Listed below are the regulations that go into effect for new or existing programs with students starting on or after July 1, 2024.
The new regs basically state that the program length is limited to the state requirement for licensing if the state has a minimum program length.
Up until July 1st, any existing programs listed on the ECAR can be paid Federal funds using your current program length, which could be up to one and a half times the minimum program length required by the state. Schools may only offer new programs that start and receive federal funds after July 1, 2024, at the approved minimum requirement for licensing by the state.
What does this mean for your institution?
The current regulations allow the institution to use 150% of the program’s minimum state requirement for licensure (or a neighboring state’s minimum hours, if many students work in that state, etc.). After July 1, 2024, many programs will have to be reduced or may no longer be eligible for Title IV funds. Remember, Direct loan funds are eligible for programs between 300 clock hours and 599 clock hours but require an audit proving that the program has been in existence for a year at the shorter program length and have a 70% completion and 70% placement rate. There are some examples of possible impact on funding below.
Example 1: Massage therapy state requirement is 500 clock hours- currently the institution can teach that program, with state and accrediting approval for any number of hours between 600 clock hours and 750 clock hours. That makes the program eligible for both a prorated Pell grant and prorated direct loans. As of July 1, 2024, the program will only be eligible for students enrolled in it prior to that date. Those students can be paid out even after July 1, 2024. New starts after that date will no longer be eligible for any Title IV funds. The new program with less than 600 clock hours will no longer be eligible for Pell and after a 12-month period of being taught without receiving Title IV aid, could be eligible for direct loans if it meets the 70/70 rule.
Example 2: A minimum state requirement for a 600-clock hour program has been approved and currently taught for 900 clock hours (150% of the state licensure requirement) and receiving a full academic year of Pell grant and direct loans. That program will only be approved for 600 clock hours for new starts after 7/01/2024 reducing the aid to a prorated Pell and direct loan amounts.
Example 3: A minimum state requirement for a 900 medical clock hour program was approved for 1350 clock hours, one and a half Pell grants and direct loans could be disbursed: However, new starts after 7/1/24 will only be eligible for one full Pell and direct loans based on 900 clock hours.
- Remember short credit hour programs that are between 300 and 599 clock hours, if currently taught as credit hour, effective 7/1/24 must be clock hour programs to be approved and receive direct loans after being taught for 12 months and meet the 70/70 requirement.
- The final rule clarifies that this applies only to new programs as of July 1, 2024, excludes fully online programs, and does not apply to State requirements for degree granting programs.
- There are additional requirements that all programs show that they meet any required programmatic accreditation and State licensure requirements so that students can obtain employment if the State has them. The final rules gives institutions an option to show that they meet requirements in a State where a student attests, they intend to move, and clarify that programs that lead to provisional licensure or licensure through reciprocity agreements would meet this requirement.
- The institution may use the minimum hours of another state only if the institution documents, with substantiation by a certified public accountant who prepares the institution’s compliance audit report that–
- A majority of students resided in that State while enrolled in the program during the most recently completed award year.
- A majority of students who completed the program in the most recently completed award year were employed in that State.
- The other State is part of the same metropolitan statistical area as the institution’s home State and a majority of students, upon enrollment in the program during the most recently completed award year, stated in writing that they intended to work in that other State and an associate degree isn’t required for entry level or the program isn’t delivered fully by distance education.
Institutional Requirement:
All programs with state license requirements should be reviewed by the institution. If your current program exceeds the minimum requirement for state licensure, you will need a new accrediting agency approval, a new state license, if applicable, for the shorter program, which will have to be added to the E App.
If Fame is your third-party servicer, you must submit state and accrediting approvals for the new program lengths, new program budgets, and new program set up. This is required prior to any disbursements being made on new programs. If you are not on provisional certification (HCM1, HCM2, a new school or recent change of ownership, etc.) fame can pay on the new programs that are at least 600 clock hours, as long as the programs were approved by both the state, accrediting agency, and submitted to ED via the E-App. Of course, it is always safer to wait for final approval so do not wait until July 1st for those new approvals. The earlier the programs are revised and submitted to the state and accrediting agency, the faster the E-App can be submitted for approval of the programs on the ECAR.
Important: Do not remove the longer program but add an estimated end date for when all students will be taught out.
Remember Fame’s eligibility service is available to assist you with the E App.
PROGRAM PARTICIPATION AGREEMENT – GAINFUL EMPLOYMENT
- 668.14 Program Participation Agreements
The Final Rule limits student access and institutional administration of Title IV funds for gainful employment programs based upon program length requirements established by the state – if such requirements exist.
(26) If an educational program offered by the institution on or after July 1, 2024, is required to prepare a student for gainful employment in a recognized occupation, the institution must–
(i) Establish the need for the training for the student to obtain employment in the recognized occupation for which the program prepares the student; and
(ii) Demonstrate a reasonable relationship between the length of the program and the entry level requirements for the recognized occupation for which the program prepares the student by limiting the number of hours in the program to the greater of–
- The required minimum number of clock hours, credit hours, or the equivalent required for training in the recognized occupation for which the program prepares the student, as established by the State in which the institution is located, if the State has established such a requirement or as established by any Federal agency; or
- Another State’s required minimum number of clock hours, credit hours, or the equivalent required for training in the recognized occupation for which the program prepares the student, if the institution documents, with substantiation by a certified public accountant who prepares the institution’s compliance audit report as required under § 668.23 that–
- A majority of students resided in that State while enrolled in the program during the most recently completed award year.
- A majority of students who completed the program in the most recently completed award year were employed in that State; or
- The other State is part of the same metropolitan statistical area as the institution’s home State and a majority of students, upon enrollment in the program during the most recently completed award year, stated in writing that they intended to work in that other State; and
(iii) Notwithstanding paragraph (a)(26)(ii) of this section, the program length limitation does not apply for occupations where the State entry level requirements include the completion of an associate or higher-level degree; or where the program is delivered entirely through distance education or correspondence courses.
PROGRAM PARTICIPATION AGREEMENT – DISTANCE EDUCATION
- 668.14 Program Participation Agreements
(32) In each State in which: the institution is located; students enrolled by the institution in distance education or correspondence courses are located, as determined at the time of initial enrollment in accordance with 34 CFR 600.9(c)(2); or for the purposes of paragraphs (b)(32)(i) and (ii) of this section, each student who enrolls in a program on or after July 1, 2024,and attests that they intend to seek employment, the institution must determine that each program eligible for title IV, HEA program funds—
- Is programmatically accredited if the State or a Federal agency requires such accreditation, including as a condition for employment in the occupation for which the program prepares the student, or is programmatically pre-accredited when programmatic pre-accreditation is sufficient according to the State or Federal agency;
- Satisfies the applicable educational requirements for professional licensure or certification requirements in the State so that a student who enrolls in the program, and seeks employment in that State after completing the program, qualifies to take any licensure or certification exam that is needed for the student to practice or find employment in an occupation that the program prepares students to enter; and
- Complies with all State laws related to closure, including record retention, teach-out plans or agreements, and tuition recovery funds or surety bonds;(iii) Notwithstanding paragraph (a)(26)(ii) of this section, the program length limitation does not apply for occupations where the State entry level requirements include the completion of an associate or higher-level degree; or where the program is delivered entirely through distance education or correspondence courses.
