Notice Inviting Postsecondary Educational Institutions To Participate in Experiments Under the Experimental Sites Initiative; Federal Student Financial Assistance Programs Under Title IV of the Higher Education Act of 1965, as Amended, 62047-62053 [2015-26239]

Agencies

• DEPARTMENT OF EDUCATION

[Federal Register Volume 80, Number 199 (Thursday, October 15, 2015)]
[Notices]
[Pages 62047-62053]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-26239]



[[Page 62047]]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF EDUCATION


Notice Inviting Postsecondary Educational Institutions To 
Participate in Experiments Under the Experimental Sites Initiative; 
Federal Student Financial Assistance Programs Under Title IV of the 
Higher Education Act of 1965, as Amended

AGENCY: Office of Postsecondary Education, Department of Education.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: The Secretary invites postsecondary educational institutions 
(institutions) that participate in the student financial assistance 
programs authorized under title IV of the Higher Education Act of 1965, 
as amended (HEA), to apply to participate in a new institutionally 
based experiment under the Experimental Sites Initiative (ESI). Under 
the ESI, the Secretary has authority to grant waivers from certain 
title IV, HEA statutory or regulatory requirements to allow a limited 
number of institutions to participate in experiments to test 
alternative methods for administering the title IV, HEA programs. The 
alternative methods of title IV, HEA program administration that the 
Secretary is permitting under the ESI are designed to facilitate 
efforts by institutions to test certain innovative practices aimed at 
improving student outcomes and the delivery of services.

The Experiment

    The Educational Quality through Innovative Partnerships (EQUIP) 
experiment is intended to encourage increased innovation in higher 
education through partnerships between the participating institutions 
and non-traditional providers in order to learn whether those 
partnerships increase access to innovative and effective educational 
programs, particularly for students from low-income backgrounds; assess 
quality assurance processes appropriate for non-traditional providers 
and programs; and identify ways to protect students and taxpayers from 
risk in this emerging area of post-secondary education. Under this 
experiment, participating title IV-eligible postsecondary institutions 
will be provided a waiver to allow them to provide some types of 
Federal student aid under the title IV, HEA programs (title IV aid) to 
otherwise eligible students who are pursuing a program of study offered 
by the institution where 50 percent or more of the educational program 
is provided by one or more entities that are not traditionally eligible 
to participate in the title IV programs (non-traditional providers), 
through a contractual agreement with the participating institution. A 
requirement of these partnerships between the participating institution 
and the non-traditional provider is that the educational program must 
have been approved by a quality assurance entity (QAE), engaged by the 
institution, that has expertise and capacity as described in this 
notice.

DATES: Letters of interest to participate in the proposed experiment 
described in this notice must be received by the Department no later 
than December 14, 2015 in order for an institution to ensure that it is 
considered for participation in the experiment. Institutions submitting 
letters that are received after December 14, 2015 may still be 
considered for participation, at the discretion of the Secretary.

ADDRESSES: Letters of interest must be submitted by electronic mail to 
the following email address: experimentalsites@ed.gov. For formats and 
other required information, see ``Instructions for Submitting Letters 
of Interest'' under SUPPLEMENTARY INFORMATION.

FOR FURTHER INFORMATION CONTACT: Warren Farr, U.S. Department of 
Education, Federal Student Aid, 830 First Street NE., Washington, DC 
20002. Telephone: (202) 377-4380 or by email at: Warren.Farr@ed.gov.
    If you use a telecommunications device for the deaf (TDD) or a text 
telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-
800-877-8339.

