. While accrediting agencies that review distance education programs and
courses must have established policies and processes for evaluating these courses or
programs in order to be recognized by ED, there is substantial variation in the extent
to which this happens in practice. A recent study on distance education conducted
by GAO specifically examined the issue of accrediting agency assessments of
distance education courses and programs.47
The GAO report examined the issue of accreditation from two perspectives: (1)
the extent to which accrediting agencies included distance education programs in
their reviews; and (2) the extent to which accrediting agencies considered student
outcomes in classroom-based programs and distance education programs. Of the
seven accrediting agencies examined by GAO, all seven had policies and procedures
in place for reviewing distance education courses and programs. There were
differences, however, in the extent to which distance education programs were
actually reviewed during assessments of the quality of an institution’s educational
program. For example, GAO found that some accrediting agencies do not review
distance education programs unless at least half of the institution’s courses are
offered by distance education, while others have set a 25% threshhold for reviewing
distance education programs.
GAO also examined the extent to which student outcomes are considered by
accrediting agencies in their evaluations of both classroom-based and distance
education programs. Accrediting agencies were examined based on three criteria
developed by GAO: “(1) setting measurable goals for program outcomes, (2)
developing strategies for meeting these goals, and (3) disclosing the results of their
efforts to the public.”48 Only one of the seven accrediting agencies met all three
criteria with respect to evaluating DE programs.
46 The Institute for Higher Education Policy, Quality On the Line: Benchmarks for Success
in Internet-Based Distance Education, Apr. 2000. Available at [http://www.ihep.com/
Pubs/PDF/Quality.pdf].
47 U.S. General Accounting Office, Distance Education: Improved Data on Program Costs
and Guidelines on Quality Assessments Needed to Inform Federal Policy, GAO-04-279,
2004. Available at [http://www.gao.gov].
48 It should be noted that these are not criteria that accrediting agencies are required to meet
by law or by ED. Rather, they are criteria developed based on GAO’s experience in
examining how organizations focus on outcomes.

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Issues for Reauthorization
During the 109th Congress, it is likely that a number of bills will be introduced
to amend and extend authorization for HEA programs. Given the substantial changes
that have occurred in the availability of communications technology and the demand
for DE courses since the 1998 HEA reauthorization, there are several important
issues affecting DE that are likely to be debated as reauthorization is considered. Key
topics include whether to amend or extend the DEDP, whether to retain or amend the
50% rules, whether to retain or amend the criteria used to determine institutional and
program eligibility for proprietary and postsecondary vocational institutions that offer
DE programs, and whether to revise the requirements regarding DE that accrediting
bodies must adhere to in order to be recognized by ED.
Distance Education Demonstration Program
Under the DEDP, IHEs offering programs through DE are able to have waived
a number of Title IV program requirements that might otherwise have made them
ineligible to participate in Title IV programs. (The specific provisions of the DEDP
were described earlier in this report.) During reauthorization, it may be debated
whether to retain the DEDP, to expand it to include more IHEs, or to amend specific
provisions of the HEA so that waivers under the DEDP would no longer be required.
For instance, requirements applicable to the disbursement of student aid funds
are based on student participation in term-based, on-campus instruction. Existing
requirements may restrict federal aid to students participating in DE and may not be
easily applied to DE programs. The amendments of 1998 partially addressed this
issue through the creation of the DEDP. Congress may debate whether changes
should be made to the determination of student attendance status (i.e., full time or
part time) based on the type of DE program in which the student is enrolled. In
addition, Congress may consider the inclusion of room and board in the calculation
of FSA for students participating in different types of DE programs.
While the waiver of several requirements is available under the DEDP, the
Congress may amend some of these provisions so that DE programs would become
eligible for FSA without the need for these waivers. A number of these areas are
discussed below.
50% Rules
As previously discussed, the 50% rules affect both institutional eligibility and
student eligibility to participate in Title IV FSA programs. In the 108th Congress,
legislative proposals were introduced in the House and Senate that would curtail the
scope of the 50% rules as they apply to DE. For example, proposals have been made
to eliminate or amend the provision in the first 50% rule that leads to
telecommunications courses being considered correspondence courses in certain

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instances.49 Many of these proposals also would specifically make the other two 50%
rules applicable only to correspondence courses. For purposes of determining
institutional and student eligibility for FSA purposes, these proposals would in effect
treat courses offered through telecommunications in the same way as courses offered
through traditional methods. The 50% rules would remain in effect for institutions
offering courses through correspondence.
There is some debate about whether the 50% rules hinder IHEs’ ability to meet
student demand for DE programs and courses. If the rules were relaxed and there
was sufficient demand, increased numbers of students could begin taking advantage
of DE programs and courses. This could result in increased costs to the federal
government if more students became eligible for FSA. Also, there may be some
concern that eliminating the 50% rules could result in increased incidences of fraud
and abuse among eligible IHEs. A number of the proposals that would amend the
50% rules, however, would also add new requirements applicable to the accreditation
of DE programs, potentially as a means of assuring quality. This is discussed in
further detail below.
DE at Proprietary and Postsecondary Vocational Institutions
Under current law, proprietary and postsecondary vocational institutions must
offer at least one “eligible program” to be eligible to receive funds under Title IV.50
A program is determined to be an eligible program if it is of a specified minimum
length. In the 108th Congress, several proposals were made to amend the definition
of “eligible program,” applicable to proprietary and postsecondary vocational
institutions, so that it would also include specific references to programs offered
through DE. Some proposals would define a DE program as an eligible program if
(1) the program is an otherwise eligible program; (2) it is offered in whole or part
through telecommunications; and (3) it is offered by an IHE that has been evaluated
and determined by an accrediting body recognized by ED to have the capability to
effectively provide DE programs.51
Alternatively, other proposals would add a category to the definition of an
eligible program for non-correspondence DE programs, which it appears would be
distinct from the definition based on program length.52 A program offered
predominately through DE methods and processes (other than through
correspondence courses), would be an eligible program if the program has been
reviewed and approved by a recognized accrediting body and if the IHE offering the
49 See, for example, H.R. 2913, H.R. 3039, H.R. 4283, S. 901 and S. 1203.
50 HEA, § 102. H.R. 3039 and H.R. 4283 would establish a so-called “single” definition
for an IHE under § 101. Under these proposals, institutions offering at least one eligible
program would generally become eligible to participate in all applicable HEA programs.
51 See, for example, H.R. 3039 and H.R. 4283.
52 For a discussion of current requirements, see CRS Report RL31926, Institutional
Eligibility for Participation in Title IV Student Aid Programs Under the Higher Education
Act: Background and Issues, by Rebecca R. Skinner, pp. 8-9.

