BOSTON UNIVERSITY • COLUMBIA UNIVERSITY • DUKE UNIVERSITY • HARVARD UNIVERSITY JOHNS HOPKINS UNIVERSITY • MASSACHUSETTS INSTITUTE OF TECHNOLOGY • NEW YORK UNIVERSITY

STANFORD UNIVERSITY • UNIVERSITY OF CALIFORNIA • UNIVERSITY OF PENNSYLVANIA UNIVERSITY OF TEXAS AT AUSTIN • VANDERBILT UNIVERSITY • WELLESLEY COLLEGE • YALE UNIVERSITY

August 24, 2016 Sophia McArdle, Ph.D. The U.S. Department of Education 400 Maryland Ave SW, Room 6W256 Washington, D.C. 20202 Dear Dr. McArdle, We write on behalf of the undersigned colleges and universities in response to the Department of Education’s Notice of Proposed Rulemaking (NPRM) at 81 Fed. Reg. 48,598 (July 25, 2016—Docket ID ED-2016-OPE-0050) concerning proposed amendments to the State Authorization provisions of the Institutional Eligibility regulations of the Higher Education Act of 1965, as amended (HEA) and to the institutional disclosure requirements of the HEA’s Student Assistance General Provisions. As institutions at the forefront of efforts to use new media and technology to expand access to quality education, we appreciate the opportunity to comment on the approach the Department should take with respect to state authorization, and the impact such federal and state regimes may have on our distance education programs and our technology-enhanced residential teaching, which often benefits from pedagogical innovations discovered in the former category. Our letter offers some general observations on the proposed regulations and we attach an appendix with specific questions and concerns. We broadly support the Department’s objective of ensuring the integrity of federal student aid programs, and we support reasonable efforts to target institutions that provide costly, substandard programming or otherwise abuse Title IV funding. Also, and for the most part, we are pleased that the NPRM carries forward the tentative agreements, reached in prior negotiated rulemaking, on state reciprocity and the limited requirement to obtain state authorization only to the extent a state requires it. However, we are concerned that the NPRM overreaches in a number of areas, threatening to impede our progress in online education by mandating compliance with these rules, under penalty of loss of overall federal financial aid eligibility. In addition, despite years of discussion, key provisions in the NPRM’s proposed rule are ambiguous or undefined, making it difficult to assess the full scope and implications of the framework as proposed, for meaningful comment. We are very concerned that this NPRM may result in a final rule that, depending on how terms are defined and what options (unsettled as yet in the proposed rules) are chosen, could lead to a significant increase in the compliance burden, delays in the development of new programs and courses, and the loss of valuable, high-quality educational programming without increasing protections for students. General Observations We appreciate the Department’s interest in our efforts to use distance education to remove traditional barriers to accessing higher education, including economic status and geographic location, and to further our commitment to expand the reach of high-quality instruction to all interested students. As this Administration has recognized, emerging technologies carry the potential to expand access to instruction, adapt the educational experience to individual learning styles, and fulfill the growing national need for lifelong learning to maintain and increase skills and competencies. Yet we have concerns that the NPRM fails to balance the Department’s stated interest in consumer protection with the Administration’s broader policy promoting access to these high-quality, innovative educational opportunities.