SUPPLEMENTARY INFORMATION:
    Instructions for Submitting Letters of Interest: Letters of 
interest must be submitted as a PDF attachment to an email message sent 
to the email address provided in the ADDRESSES section of this notice. 
The subject line of the email should read ``ESI 2015--Educational 
Quality through Innovative Partnerships (EQUIP).'' The text of the 
email should include the name and address of the institution.
    The letter of interest must include the institution's official name 
and Department of Education Office of Postsecondary Education 
Identification (OPEID) number, as well as the name, mailing address, 
email address, FAX number, and telephone number of a contact person at 
the institution. Additional details on the application process 
requirements are provided in the ``Application and Selection'' section 
in this notice.
    The letter of interest should be on institutional letterhead and 
should be signed by at least two officials of the institution. One of 
these officials should be the institution's financial aid 
administrator, and the other should be an academic official of the 
institution.
    Content of the Letter of Interest: The letter of interest should 
include a brief description of the educational program or programs that 
the institution is considering for inclusion in this experiment. For 
each of those programs, we are interested in information such as the 
name(s) of the non-traditional provider(s) with whom the institution 
intends to partner, an estimate of the number of title IV-eligible 
students who will be enrolled in the program, and the name of the QAE 
to be engaged, if known. The letter should indicate which of the 
following two title IV student aid program options the institution will 
choose (in all cases providing title IV aid only to otherwise eligible 
students): (1) Allowing students to be eligible for Pell Grants only; 
or (2) allowing students to be eligible for Pell Grants, undergraduate 
Direct Subsidized Loans and Direct Unsubsidized Loans, and the Campus-
Based Programs. Direct PLUS Loans for parents and graduate students and 
Direct Unsubsidized Loans for graduate students are not included in 
this experiment. See ``Application for Pell Grants Alone or for Pell 
Grants and Certain Other Title IV Aid'' below for further information. 
The Department understands that the specific components of the actual 
programs developed may vary from the information submitted in the 
letter of interest.
    Background: The landscape for learning in postsecondary education 
is undergoing tremendous development. Innovations in technology, 
pedagogy, and business models are driving rapid change. While much of 
this development has been led by traditional postsecondary 
institutions, there are also significant educational changes occurring 
outside of the traditional educational sector. Non-traditional 
providers have begun to offer educational opportunities to students in 
new ways, such as through intensive short-term programs, online or 
blended approaches, or personalized/adaptive learning. These 
opportunities have the potential to advance goals such as increased 
equity and access, more flexible and personalized learning, high-
quality student outcomes, and reduced costs.
    Although some of these educational opportunities show promise in 
advancing these priorities, they remain out of reach for many students, 
particularly those from low-income backgrounds, in part because they 
generally do not provide students with

[[Page 62048]]

access to title IV aid. The unavailability of title IV aid could 
increase the potential for educational inequity, because only those 
students with significant financial resources are able to enroll in 
these innovative programs, and it may constrain the growth of promising 
new approaches to learning.
    Moreover, many of these non-traditional providers and educational 
opportunities are not subject to review by the traditional 
postsecondary accrediting agencies that historically have held the 
primary responsibility for ensuring academic quality in higher 
education. Since the purview of those accrediting agencies typically 
does not extend to non-traditional providers, these new providers lack 
the broadly recognized mechanisms for ensuring quality that are 
required for the Department to make title IV aid available. The lack of 
those structures may also reduce opportunities for external review and 
sharing of best practices in general that traditional accreditation can 
offer.
    In general, under the Department's regulations, an eligible 
institution may enter into a contractual agreement with an institution 
or organization that is not eligible to participate in the title IV 
programs, under which the ineligible institution or organization 
provides part of an educational program of study. However, the 
regulations provide that the ineligible institution or organization 
cannot provide 50 percent or more of the title IV eligible educational 
program. The experiment outlined in this notice will allow 
participating institutions to provide title IV aid to otherwise 
eligible students pursuing a program of study for which 50 percent or 
more of the content and instruction is provided by one or more title 
IV-ineligible organizations (non-traditional providers). As part of the 
experiment, the Secretary will provide participating institutions with 
certain statutory and regulatory waivers, which are listed in the 
section of this notice titled ``Waivers.''
    The experiment is intended to encourage increased innovation in 
higher education through partnerships between the participating 
institutions and non-traditional providers. In doing so, the Department 
hopes to:
     Learn whether permitting partnerships between institutions 
and non-traditional providers increases equity by providing access to 
innovative educational programs for students from diverse backgrounds, 
particularly those from low-income backgrounds;
     Examine student outcomes to evaluate the effectiveness of 
these non-traditional providers;
     Assess quality-assurance processes that are appropriate 
for non-traditional providers and the programs they offer; and
     Identify ways to protect students and taxpayers from risks 
in an innovative and emerging area of postsecondary education.
    The experiment is intended to focus predominantly on low-cost, 
short-term programs serving students who do not yet have an 
undergraduate degree.

