What it means for your career training programs
Back in October, the Department of Education published its Federal Register for the final regulations that will go into effect on July 1, 2024. These rules were released to “significantly enhance oversight and accountability” for institutions. Sending out notices of proposed rulemaking throughout the year is standard procedure for the Department, but with some extremely hot topics like financial responsibility and gainful employment stealing all the thunder, a new limitation was brought to the forefront that may have snuck up on most of us.
Currently, the law allows for an educational program to be up to 150% of the state’s minimum hour requirement. It is common across the education industry to offer programs at additional hours past the state minimum, but within that threshold. The critical objective is for programs to be at least 600 clock hours. One of the more familiar examples is a program offered at 750 clock hours with a state minimum of 500 clock hours. Under the updated certification regulations, career training programs will now be limited to no more than 100% of the length authorized by the state for certification or licensure. Meaning, programs will need to be shortened to state minimum to qualify for aid.
Breaking Down the Changes to State Minimum Hours for Institutions
Once a program falls into the 300-599 clock hour range, it would then identify as a short-term program. It would no longer be eligible for Pell Grants, and it would be subject to the annual 70% completion and 70% placement rate requirements (70-70). The Title IV loan eligibility of short-term programs is directly related to meeting those percentages. They will need to be reported on an annual basis with an attestation or as part of your yearly Title IV examination.
An institution must notify the Department as soon as possible if it has determined that the short-term program failed to meet the completion and placement requirements for the given award year. When this occurs, the program is ineligible for Title IV loans beginning with the following award year. And, unfortunately, if the program does not meet 70-70, and subsequent award year funds have already been drawn, those monies will need to be returned to the Department.
Implementation Dates to Know
July 1, 2024 is the key implementation date. The preamble to the final regulations includes provisions that will permit institutions to continue offering a program after the implementation date that exceeds the minimum length for students, who were enrolled prior to the regulatory change taking effect. Institutions may temporarily offer two versions of the same program concurrently but will not be able to enroll new students in the version of the program that exceeds the state minimum length. Simply stated, students who enrolled in the “old” program prior to July 1, 2024 can complete all the hours in that program. Any student that enrolls on or after July 1, 2024 will need to be enrolled in the “new” program. An institution is not required to report both programs’ completion and placement percentages to the Department, but it must internally document the presence of the two separate versions of the program and indicate which students are enrolled in each.
Additional Department Guidance
In one of the Department’s recent Electronic Announcements, the Department stated its awareness of issues caused by the final regulations for short-term programs, and it has plans to provide additional guidance on the implementation of the regulations, including instructions for short-term program transitions in the near future. The announcement also included, “Given the current confusion at institutions and in the audit community about the applicability of the attestation requirements, the Department does not plan to take action against an institution solely on the basis of the institution’s failure to have the rates substantiated timely by an independent auditor for award years ending on June 30, 2025 or earlier, unless an institution has already been informed it needed to comply with these requirements and failed to do so.” Ultimately, the Department understands the impact the regulations may have on schools.
Be Prepared to Implement
As the implementation date is rapidly approaching, there are a couple options to consider. We recommend getting far ahead of your scheduled program start dates and prepare your institution for the short-term program requirements. While this isn’t an immediate option, we suggest inquiring about increasing your state authorization agency’s minimum hour requirements. The upcoming implementation only affects certain programs but does impact most, if not all, states. Learn more by talking to our team.
