Originally published in the July 2020 issue of Leaflet

Mandates for Accreditors as of July 1, 2020

In accordance with the Higher Education Act, the U.S. Department of Education (USDE) published new regulations on November 1, 2019, that became effective on July 1, 2020. These regulations include both policy-related and procedural mandates for accreditors. To maintain recognition by the USDE, HLC is required to change a number of policies to align with the new regulations.

At its February 2020 meeting, the HLC Board of Trustees discussed all policy changes necessary to accommodate the USDE mandates. As a result, a number of policy revisions were approved on first reading in February, shared with the membership for comment and were adopted on second reading in June 2020. All policies are available on HLC’s website at hlcommission.org/policies. HLC’s policies, as well as Chapter VI, Title 34 of the Code of Federal Regulations explain all institutional obligations for purposes of accreditation as well as Title IV Eligibility.

Mandates that did not require a policy change but may have required a procedure or glossary change will be updated and posted to HLC’s website in July 2020. HLC intends to ensure that its policies and procedures continue to comply with all applicable regulations and will publish any updated procedures.

Operating Procedures All Agencies/Certain Institutional Agencies Must Have: Teach-Outs

Regulatory Reference: 34 CFR §600.2; 34 CFR §602.23(f)(1); 34 CFR §602.24(c)
HLC Policy Affected: FDCR.B.10.010 Commission Approval of Teach-Out Arrangements

Implications: Effective July 1, 2020, the federal regulations include revised terms and requirements related to Teach Out. The federal definitions and HLC’s corresponding terms are provided below:

Teach out: Federal regulation defines teach out as a process during which a program, institution or institutional location that provides 100% of at least one program engages in an orderly closure or when, following the closure of an institution or campus, another institution provides an opportunity for the students of the closed school to complete their program, regardless of their academic progress at the time of closure.

HLC uses the term teach-out arrangement to refer to all teach outs, whether or not such arrangements require the participation of institutions other than the institution that is planning to close, or to close an additional location offering 100% of at least one program, or to discontinue an academic program before all students have had an opportunity to complete their studies.

Teach-Out Agreement: Federal regulation defines a Teach-Out Agreement as a written agreement between institutions that provides for the equitable treatment of students and a reasonable opportunity for students to complete their program of study if an institution, or an institutional location that provides 100% of at least one program offered, ceases to operate or plans to cease operations before all enrolled students have completed their program of study.

HLC also uses the term Teach-Out Agreement to refer to written agreements that may be made between the institution subject to teach-out requirements and each institution identified in the Provisional Plan (see definition below) as a teach-out receiving institution. The Teach-Out Agreement is a formal, legal agreement with the teach-out receiving institution.

(Teach-Out Agreements are not required of institutions serving exclusively as transfer options for students affected by institutional closures.) Finally, because institutions can teach-out their own students under some Provisional Plans, including prior to discontinuing an academic program, closing an additional location offering 100 percent of at least one program, or closing entirely, Teach-Out Agreements are not a required feature of every teach-out arrangement.

Teach-out plan: Federal regulation defines a teach-out plan as a written plan developed by an institution that provides for the equitable treatment of students if an institution, or an institutional location that provides 100% of at least one program, ceases to operate or plans to cease operations before all enrolled students have completed their program of study.

HLC uses the term Provisional Plan to refer to all teach-out plans. Provisional Plans detail the arrangements an institution makes for students when it intends to cease operating as an educational institution or when other circumstances are present that require a teach-out arrangement. Whether the institution is closing entirely or closing campus(es) or additional location(s), if it has students pursuing academic programs who will not conclude their programs prior to the closure date, then the Provisional Plan will need to include arrangements for teaching out those students so that they can complete their academic programs. If the institution is prepared to stay open, or keep the branch campus(es) or additional location(s) open and if it will continue to have sufficient resources, it may teach out those students that are within one year of graduation and assist other students in transferring to other institutions. If it does not have sufficient resources to accommodate current students through graduation or transfer, it must enlist the assistance of one or more other accredited institutions to serve as a teach-out receiving institution through a Teach-Out Agreement.

HLC uses the term teach-out receiving institution to refer to each institutional signatory to a Teach-Out Agreement that is not the institution required to submit a Provisional Plan. Teach-out receiving institutions are those institutions that agree, at a minimum, by virtue of their participation in the teach out to accept all the credits earned by students affected by the closure, to count those credits toward a reasonably similar certificate or degree from their institution, and to award a certificate or degree to the students participating in the teach out in approximately the same amount of time the students would have needed to complete their studies.

(Note: If an institution wishes to evaluate the credits students have earned through its established policies or through a modified version of those policies, in lieu of signing a Teach-Out Agreement, then it is not a teach-out receiving institution, but rather, a transfer option.)

Finally, because not all institutions required to submit a Provisional Plan are institutions that will close entirely, HLC describes these institutions simply as institutions required to submit a Provisional Plan. The new federal regulations do not appear to have any technical term for such institutions but refers to them (in one instance) as “closing institutions.”

The federal regulations list several new triggers requiring teach-out arrangements including:

• Candidacy, Probation and the issuance of a Show-Cause Order (Show-Cause is already covered in current HLC policy).
• USDE notification to the accreditor that an institution’s independent auditor expressing doubt about the institution’s ability to operate as a going concern or indicating an adverse opinion or finding of material weakness related to the institution’s financial stability.
• USDE notification that the institution is participating in Title IV, HEA programs under a provisional program participation agreement and is required to have a teach-out plan as a condition of participation.
• USDE notification of institution being placed on reimbursement payment method or heightened cash monitoring payment method.
• If an institution notifies the accreditor that an additional location where it offers at least 100 percent of a certificate or degree program is being moved or relocated before all students have completed their program of study and is considered by the USDE to be a closed school.