The Experiment

    Background: The regulations in 34 CFR 668.8(a) require that an 
eligible program be provided by an eligible institution. The 
regulations in 34 CFR 668.5(c) provide, with certain exceptions, that 
an eligible institution may enter into a contractual agreement with an 
ineligible institution or organization under which the ineligible 
organization provides part of the educational program of study to 
students enrolled at the eligible institution. However, the ineligible 
institution or organization cannot provide 50 percent or more of the 
eligible educational program. In addition, if the amount of the 
educational program provided by the ineligible institution or 
organization is more than 25 percent but less than 50 percent, the 
ineligible institution or organization and the eligible institution 
cannot be owned or controlled by the same individual, partnership, or 
corporation. Finally, the regulations provide that the eligible 
institution's recognized accrediting agency must determine and confirm 
in writing that the agreement meets its standards for contracting out 
education services. Other restrictions apply as well.
    Title I, part A of the HEA and federal regulations describe other 
conditions for an institution and its educational programs to be 
eligible for title IV aid. In general, for an educational program to be 
title IV-eligible, it must be included in the accreditation of the 
institution by the institution's recognized accrediting agency and in 
the institution's legal authorization to provide an educational program 
beyond secondary education in the State in which the institution is 
located. In addition, the program must prepare students for gainful 
employment in a recognized occupation as described in Department 
regulations, except if it is offered by a public or non-profit 
institution and either leads to a degree or is at least a two-year 
program acceptable at the institution for full credit towards a degree. 
In general, under section 481(b)(1)(A) of the HEA and 34 CFR 668.8(d), 
title IV-eligible programs must be at least 15 weeks in duration and 
provide at least 600 clock hours, 16 semester or trimester hours, or 24 
quarter hours of academic credit. These statutes and regulations play a 
critical role in protecting students and taxpayers from abuse by low-
quality higher education programs.
    Under current regulations, institutions are prevented from building 
partnerships to create programs of study comprised of content and 
instruction provided largely by one or more non-traditional providers. 
In some cases, an institution may believe it has identified a non-
traditional provider whose expertise or approach complements that of 
the institution and could work effectively with particular student 
populations or toward desired student outcomes. These limitations on 
partnerships could constrain innovation and make high-quality 
educational opportunities offered by non-traditional providers 
accessible only to students who do not need title IV aid.
    In accordance with the waiver authority granted to the Secretary 
under section 487A(b) of the HEA, the Secretary will waive for this 
experiment the restriction on providing title IV aid to students 
enrolled in programs that an eligible institution offers through 
partnerships with title IV-ineligible entities (non-traditional 
providers) that, with oversight, are delivered to students primarily by 
those non-traditional providers. Through this and other waivers 
described in this notice, this experiment will examine whether 
extending eligibility for title IV aid to non-traditional postsecondary 
programs offered through these partnerships increases access to high-
quality academic programs for students from a diversity of backgrounds, 
particularly students from low-income backgrounds. In addition, the 
experiment will examine student outcomes at these promising non-
traditional providers to determine whether they are effective. The 
experiment will also examine whether the waivers create any challenges 
or obstacles to an institution's administration of the title IV, HEA 
programs.
    Description: The Secretary will grant institutions participating in 
this experiment limited waivers of statutory and regulatory 
requirements in order to support innovative educational programs 
developed through partnerships between title IV-eligible institutions 
and non-traditional providers. Specifically, through this experiment 
the Secretary will waive the provision of 34 CFR 668.5(c)(3) that 
provides that an ineligible entity may not provide 50 percent or more 
of a title

[[Page 62049]]