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program has not run afoul of certain financial and administrative requirements.53
Some of these proposals would establish new criteria under which proprietary and
postsecondary institutions offering DE programs could become eligible to participate
in Title IV programs. These proposals would allow programs to qualify as “eligible
programs” based on the means through which education is provided (i.e., DE), rather
than the duration of the program as is required under current law.
Accreditation
Issues related to accreditation may be debated as the HEA is considered for
reauthorization. Proposals dealing with accreditation range from those that would
eliminate accreditation and preaccreditation requirements for institutional eligibility
to those that would create additional requirements applicable to accrediting bodies
— for example, expanding the scope of their recognition to include the evaluation
of the quality of IHEs offering DE.54 With respect to DE, there are two major issues
that involve the accreditation of IHEs. These involve the standards applicable to the
accreditation of DE programs and courses, and policies governing the transferability
of credit from one IHE to another. The first issue is particular to DE, while the
second issue is part of the larger debate about accreditation.
Under current law, §496 of the HEA specifies requirements for the recognition
of accrediting bodies by the Secretary. With regard to accreditation, DE programs
are currently treated in a manner consistent with education provided through
traditional means.55 Several bills have been introduced that would establish
additional requirements specific to DE for accrediting bodies seeking to have the
accreditation of institutions offering programs through DE included within the scope
of their recognition. Proposals include adding to the requirements of accrediting
bodies specific provisions regarding the assessment of: student achievement for
students enrolled in DE programs, the availability of resources and support services
for DE students, and the interaction between students and faculty in DE programs.
It appears that these proposals would establish a policy of treating programs
offered through DE differently than programs offered through traditional methods.
Some might argue (in light of GAO’s findings) that DE programs are different
enough from traditional education programs to require special review, while others
might be concerned that additional requirements are inappropriate and that they
amount to a new burden being placed on accrediting bodies.
There is also debate over the practice of some IHEs being selective in their
recognition of credits earned at other accredited IHEs when students seek to transfer
from one IHE to another. For instance, some IHEs only recognize credits from IHEs
53 See, for example, H.R. 2913 and S. 1203.
54 See, for example, H.R. 838, which would eliminate accreditation and preaccreditation
requirements for institutional eligibility; and H.R. 2913, H.R. 3039, H.R. 4283, and S. 1203,
which would create additional requirements for the recognition of entities accrediting IHEs
offering programs through DE.
55 See, for example, HEA, §§ 496(a)(4) and 496(n).

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accredited by specific types of accrediting agencies (e.g., regional accreditors). Some
have expressed concern as to why credits earned for a course taken at an IHE
accredited by an agency or association recognized by the Secretary (and which may
have been paid for in part through FSA) would not be accepted for transfer by
another accredited IHE. Non-acceptance of transfer credits may be seen as inefficient
for the student, who may need to complete and pay for a second comparable course;
inefficient for institutions, when seats are being filled by students re-taking courses;
and inefficient for the federal government, if FSA is being used to support students
re-taking courses in such instances.
In reaction to concerns such as these, proposals have been made to require IHEs
to adopt policies stating that they will not deny students the transfer of credits from
other IHEs that have been accredited by agencies or associations recognized by the
Secretary, solely on the basis of the accrediting body.56 Some IHEs, however, view
this as eroding their autonomy in establishing their own academic standards. For
instance, the proposed policy could be viewed as prohibiting IHEs from having
policies regarding the acceptance of transfer credits that raise the bar above the
minimum established by any accrediting body recognized by the Secretary. Even if
some accrediting bodies voluntarily established more rigorous standards for the IHEs
they accredit, IHEs accredited by those bodies would be prohibited from denying the
transfer of credit from IHEs held only to the minimum standards required by the
Secretary, without going through a formal process of reviewing individual courses
against an established set of objective criteria. Some suggest that such a review
process would contribute to the escalation of college costs.57
56 See, for example, H.R. 4283.
57 Testimony of Barmak Nassirian, Associate Executive Director, American Association of
Collegiate Registrars and Admissions Officers, in U.S. Congress, House Committee on
Education and the Workforce, H.R. 4283, the College Access & Opportunity Act: Are
Students at Proprietary Institutions Treated Equitably Under Current Law? hearing, June
16, 2004.