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In recent years, our institutions have made substantial, independent investments to develop highly interactive online degree programs and courses to improve teaching and learning for the benefit of students on our campuses and beyond. These range from globally accessible, low-cost massive open online courses (“MOOCs”) to small private online courses (“SPOCs”), the latter of which feature both synchronous and asynchronous learning opportunities and are often offered for credit to students enrolled in an on-campus program. Our online offerings also include certifications and professional development opportunities to support career advancement in areas such as law, business, education, and health care. In addition, many of our institutions have invested in the development of online learning platforms, which host a diverse array of courses and programs for students in remote locations. Our ongoing development of platforms has yielded innovative tools for delivery of content to our on-campus students, allowing faculty to hold discussions, upload readings, show videos and audio, and assess and grade student work, all without regard to the physical location of the faculty member or the members of her class. We continue to study or experiment with other, related education technologies to improve teaching and learning. Many of these distance education programs yield insufficient revenue to cover their development and operational costs. Moreover, the amount of Title IV funding for students enrolled in our distance programs comprises a very small percentage of our overall Title IV funding. Yet we continue to ensure that the quality of the content, faculty, and production of such programs is on par with what we deliver to students enrolled in our on-campus programs. We are troubled by state and federal efforts to exercise direct and indirect control over the content, quality, and administration of our educational programs through prior review and approval mechanisms. Our institutions have been approved to operate in our respective home states going back decades (even centuries, in some cases), and we have substantial freedom from state involvement in developing our many programs of instruction, of which distance education are a relatively small number. Our respective state legislatures have long recognized our institutions’ powers of self-governance over academic affairs, as established in our founding documents. Our educational programs are accredited by our respective accrediting agencies, which establish and enforce standards of educational quality and, by extension, eligibility for federal aid programs. Our accreditations supply sufficient proof of the quality of our educational programs for out-of-state students enrolled on our main campuses; we question why accreditation is not also sufficient for out-of-state students who access our programs online. While we recognize the importance of the “regulatory triad” by which the Department, the states and accrediting agencies act jointly to assure the integrity of federal financial aid programs, we are troubled by the current exercise of authority in many states in the area of distance education. State authorization requirements impose costs, burdens, and restrictions on all entities, including those that provide high-quality programs and appropriate and lawful information to their students about those programs. As drafted, the proposed rule would significantly increase our compliance costs associated with these programs over and above the substantial costs associated with existing state and foreign requirements. In addition, even minor instances of noncompliance with a host of state and foreign requirements could result in the loss of Title IV funding for the institution. We contrast our distance education model with providers with limited bricks-and-mortar operations, who keep their costs of production low by offering lower quality programs, and whose principal business is to make a profit on distance education by charging significant fees to students and encouraging them to pay for their education with Title IV funding and other loans. These institutions may be able to absorb additional costs of compliance and continue their for-profit operations, by increasing fees and cutting

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costs. Because we are unwilling to compromise on the quality and affordability of our offerings, we fear the Department’s proposed rule will have a negative and disproportionate impact on non-profit colleges and universities, ultimately forcing us to limit our distance offerings and curtail their national and global reach. As a result, the public will have to rely still more on commercial programming offered by for-profit providers that view education first and foremost as a commodity. Although we appreciate that the Department has recognized the importance of state authorization reciprocity agreements (SARA) as a means to fulfill requirements for state authorization, many institutional leaders in distance education, including many of those represented on this letter, are located in states that at present have not agreed to join reciprocity pacts. The proposed regulations would penalize institutions located in non-SARA states for legislative actions (or inaction) outside their control: the compliance and financial burdens the Department imposes on non-SARA institutions are substantially greater than those it imposes on institutions located in states that have adopted SARA. Even as SARA expands to additional states, institutions would still be required to track the locations of our distance education students in order to determine if there are authorization requirements for any remaining non-SARA states. We agree with the Department that states can play an important role in assuring that consumers of distance education are protected against bad actors in the higher education space. States can apply and enforce their existing consumer protection laws against entities that misrepresent their programs or engage in fraudulent or otherwise illegal behavior. Indeed, as the proposed regulations urge, states can develop systems for receiving and acting on complaints specifically in the area of higher education. But, at a time when innovation in distance education is on the rise, regulating high-quality, lawful instruction through costly prior authorization regimes threatens to impede our progress in this important area. In particular, we believe the proposed framework is burdensome and counterproductive to our efforts to provide high-quality, low-cost programing to students for the following reasons:

• The NPRM appears to condition Title IV funding on institution’s compliance with state authorization laws, even with respect to programs that do not receive such aid and therefore seem outside the scope of the Department’s regulatory interest (if not its authority);

• It requires institutions to demonstrate that each state in which they offer distance education has a process to review and take appropriate action on student complaints, when complaint processes available in an institution’s home State would suffice for receipt of any complaint against the institution (as SARA recognizes);

• The NPRM conditions eligibility for Title IV funding on institutional compliance with all requirements of foreign governments for authorization of foreign additional locations and branch campuses; and

• It conditions Title IV funding on a burdensome requirement for all institutions to research and disclose each State’s refund policies, educational prerequisites, and licensure requirements.