IV-eligible educational program. The Secretary will also waive the 
requirement under 34 CFR 668.8(a) that an eligible program must be 
provided by a participating institution.
    In order for an institution to provide title IV aid to students in 
a program that is provided primarily by one or more non-traditional 
providers under the experiment, the Department will require that, in 
addition to being included in the institution's recognized 
accreditation, the program must be reviewed, approved, and monitored by 
an independent quality assurance entity (QAE) that is appropriately 
qualified to review and monitor such programs. These requirements are 
further described later in this notice.
    The Secretary will also waive or modify the following statutory and 
regulatory provisions that might otherwise limit participation in 
flexible, high-quality programs of study offered through contractual 
agreements between postsecondary institutions and non-traditional 
providers. To participate in the experiment, an applicant institution 
must use at least one of the waivers in this experiment but need not 
use all of them.
     Minimum Program Length: The Secretary will waive the 
requirement that a title IV-eligible program must include at least 15 
weeks of instructional time and at least 600 clock hours, 16 semester 
or trimester hours, or 24 quarter hours. The Secretary will allow title 
IV aid to be received by otherwise eligible students who are enrolled 
in a program of at least eight weeks in length that, at a minimum, 
includes at least 12 semester or trimester hours, 18 quarter hours, or 
450 clock hours. The normal proration requirements for each title IV 
aid program apply. The Department's definition of ``credit hour'' in 34 
CFR 600.2 applies to credit hour programs offered under the experiment.
     Satisfactory Academic Progress (SAP): Through this 
experiment, the Secretary will modify the requirements for monitoring a 
title IV aid recipient's SAP. An institution will be required to 
evaluate a student's SAP upon the student's completion of each of the 
program's academic years, as measured in weeks of instructional time, 
though an institution will be permitted and is encouraged to evaluate a 
student's SAP more frequently. For programs that are less than one 
academic year in length, the institution will be required to evaluate a 
student's SAP upon the completion of each payment period. Institutions 
will not be required to determine the student's SAP pace by dividing 
the number of hours the student has completed by the number of hours 
the student has attempted. Instead, the institution will determine 
whether the student has completed sufficient credit hours, clock hours, 
or the equivalent to complete the program within the maximum timeframe 
(no more than 150 percent of the program's published length), as 
provided in the definition of ``maximum timeframe'' in the regulations 
in 34 CFR 668.34(b), as of the point in time when the institution 
conducts the evaluation of a student's pace.
    Additionally, under this experiment, if the institution accepts any 
transfer credit to meet the requirements of a student's program, it 
may, but is not required to, prorate the student's maximum timeframe 
based on the remaining amount of the program after the transfer credit 
has been applied.
    Application for Pell Grants Alone or for Pell Grants and Certain 
Other Title IV Aid: The costs of postsecondary programs where all or a 
portion of the program is provided by non-traditional providers vary 
widely; for some programs, Pell Grants alone might cover direct costs 
(tuition, fees, books, and supplies), while others may require a 
combination of Pell Grants and loans to cover those costs. Some 
programs may wish to focus solely on Pell Grant-eligible students. 
While this experiment aims to focus primarily on low-cost programs, it 
may also seek to learn from programs that may have a range of costs. 
Institutions must choose one of two title IV student aid program 
options: (1) Allowing students to be eligible for Pell Grants only, or 
(2) allowing students to be eligible for Pell Grants, undergraduate 
Direct Subsidized Loans and Direct Unsubsidized Loans, and the Campus-
Based Programs. Direct PLUS Loans for parents and graduate students and 
Direct Unsubsidized Loans for graduate students are not included in 
this experiment. Existing statutory and regulatory awarding 
requirements for the Campus-Based Programs are not changed under this 
experiment. For an institution choosing to provide only Pell Grants, 
any title IV aid recipients enrolled in the program must be Pell-grant 
eligible and be advised before enrollment that their title IV aid 
awards will be limited to Pell Grants. Similarly, for an institution 
choosing to provide Pell and the other title IV aid available in this 
experiment, any title IV aid recipients enrolled in the program must be 
otherwise eligible for that title IV aid and must be advised before 
enrollment of the limitations on their title IV aid eligibility for the 
program. Additional requirements for student protections will also be 
in place for institutions choosing to utilize title IV aid in addition 
to Pell Grants in the experiment (see ``Requirements for 
Participation'').
    Requirements for Participation: The Department intends to select a 
limited number of institutions to participate in this experiment. Each 
institution will curate a program of study comprised of educational 
programming that may be provided by one or more non-traditional 
providers. The Department intends to select some institutions that will 
make only Pell Grant funding available to otherwise eligible students 
enrolled in the program, and some institutions that will make Pell 
Grant funding and certain other types of title IV aid program funding 
available to otherwise eligible students enrolled in the program as 
described elsewhere in this notice.
    An institution participating in this experiment will be required to 
do the following:
     Program design: Create one or more coherent programs of 
study by curating educational content from one or more non-traditional 
providers of postsecondary education that are not currently 
participating in the title IV, HEA programs. At least 50 percent, and 
up to 100 percent, of the program's content and instruction must be 
provided by one or more non-traditional providers through a contractual 
arrangement with the participating institution. The institution must 
award a certificate, degree, or other recognized credential to students 
who successfully complete the program, and the certificate, degree, or 
credential must have externally validated value in the workforce, for 
academic transfer, or both. The program must meet applicable title I, 
HEA requirements, including that the program must prepare students for 
gainful employment in a recognized occupation as described in 
Department regulations, unless it is offered by a public or private 
non-profit institution and either leads to a degree or is at least two 
years in length and acceptable for full credit towards a degree at the 
institution. The certificate, degree, or credential resulting from the 
program must represent the equivalent of at least 12 semester or 
trimester hours, 18 quarter hours, or 450 clock hours over a minimum of 
eight weeks. An institution's contractual agreement with a non-
traditional provider must stipulate that the non-traditional provider 
agrees to provide information to the institution necessary for the 
institution to carry out its duties related to the administration of 
title IV aid. Upon request, the institution will provide evidence 
regarding its

