The Biden-Harris Administration has announced groundbreaking final regulations aimed at fortifying oversight

Accountability for institutions of higher education while bolstering consumer protections for student borrowers. These rules, set to take effect on July 1, 2024, mark a significant stride towards achieving President Biden’s vision of making college more affordable, holding colleges accountable, and safeguarding the interests of taxpayers and students.

In his statement, U.S. Secretary of Education Miguel Cardona highlighted the pressing need for these regulations, stating, “Too many students have been abandoned by shady colleges that close their doors and leave borrowers with unaffordable debt and little hope of completing their educational journeys and embarking on rewarding careers. With these final rules, the Biden-Harris Administration is fixing a broken system, which failed to protect students and families, and addresses abuses in higher education that have cost taxpayers billions of dollars in recent years. We are raising the bar for accountability and making sure that when students invest in higher education, they get a solid return on that investment and a greater shot at the American dream.”

The final rules target several critical areas, addressing the Department’s concerns about the abrupt closures of colleges, particularly private for-profit institutions. These closures have left students stranded with limited options to complete their education and placed a financial burden on taxpayers. Additionally, the rules aim to enhance career services and financial aid communication while ensuring that students have clarity on the cost of their education.

The key provisions of the final regulations are as follows:                                                          

1. Financial Responsibility: These rules establish warning signs that allow the Department to swiftly secure letters of credit or other financial protections when a college exhibits signs of financial risk, such as debt payment issues, lawsuits by Federal or State actors, or a high cohort default rate. This change will discourage risky behavior and protect taxpayers from the costs of sudden closures.
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3. Administrative Capability: Institutions will be required to provide clearer, more comparable information on financial aid, distinguish between scholarships and loans, and prohibit the withholding of transcripts for federally funded courses. Additionally, they must offer adequate career services and restrict the employment of individuals with a history of mismanagement of Federal student aid programs.
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5. Certification Procedures: These rules establish additional conditions that the Department can place on institutions when they exhibit warning signs. This may include requiring teach-out plans or agreements, limiting the addition of new programs and locations, and ensuring that student aid is only available for career-training programs that meet State certification or licensure requirements.
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7. Ability to Benefit: Clearer processes are established for students without a high school diploma or its equivalent to access Federal aid, thus increasing access to postsecondary education

These final regulations build on the Biden-Harris Administration’s efforts to ensure that colleges are held accountable, students and taxpayers are protected, and education is affordable. Recently, the Department revitalized the gainful employment rule and approved substantial relief for students affected by abrupt college closures. President Biden has also championed significant increases in Pell Grants and proposed tuition-free community college, as well as new tuition assistance at Historically Black Colleges and Universities and Minority-Serving Institutions.

The Department developed these final rules following extensive public feedback on draft rules published in May. The final regulations will be published in the Federal Register on October 31, 2023.

About the U.S. Department of Education

The U.S. Department of Education is dedicated to ensuring equal access to education and promoting educational excellence for all Americans. Its mission is to promote student achievement and preparation for global competitiveness by fostering educational excellence and ensuring equal access.