Rather than take on these compliance burdens, or acquiesce to a state’s position that their instruction is unlawful absent prior state authorization, many colleges and universities may elect to limit their efforts to provide high-quality, free or low-cost programming to students outside the schools’ home states. We understand that in a number of cases, institutions have already made the difficult decision to scale back programming due to state authorization concerns. Following issuance of the NPRM, we have learned of institutions considering exclusion of students residing in states with particularly onerous authorization laws. It is our great worry that the regulation will undermine the Department’s stated interest in consumer protection if the result is to narrow, rather than expand, access to educational opportunities. Without substantial new opportunity for input and reconsideration, we urge the Department to withdraw the NPRM and work with the higher education community to draft a targeted response to the abuses in

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distance education. Alternately, and at a minimum, we strongly recommend that the Department consider the following modifications and provide institutions and states sufficient time to comply with the proposed regulations without disrupting current distance education offerings, with time for implementation over several years. Thank you for this opportunity to comment on the NPRM.

Chrysanthos Dellarocas Associate Provost for Digital Learning and Innovation Richard C. Shipley Professor in Management Boston University

Soulaymane Kachani Vice Provost for Teaching and Learning Senior Vice Dean and Professor, Columbia Engineering Columbia University

Edward Balleisen Associate Professor of History and Public Policy Vice Provost for Interdisciplinary Studies Acting Vice Provost for Academic Affairs Duke University

Peter Bol Vice Provost for Advances in Learning Charles H. Carswell Professor of East Asian Languages and Civilizations Harvard University

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Sanjay E. Sarma Vice President for Open Learning Fred Fort Flowers and Daniel Fort Flowers Professor of Mechanical Engineering Massachusetts Institute of Technology

Barnett W. Hamberger Associate Provost for Academic Program Review New York University

John Mitchell Vice Provost for Teaching and Learning Mary and Gordon Crary Family Professor in the School of Engineering Professor of Computer Science Stanford University

Aimée Dorr Provost and Executive Vice President for Academic Affairs University of California

Philip Tang Vice Provost for Academic Services Johns Hopkins University

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Beth Winkelstein Vice Provost for Education Associate Professor of Neurosurgery in the School of Medicine University of Pennsylvania

Maurie McInnis Executive Vice President and Provost University of Texas at Austin

Cynthia J. Cyrus, Ph.D. Vice Provost for Learning and Residential Affairs Professor of Musicology and Affiliated Faculty in Women’s and Gender Studies Vanderbilt University

Andrew Shennan Provost and Dean of the College Wellesley College

Scott A. Strobel, Ph.D. Henry Ford II Professor HHMI Professor Deputy Provost for Teaching and Learning Vice President for West Campus Planning and Programming Development Yale University

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Notice of Proposed Rulemaking at 81 Fed. Reg. 48,598 Docket ID ED-2016-OPE-0050

Specific Comments

State Authorization Requirements Proposed Section 34 CFR § 600.2

1. The Department proposes to define a “State authorization reciprocity agreement” as “[a]n agreement between two or more States that authorizes an institution located and legally authorized in a State covered by the agreement to provide postsecondary education through distance education or correspondence courses to students in other States covered by the agreement and does not prohibit a participating State from enforcing its own consumer protection laws.” (emphasis added) We presume that the Department intends the italicized language to mean that, if a State joins SARA, it does not give up its ability to investigate misrepresentation, fraud or other illegal activity by colleges based in other States. We note that, in order for SARA to have its intended effect, each State agreeing to reciprocity must decline to enforce against SARA institutions those laws specifically directed at colleges offering distance education to residents of the State and must agree that such oversight will be centralized in the college’s home State. We understand the Department to mean that a State retains the ability to use any of its general-purpose consumer protection laws against institutions that violate those laws. We recommend that the Department clarify this point and modify the italicized language to say “and does not prohibit a participating State from enforcing its own general-purpose consumer protection laws.”