[[Page 62050]]

compliance with the terms of the experiment. Contractual agreements 
under which a non-traditional provider provides 50 percent or more of 
the instruction in a program must be reviewed and approved by the 
participating institution's accrediting agency.
     Quality assurance: Identify a QAE with the capacity to 
review, monitor, and report on the proposed program and ensure the 
quality of the providers and their program components as outlined in 
this notice under ``Quality Assurance Questions and QAE Role.'' The 
institution must demonstrate that the QAE is an independent 
organization that is free from conflicts of interest with the 
institution and the non-traditional providers.
     Accreditor review: Submit the program created in 
collaboration with one or more non-traditional providers to the 
applicant institution's recognized institutional accrediting agency for 
consideration for inclusion in the institution's existing 
accreditation. The program must fall within the accreditor's scope of 
recognition, and the eligible institution must obtain a determination 
from its accrediting agency that the institution's arrangement meets 
the standards and procedures the agency considers appropriate. The 
Department is not requiring the accrediting agency to provide specific 
program approval.
     Disclosure: Clearly disclose to prospective students 
information about the experimental nature of the programs, the 
possibility of termination of the programs, and how a teach-out to 
provide the remainder of the program will be conducted should a program 
or the relationship with the non-traditional provider(s) be terminated.
     Title IV disbursement: Only disburse title IV aid to 
otherwise eligible students under the option chosen by the institution.
     Consequences of low quality: Take immediate action to 
improve, suspend, or terminate programs or non-traditional providers 
that the Department, the QAE, the accreditor, or the institution 
determines are not meeting the quality standards established by the 
QAE. In the event that a program is suspended or terminated, a teach-
out plan, as generally defined under 34 CFR 600.2, must be developed to 
provide the remainder of the program by the institution, or for the 
provision of the remainder of the program by another title IV-eligible 
institution, at no additional cost to students.
     Protections for students and taxpayers: For those programs 
in which students will have access to Federal student loans in addition 
to Pell Grants, submit detailed plans describing how students and 
taxpayers will be protected in cases where programs are suspended, 
terminated, or otherwise limited in their participation in the 
experiment by the Department, the QAE, the accreditor, or the 
institution, for any reason, including poor student outcomes and low 
quality. Institutions will be required to describe in detail what 
actions they will take, such as loan repayments and refunds to students 
(in addition to what is normally required of them under the existing 
title IV, HEA program regulations), and the conditions under which they 
will take these actions. In its review of experimental site 
applications that would allow access to both Pell Grants and other 
title IV aid programs, the Department will give preference to those 
applications that offer the strongest student and taxpayer protections.
    The Department will monitor programs based on regular reports from 
the institution and the QAE, along with any data available to the 
Secretary, including information provided by the accreditor, students, 
or others regarding the performance of the participating entities, 
student enrollment, and student outcomes. Based on this information, 
the Department may take a number of actions, including removal of the 
institution from the experiment and any enforcement actions authorized 
by the HEA.

Quality Assurance Questions and QAE Role

    As part of this experiment, the Department is interested in 
understanding how a QAE will determine the quality of a program of 
study through a set of largely outcome-based questions, rigorous and 
timely monitoring, and accountability processes.
    While the Department continues to refine this set of quality 
assurance questions, participating institutions must ensure that the 
QAE in this experiment has established a thorough quality assurance 
process that defines and monitors outcome-based standards for the 
numbered questions below. Draft questions are included here to provide 
an overview; the final set of questions will be provided to applicants 
in Phase Two of the application process.

A. Claims for Learning

    1. What measurable claims is the institution making about the 
learning outcomes of students participating in the program? For 
example:
     What is the evidence that the learning claims are 
commensurate with postsecondary- or post-baccalaureate-level work?
     Do the institution's statements about student outcomes 
capture requisite knowledge and skills? How?
    2. How are the value and relevance of those claims established? For 
example, what external stakeholders have been consulted to verify the 
value and relevance of the claims?
    3. How will the claims be measured?
    4. How will institutions be held accountable for meeting those 
claims?
    5. How do all the claims for learning come together into a 
meaningful and coherent set of overall program outcomes and goals?

B. Assessments and Student Work

    1. How does the institution assess whether students enrolled in the 
program can meet the claims outlined in Section A? For example:
     How are assessments aligned with the specific tasks, 
expectations, and contexts for which programs claim to be preparing 
students?
     Beyond one-time assessments, is student work reviewed as 
part of the assessment of student learning and program outcomes? Do 
external stakeholders review students' work? How are examples of 
student work made available to outside parties (with appropriate 
privacy and other protections)?
    2. How has the reliability of these assessments been established?
    3. How has the validity of these assessments been established, for 
example, in terms of the following?
     Face validity: Does the assessment appear to measure what 
it says it measures?
     Content validity: Does the assessment accurately measure 
the knowledge and skills covered by the program?
     Predictive validity: Does the assessment accurately 
predict the student's ability to demonstrate a given competency in the 
future?
     Concurrent validity: Does the assessment correlate with 
other measures of the desired performance meant to be assessed?
    4. How and how often does the QAE review these assessments?

C. Outputs, Which, Where Applicable, Must Be Disaggregated To Show 
Outcomes Specifically for Low-Income Students

    1. How are students performing on program assessments?
    2. How are students progressing through the program? For example:
     Retention rate?
     Withdrawal rate?

[[Page 62051]]

     Average time to completion?
     Completion rate (within 100 percent and 150 percent of 
expected time)?
    3. What are the actual program outcomes for students (e.g., entry 
into subsequent phase of study, career, etc.)? For example:
     Employment outcomes, for all programs that have a stated 
mission focused on employment (include method for how these outcomes 
are measured):
     Job placement rates in field of study?
     Average length of time between completion of program and 
employment in field of study?
     Job retention rates?
     Median starting salaries?
     Transfer rates to other academic or vocational programs, 
where applicable.
     Certifications and licensure exam passage rates, where 
applicable.
    4. What are the following ratios for the program, where relevant?
     Published tuition and fees versus earnings.
     Average net price versus earnings.
     Median student debt versus earnings.
    5. How does the program rate on measures of student satisfaction? 
For example, how does the program rate in the following:
     Comments from students about what made them successful or 
unsuccessful in the program?
     A rigorous and transparent methodology for gathering and 
synthesizing customer satisfaction measures?

D. Management

    1. How has the stability of the non-traditional provider(s) been 
evaluated (e.g., longevity and past outcomes, leadership/board, etc.)?
    2. How are privacy, security, and student authentication managed?
    3. Are activities related to student recruitment appropriate and 
transparent?
    4. How is pricing made transparent?
    5. Are all materials accessible to learners with disabilities?
    6. What is the process for continuous improvement of all aspects of 
the learning experience (content, platform, student support, faculty 
engagement, etc.)?
    Based on the standards developed by the QAE, the QAE must establish 
a rigorous and timely process to assess the program before students are 
enrolled, monitor and report on an approved program's performance, and 
take action based on the program's performance. The institution must 
require the QAE to perform the following functions:
     Develop a process to review the proposed program, 
including its components and providers, based on clear, specific, and 
measurable standards consistent with the questions listed above, among 
others.
     Monitor the proposed program, including its components and 
providers, to confirm the program is being implemented and assessed as 
proposed, and to confirm the achievement of provider claims for 
learning and student outcomes; and have a written policy that outlines 
timely and significant consequences for lack of performance. If groups 
of students enroll in a program at distinct and regularly scheduled 
points in time, monitoring must be conducted, at a minimum, at four 
points in time: An early stage in the program to identify early warning 
signs of issues related to implementation, quality, or management; the 
midpoint of a program in order to have sufficient time to correct 
potential problems that have been identified; at the completion of a 
program; and at a pre-determined time period after completion of the 
program (e.g., six months) to monitor post-completion outcomes for 
participants. If students do not enroll in this manner and a program is 
instead offered on a ``rolling'' basis, monitoring must be conducted at 
regular intervals that represent the average time it takes a student to 
reach an early stage, the midpoint, the completion of the program, and 
some pre-determined time period after completion.
     Report on the performance of the non-traditional providers 
to the institution, accreditor, and the Department every six months, as 
well as at any time the QAE identifies program quality concerns or 
determines that the program is at risk of or subject to any adverse 
action.
    This notice refers to a single QAE for each participating 
institution because the Department believes it is important to have a 
single organization ultimately responsible for affirming the quality of 
a program and taking action based on its assessment. However, given the 
range and depth of expertise and knowledge required for the quality 
assurance process, we expect that some applicants may wish to have two 
or more organizations working together to fulfill the requirements of 
this role. Subcontracts for specific portions of the role would be 
acceptable as long as one organization is clearly designated as having 
the lead role and final responsibility for quality determination and 
consequences, and the respective roles and responsibilities of the 
organizations are clearly delineated along with the means of 
coordination among all the partners. QAEs could be any of a number of 
kinds of organizations, including employer associations, new entities 
created for this specific purpose, existing accreditors (as long as the 
proposed quality assurance process is new, meets the stated 
requirements, and does not create conflicts of interest), accounting 
firms, or others.
    Waivers: Institutions selected for this experiment will be granted 
waivers of any or all of the following statutory and regulatory 
provisions. As mentioned earlier under ``Application for Pell Grants 
Alone or for Pell Grants and Certain Other Title IV Aid,'' each 
institution will need to choose between two options: (1) Allowing 
students to be eligible for Pell Grants only; or (2) allowing students 
to be eligible for Pell Grants, undergraduate Direct Subsidized Loans 
and Direct Unsubsidized Loans, and the Campus-Based Programs. Direct 
PLUS Loans for parents and graduate students and Direct Unsubsidized 
Loans for graduate students are not included in this experiment.
    To participate in the experiment, an applicant institution must use 
at least one of the waivers in this experiment but need not use all of 
them.
     34 CFR 668.8(a), to the extent that the regulation 
requires that an eligible program be provided by the participating 
institution.
     34 CFR 668.5(c)(3), to the extent that the regulation 
restricts the amount of an eligible program that may be provided by an 
ineligible institution or organization. Notwithstanding this waiver, 
the eligible institution must provide documentation from its 
accrediting agency confirming that the accrediting agency considers the 
program within its accreditation of the eligible institution. The 
waiver does not apply to the prohibition on the eligible institution 
and the ineligible institution or organization (non-traditional 
provider) being owned or controlled by the same individual, 
partnership, or corporation.\1\
---------------------------------------------------------------------------