Proposed Section 34 CFR § 600.9(c) 1. We are most concerned that the State authorization requirement under proposed Section 600.9(c)

does not clearly confine the scope of the regulation’s application to instances in which an institution wishes to secure HEA funding eligibility for the particular distance learning program on offer. The language as written permits an interpretation that would rule institutions entirely ineligible to participate in Title IV programs because they have not met applicable State authorization requirements to offer non-Title IV programming. An institution could face being ruled ineligible for federal financial aid for all of its on-campus programs even if none of its distance education programs sought to participate in Title IV aid for enrolled distance students — or, for that matter, if any one non-Title IV program or course, including a course offered free of charge to students worldwide, failed to exclude a student from a State that had not authorized the instruction. If the Department does intend to apply the State authorization requirement to overall institutional eligibility, even in cases in which no Title IV funds are used for students enrolled in an institution’s distance education programs, we request clarification as to the Department’s authority and interest to regulate non-Title IV distance education programs.

2. While we recognize that the Department intends to defer to each State to determine its own requirements for institutions to lawfully provide distance education to State residents, we do not understand the Department’s blanket endorsement of all State authorization laws. Specifically, we question the federal interest at stake in conditioning Title IV eligibility on compliance with various State authorization laws without regard to the scope of those laws, the standards they set, the financial and reporting burdens they impose, and whether they are narrowly tailored to protect consumers without unreasonably and perhaps unlawfully encumbering educational instruction and innovation. We submit that some of these laws may overreach and unduly and preemptively burden the rights both of academic institutions to instruct students and of students to receive

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instruction. Some States may be motivated not by consumer protection goals, but instead by an interest in raising revenues through filing fees or protecting in-state higher education programs at the expense of out-of-state programs. In many instances, consumer protection interests can be appropriately served by enforcement of general purpose consumer protection laws against those institutions that have engaged in misrepresentation, fraud or other illegal activity. We note in this regard that the Department has not provided evidence that the various State authorization laws actually function to deter substandard or abusive providers of distance education (or, alternatively, that the Department and the States would be unable to effectively constrain bad actors through the less restrictive means of enforcing existing federal law and general-purpose State consumer protection laws).

3. We are concerned that the State authorization requirement in proposed Section 600.9(c) applies at such time as an institution “offers” postsecondary education through distance education or correspondence courses to students in a State in which the institution is not physically located, whether or not the institution actually enrolls students in the State. Thus, under the proposed federal rule, an institution may face a loss of federal financial aid for failure to comply with requirements of a State in which it has not enrolled any distance education students. Certain distance education programs by design have limited enrollment, such as pilot programs, specialized programs and small private online courses (SPOCs). An institution may “offer” courses simply by providing information to the public regarding upcoming course offerings. Indeed, an institution might well decide not to enroll students in a particular state, rather than comply with its state authorization laws, but its offer of programming may nevertheless be visible to or received by residents of that state. The proposed rules should permit institutions to identify the States in which applicants to particular programs reside, and then make determinations regarding the need for authorization based on expected enrollment, regardless of whether or not courses have been offered more broadly. We note that Section 600.9(a)(1)(i)(A) refers to an institution’s authorization “to operate educational programs,” and we presume that “to operate” means to actually enroll students in such programs.

4. We are concerned that the rule as proposed will reach any distance education program within the ambit of State authorization laws, including MOOCs and courses or programs that do not charge tuition (including free programs that give students the option, without obligation, to pay for additional services or credentials, such as ID-verified certificates). We have questions about the Department’s authority to tie federal funding to compliance with State laws that assert authority to pre-approve the provision of free instruction over the Internet. Where students are not asked to pay for content, it is unclear what consumer protection interest, or what government interest, might justify regulating content and speech in this way. As MOOCs and other free programs comprise a meaningful segment of our institutions’ online instruction offerings, we request clarification as to whether the proposed rule applies in cases where an institution’s noncompliance with State authorization laws relates to MOOCs and other offerings for which learners are not obligated to pay.