    \1\ If the non-traditional provider provides any services that 
would qualify it as a third-party servicer, the institution should 
notify the Department and disclose this information in its letter of 
interest and in its application.
---------------------------------------------------------------------------

     Section 481(b)(1)(A) of the HEA and 34 CFR 668.8(d)(1)(i) 
and (ii), which establish minimum timeframes for non-degree programs 
and programs offered by proprietary and postsecondary vocational 
institutions. Under the experiment the program may be no less than 12 
semester or trimester credit hours, 18 quarter hours, or 450 clock 
hours, all offered over a minimum of eight weeks.

[[Page 62052]]

     Section 484(c) of the HEA and 34 CFR 668.34(a)(3)(ii), 
(a)(5)(ii), and (b), to the extent these provisions relate to the 
timeframe when the institution must determine whether a student is 
making satisfactory academic progress and to the method by which an 
institution must calculate the pace of a student's academic 
progression.
    All other provisions and regulations of the title IV, HEA programs 
will apply to institutions participating in this experiment.
    Reporting and Evaluation: With this experiment, the Department is 
interested in evaluating three main areas: (1) The extent to which new 
programs provide access for students from low-income backgrounds to 
high-quality postsecondary education and training programs; (2) whether 
the partnerships between participating institutions and non-traditional 
providers provide low-cost and high-value postsecondary education and 
training programs that produce strong student outcomes; and (3) how 
innovative and effective processes are developed to assure the quality 
of these types of programs and protect students and taxpayers. 
Accordingly, institutions will be asked to provide information to 
support the Department's evaluation of the experiment.
    Institutions that are selected for participation in the experiment 
will likely be required to provide the Department with identifying 
information for students who have enrolled in one of the programs 
included in the experiment and who submitted a Free Application for 
Federal Student Aid (FAFSA). Additional information may also be 
required about students who could serve as a comparison group for 
benchmarking purposes, for example, similar students not enrolled in 
programs included in the experiment.
    In addition, participating institutions will be required to submit 
reports and/or participate in surveys, interviews, or site visits to 
provide information about the implementation of the experiment. 
Institutions will likely be asked to provide information on courses and 
programs offered, numbers and types of degrees and/or certificates 
awarded, numbers and types of students served, their experiences in the 
program, their outcomes after leaving the program (such as employment 
status, earnings, credits transferred), provider expenditures per 
student, and information on the cost of the programs and the amounts 
borrowed by students attending the programs. Institutions will also be 
required to provide information on how they partnered with the non-
traditional providers and the QAEs, the quality assurance process, and 
any challenges experienced and how those challenges were addressed.
    The specific evaluation and reporting requirements will be 
finalized prior to the start of this experiment.
    Application and Selection: From the institutions that submit 
letters of interest and full applications, the Secretary will select a 
limited number to participate in the experiment. Applications will be 
evaluated on five criteria:
    (1) The extent to which the proposed activities are innovative and 
will produce high-quality programs likely to lead to positive student 
learning and employment outcomes, and for programs focused on student 
learning outcomes, the Department will give preference to programs that 
either lead to a degree or demonstrate evidence of transferability of 
academic credit;
    (2) The extent to which programs will provide equitable access to 
innovative postsecondary education programs, particularly for students 
from low-income backgrounds;
    (3) The extent to which the proposed quality assurance processes 
have the potential to address the types of quality assurance questions 
outlined in this notice;
    (4) The extent to which the programs are affordable; and
    (5) For programs in which students will have access to Federal 
student loans, the strength of proposed student and taxpayer 
protections.
    The Secretary will also consider institutional diversity in, among 
other characteristics, institutional type and control, geographic 
location, enrollment size, and title IV, HEA program participation 
levels.
    Institutions selected to participate in the experiment must have a 
strong track record with regard to student outcomes, especially in 
serving students from low-income backgrounds. When selecting 
institutions, the Secretary will consider not only the information in 
the institution's application, including the information provided about 
the QAEs and non-traditional providers that would provide the program 
in whole or in part, but any additional information available to the 
Department including, but not limited to, evidence of title IV, HEA 
program compliance, student completion rates, cohort default rates, 
financial responsibility ratios, gainful employment data, and, for for-
profit institutions, ``90/10'' funding levels. The institution's 
recognized accrediting agency will also need to provide a notice of 
inclusion of the program in the applicant institution's accreditation 
by Phase Three in the application and selection process (described 
below).
    The application and selection process will entail three phases:
    Phase One: The institution will submit a letter of interest to the 
Department, as described above under ``Instructions for Submitting 
Letters of Interest.'' If all of the institutional qualifications for 
participation are met and the Department determines this initial letter 
to be of sufficient quality and alignment with the goals of the 
experiment, the institution will receive an invitation to submit a full 
application.
    Phase Two: Institutions invited to submit a full application will 
be required to submit materials addressing questions in areas such as 
program design, student population, and intended outcomes; provider and 
QAE selection and roles; process for defining, implementing, 
monitoring, and taking appropriate actions based on rigorous quality 
assurance standards; and student supports and protections. Institutions 
will also need to demonstrate the commitment of the non-traditional 
provider(s) to offer content and instruction once required approvals 
are secured, and demonstrate their accrediting agency's agreement to 
consider including the proposed program in the institution's 
accreditation.
    Full applications will be reviewed based on the stated criteria, 
including the preferences described in this notice. On this basis, the 
Secretary will select the institutions to be invited to participate and 
provide those institutions an amendment to the program participation 
agreement (PPA) that must be signed by the institution's authorized 
official and returned to the Department. PPA amendments will reflect 
the specific statutory or regulatory provisions that the Secretary has 
waived or modified for the experiment. The institution must acknowledge 
its commitment to properly administer the experiment by establishing 
any necessary procedures and by coordinating with other institutional 
offices and staff. The PPA amendments will also document the agreement 
between the Secretary and the institution about how the experiment will 
be conducted, including, for institutions intending to disburse title 
IV, HEA aid other than Pell Grants, additional student and taxpayer 
protections.
    Phase Three: After signing its PPA amendment document and receiving 
the Department's countersigned copy, the institution must submit its 
programs to the Department for review and final

[[Page 62053]]

approval through the E-App system, along with documentation that the 
program has been reviewed and approved by the QAE, is included in the 
institution's accreditation and State authorization, and meets all 
other title IV, HEA eligibility requirements. Proposed programs will 
not be eligible for access to title IV aid until the Department's final 
review and approval in Phase Three is complete.
    Accessible Format: Individuals with disabilities can obtain this 
document in an accessible format (e.g., braille, large print, 
audiotape, or compact disc) on request to the contact person listed 
under FOR FURTHER INFORMATION CONTACT.
    Electronic Access to This Document: The official version of this 
document is the document published in the Federal Register. Free 
Internet access to the official edition of the Federal Register and the 
Code of Federal Regulations is available via the Federal Digital System 
at: www.gpo.gov/fdsys. At this site you can view this document, as well 
as all other documents of this Department published in the Federal 
Register, in text or Adobe Portable Document Format (PDF). To use PDF, 
you must have Adobe Acrobat Reader, which is available free at the 
site.
    You may also access documents of the Department published in the 
Federal Register by using the article search feature at: 
www.federalregister.gov. Specifically, through the advanced search 
feature at this site, you can limit your search to documents published 
by the Department.
    Delegation of Authority: The Secretary of Education has delegated 
authority to Jamienne S. Studley, Deputy Under Secretary, to perform 
the functions and duties of the Assistant Secretary for Postsecondary 
Education.

    Program Authority:  20 U.S.C. 1094a(b).

    Dated: October 9, 2015.
Jamienne S. Studley,
Deputy Under Secretary.
[FR Doc. 2015-26239 Filed 10-14-15; 8:45 am]
 BILLING CODE 4000-01-P