5. We note that proposed Section 668.50(a) applies to institutions that offer a program “solely” through distance education or correspondence courses, but that proposed Section 600.9(c) does not contain this same limitation. Institutions offer some programs that have both an on-campus component as well as a distance education component. In order to complete these “hybrid programs,” each enrolled student must fulfill both the on-campus and distance education requirements. Programs, including hybrid programs, with on-campus components are subject to the laws of the State in which the institution’s physical campus is located. We see no additional purpose served by requiring hybrid programs to meet both home State requirements and authorization requirements from each State in which students reside, simply because a portion of

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the program is offered through distance education. If students attend any portion of a program at the physical campus where the institution is located, the program is subject to the oversight of authorities in the State where the campus is located. We therefore recommend that the Department amend Section 600.9(c) to apply only to educational programs that can be completed “solely” through distance education or correspondence courses.

Complaint Process Proposed Section 34 CFR § 600.9(c)(2)

1. Proposed Section 600.9(c)(2) would require an institution to document that there is a State process for review and appropriate action on complaints concerning the institution from any student enrolled in its distance education programs: (i) in each State in which the institution’s enrolled students reside, or (ii) through a reciprocity agreement that designates for this purpose either the State in which the institution’s enrolled students reside or the State in which the institution’s main campus is located. We note that, in cases where the institution’s home State and the State of instruction are operating under a reciprocity agreement, the Department accepts institutional reliance on the complaint process available in the State in which the institution’s main campus is located. We question then why the Department does not recognize an institution’s home State as an appropriate venue for review and action on any student complaint. We request clarification as to the Department’s interest in requiring institutions in non-SARA States to document that there is a State process for review and appropriate action on student complaints in each State in which the institution enrolls students, when the Department views in-state complaint resolution processes as sufficient for those institutions from States that participate in SARA.

2. Unlike the scope of proposed Section 600.9(c)(1)(i), which requires that an institution must “meet any State requirements” for it to be authorized to offer distance education in that State (meaning that distance education may be lawfully provided without prior authorization in States that have no authorization requirements), proposed Section 600.9(c)(2)(i) would impose on an institution, under penalty of loss of federal funding, to document that each State in which it enrolls students must have a complaint resolution process in place. We note that whether or not a State has the required process in place is up to the State; institutions cannot control States’ internal processes and should not be held to account — or forced to withhold instruction from students — if a State has a process that, in the judgment of the Department, does not provide effective review and appropriate action. Moreover, we request clarification from the Department as to whether it intends that each State must have mechanisms specific to the complaints of distance education students or to complaints about institutions of higher education, or whether a State’s processes for receiving and acting on general consumer protection complaints would suffice.

3. State processes differ and in some cases defer these issues to some extent to institutions. If the Department intends to defer to the States on what process or standard should apply to review and resolution of student complaints, it would be helpful if the Department would clarify this and make clear that an institution need only document that the State has a process for receipt of consumer complaints and that all decisions regarding resolution, including referral or further action, are up to the State. If, instead, the Department does not intend to defer to the States to determine what, if any, process should be in place for review and action on student complaints, we ask the Department to provide further information as to: (i) which States it believes have processes that would not meet the requirement of the proposed rule and why, and (ii) the legal authority by which the Department proposes to hold institutions to account for the inadequacies (in the view of the Department) of State mechanisms for complaint resolution?

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Not all States will have sufficient infrastructure or mechanisms to handle in a timely manner existing complaints or the increase in complaints that may result from this new federal regulation. The institution should not be held accountable for perceived or actual inadequacies in the State’s processes, or for reasonable judgments by State authorities that many complaints (or categories of complaints) do not merit action (or alternatively, that the institution, not the government, is the appropriate forum for resolution of complaints).

4. We are concerned that proposed Section 600.9(c)(2) applies to all enrolled students, including those enrolled in MOOCs and courses or programs that do not charge tuition (including free programs that give students the option, without obligation, to pay for additional services or credentials, such as ID-verified certificates). As noted above, where students are not asked to pay for content, it is unclear what consumer protection interest is at stake if a student objects to the quality or content of instruction. It seems plausible that States will not have mechanisms for resolution of complaints from individuals who have received free content over the Internet. We request clarification as to whether the proposed rule would apply in cases where a State has no established process for resolving complaints from students enrolled in MOOCs and other offerings for which they are not obligated to pay.

Foreign Additional Locations and Branch Campuses Proposed Section 34 CFR § 600.9(d)

1. We are concerned that Section 600.9(d) exceeds the Department’s authority by mandating compliance with the requirements of foreign governments. The HEA defines an “institution of higher education” as “an educational institution in any State that is legally authorized within such State to provide a program of education beyond secondary education.” (emphasis added) We see no authority in the HEA and no precedent for the Department to regulate institutions on the basis of their authorization (or lack thereof) in jurisdictions outside the United States.

2. We are also unclear as to the legal authority for States to place limitations on institutions’ establishment or operation of foreign additional locations or branch campuses, and therefore question, and ask the Department to clarify, the premise underlying Section 600.9(d)(1)(vi).

3. With respect to any additional location at which 50 percent or more of an education program is offered, or will be offered, or at a branch campus, we note an inconsistency between the wording of Section 600.9(d)(1)(i), which requires that such an institution “must be legally authorized” to operate by an appropriate government authority, and the wording of Section 600.9(d)(1)(ii), which requires the institution to provide upon request documentation to the Secretary that the government authority is aware that the additional location or branch campus provides postsecondary education and does not object. We ask the Department to clarify if it intends to require affirmative legal authorization by a foreign government, even if the foreign government has no mechanism or requirement for such authorization. If that is not the Department’s intent, we ask the Department to change Section 600.9(d)(1)(i) to a conforming “no objection” standard, and, for purposes of Section 600.9(d)(1)(ii), we ask what would constitute sufficient documentation of the foreign government’s lack of objection.

4. The provisions of Section 600.9(d) also raise significant federalism issues, as they impose substantive requirements for foreign authorization that go beyond what individual States may decide to require with respect to authorization of institutions outside U.S. borders. Indeed, State agencies may decline to regulate the foreign locations of in-state institutions. Section 600.9(d)(v) requires an institution to report at least annually to the State in which its main campus is located

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regarding the establishment or operation of each foreign additional location or branch campus, even if the State has no mechanism for receiving and processing such information. This will force the need to create a reporting mechanism that is costly for both the institution and the State, without evident benefit. We question why the Department does not defer to the States with respect to what reporting obligations institutions should or should not owe State agencies.

5. Please clarify the Department’s intentions in including the phrase “or will be offered” in Section 600.9(d) At what point would the Department regard an institution as failing to comply with respect to programs that “will be” offered as opposed to programs that are offered? If an institution plans to offer a program at some undetermined point in the future, but has not yet offered the program (i.e., it has not yet advised students of the potential program, much less enrolled them), is it nevertheless out of compliance with the foreign location authorization requirements of the proposed rule if it has not met those requirements as of the time the institution commences development of the program with an intent to offer it?

6. We are most troubled by the Department’s evident interest in conditioning institutional eligibility for Title IV funding on compliance with any requirements a foreign government might seek to impose. A foreign government might wish to censor classroom content or require institutions to discriminate against categories of faculty or students in violation of institutional values and policies, or it might condition ongoing legal authorization on the institution’s compliance with such requirements. These concerns may lead individual institutions to decline to pursue negotiations with certain foreign governments. However, by deferring to foreign governments to establish any criteria for authorization they might wish, and conditioning institutional eligibility for Title IV funding on an institution’s compliance with such criteria, the proposed rule increases the likelihood that foreign governments will seek to exact numerous and problematic concessions from institutions looking to establish additional locations and branch campuses, with the inevitable result that institutions will pull back from such projects. We believe this will present a significant impediment to our global education efforts.

Disclosure Requirements Proposed Section 34 CFR § 668.50

1. We request clarification of the term “prospective students.” Is this intended to track to the definition of “prospective student” at 20 U.S.C. § 1092(a)(2), i.e., “any individual who has contacted an eligible institution requesting information concerning admission to that institution?”

2. In general, we object to the premise of the proposed rule that institutions offering distance education programs should be charged with informing students of changing refund policies, educational prerequisites, and licensure requirements applicable in each State in which enrolled students reside. The Department appears to be asking each institution of higher education to ascertain the specific legal and policy requirements of each State in which enrolled students reside, to do so on a continual basis so as to assure accuracy of the information, and to make such information available in the form (and content?) required by the Secretary. This will lead to massive redundancy of effort at unreasonable cost to our institutions. We question why the Department does not simply publish this information in one location and take responsibility for advising the public of changes in State requirements. Institutions could then point students to the availability of this information from the Department. The alternative is to have each institution separately research each State’s requirements for refund policies and educational prerequisites for professional licensure or certification for occupations that are the subject of State laws. This proposal clearly runs counter to the Department’s stated interest in reducing the burden of federal regulation.

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3. We request clarification as to what the Department means by “a determination with respect to

certification or licensure prerequisites.” Does this mean a determination by the institution as to whether a program adequately prepares students to meet certification or licensure prerequisites specifically enumerated in the laws of States where enrolled and prospective students reside? If an institution with a graduate program in education advises prospective students that the program prepares them to become teachers, but the institution does not undertake to research whether the program meets specific prerequisites for licensing of teachers in a given State, can we fairly presume the institution has not “made a determination” for purposes of the proposed rule (in which case, pursuant to Section 668.50(b)(7)(iii), we would need to provide public disclosure of the fact that we have not made such a determination)?

4. With respect to the individualized disclosure requirements under Section 668.50(c), are we correct in understanding that subparagraph (i) and subparagraph (ii)(B) only apply if an institution has made such a determination? If the institution makes no determination (i.e., it makes no definitive judgment as to whether the program meets specific requirements in each State for licensure or certification), this would seem to avoid any disclosure obligation under Section 668.50(c)(i) and (ii)(B).

5. Regarding Section 668.50(c)(ii)(A), which requires direct, individual disclosure to each enrolled and prospective student of any adverse action initiated by a State or accrediting agency related to educational programs offered by the institution solely through distance education or correspondence courses within 30 days of the institution becoming aware of such action, we question why it is not sufficient to cover disclosure of such adverse actions under the public disclosure framework of Section 668.50(b)(4) and (5).

6. We request clarification as to the use in Section 668.50 of the term “adverse action” as applied to actions a State entity has initiated. The term “adverse action” as defined in 34 CFR § 602.3 applies to actions of accrediting agencies, not those of States. We also request clarification as to the references in Section 668.50 to accrediting agencies and States “initiating” adverse actions, as opposed to taking adverse actions. Does the Department intend by its use of the term “initiate” that institutions are to inform enrolled and prospective students directly and individually within 30 days of the institution becoming aware of the initiation of a proceeding or investigation that might lead to adverse action, even if no adverse action is ultimately taken?

7. We question why Section 668.50(c)(2) requires an institution to demonstrate that enrolled students acknowledge receipt of a direct and individualized disclosure made pursuant to Section 668.50(c)(1)(i), if the institution is otherwise able to demonstrate that it sent the required disclosure. We further ask what action the Department proposes an institution take if it fails to receive such acknowledgment. It seems untenable that institutions should be forced, under penalty of loss of Title IV funding, to obtain acknowledgment from students that they received disclosures, when ultimately whether any such acknowledgment is received depends entirely on whether the students could be prevailed upon (perhaps by recourse to disciplinary action?) to provide it. We recommend removal of this provision.