USDE has also articulated explicit requirements related to teach-out plans. Accreditors must evaluate the teach-out plan to ensure it includes the following:

• A list of currently enrolled students.
• Academic programs offered by the institution that is subject to HLC’s teach-out requirements.
• The names of other accredited institutions “that offer similar programs” and that could potentially enter into a Teach-Out Agreement with the institution that is subject to HLC’s teach-out requirements.

The new regulations also identify additional requirements related to Teach-Out Agreements. Accreditors must require the institution that is subject to the teach-out requirements to include in its Teach-Out Agreement:

• A complete list of currently enrolled student in each program and the program requirements each student has completed.
• A plan to provide all potentially eligible students with information regarding Closed School Discharge, and if applicable, state refund policies.
• A record retention plan.
• Information on the number and types of credits the teach-out receiving institution is willing to accept prior to “the student’s” enrollment (quotes added).
• A clear statement “to students” of tuition and fees of the educational program and the number and types of credits that will be accepted by the teach-out receiving institution (quotes added).

There are also explicit disqualifiers for teach-out receiving institutions. Accreditors must not permit an institution to serve as a teach-out receiving institution if it is under any of the following conditions:

• Is itself subject to any circumstances triggering a Provisional Plan.
• Is under investigation.
• Is subject to a limiting, terminating, suspending action (by the USDE).
• Is being prosecuted for an issue related to academic quality, misrepresentation, fraud or other severe matters by a law enforcement agency.

Additional procedural implications in this critical area are that an accreditor may not approve any Provisional Plan that provides affected students an alternate modality of instruction, unless the original modality of instruction to which they were accustomed is also provided as an option. The Provisional Plan must also not require students to move or travel substantial distances or durations to access their programs or services, although in its commentary the USDE declined to articulate any bright line rule related to what constitutes a “substantial distance or duration.”

Accreditors must require a closing institution to provide copies of all notifications from the institution to the students related to the closure or to teach-out options to ensure the information accurately represents students' ability to transfer credits. Accreditors may require corrections to the notifications.

Finally, the regulations clarify a long-standing allowance that permits teach-out receiving institutions to waive residency requirements for students in the final stages of their academic programs.

Operating Procedures All Agencies/Certain Institutional Agencies Must Have: Definitions

Regulatory Reference: 34 CFR §602.26(b); 34 CFR §602.26(e)
HLC Policy: INST.E.60.010 Denial or Withdrawal of Status, INST.E.30.010 Show-Cause, INST.E.20.010 Probation and INST.E.10.010 Notice (Conforming Change only – no regulatory reference for the Notice change)

Implications: Institutions must disclose sanctions, Show-Cause Orders and any denial or withdrawal of status to constituents (including current and prospective students) no later than seven business days after receiving HLC’s action letter. HLC must publish such decisions no later than one business day after notifying the institution of the Board action.

Notification of Accreditation Decisions

Regulatory Reference: 34 CFR §602.26(f)
HLC Policy: INST.B.30.010 Voluntary Resignation of Accreditation or Candidacy (Formerly, Termination of Affiliation or Accreditation)

Implications: Institutions must disclose sanctions, Show-Cause Orders and any denial or withdrawal of status to constituents (including current and prospective students) no later than seven business days after receiving HLC’s action letter. HLC must publish such decisions no later than one business day after notifying the institution of the Board action.

Regulatory Reference: 34 CFR §602.26(f)
HLC Policy: INST.B.30.010 Voluntary Resignation of Accreditation or Candidacy (Formerly, Termination of Affiliation or Accreditation)

Implications: Accreditor must notify USDE within 10 days of providing the institution with written acceptance of the institution’s resignation.

Due Process

Regulatory Reference: 34 CFR §602.25(f)
HLC Policy: INST.E.90.010 Appeals

Implications: The Appeals Body may no longer reverse the Board’s decision. It may only affirm, amend or remand a decision.

Substantive Changes and Other Reporting Requirements

Regulatory Reference: 34 CFR §602.22
HLC Policy: INST.F.20.040 Substantive Change and related policies (Policy changes will likely be located in Substantive Change policies)

Implications: The accreditor’s definition of substantive change must cover high-risk, high-impact changes including at least the following: “Substantial” change in the established mission or objectives of the institution or its programs; the addition of graduate programs by an institution that offered only undergraduate programs or certificates; a change in the way an institution measures student progress whether by clock hours, credit hours, semesters, trimesters, quarters, or uses time-based, or non-time-based methods; a substantial increase in the number of clock or credit hours awarded, or an increase in the level of credential awarded, for successful completion of one or more program.

Additional substantive change approval requirements apply to institutions that are placed on a sanction or under a Show-Cause Order after July 1, 2020. Such institutions must receive prior HLC approval for the following changes while they are on sanction or under a Show-Cause Order and for three academic years following removal of the sanction or Show-Cause Order:

1. A change in an existing program's method of delivery.
2. An aggregate change of 25 percent or more of clock/credit hours or content of a program since the institution’s most-recent accreditation review.
3. The development of customized pathways, or abbreviated or modified courses or programs to either accommodate a student's existing knowledge from employment or military service; or to close competency gaps between demonstrated prior knowledge and the full requirements of the program.
4. Contractual arrangements where a third party offers up to 25 percent of one or more of the accredited institution's programs.

Under the new regulations, beginning July 1, 2020, all institutions not on sanction or under a Show-Cause Order will be required to notify HLC of any such changes within 30 days. (Note: HLC received confirmation from USDE that this requirement applies to institutional accreditors in addition to programmatic accreditors – the requirement appears in a parenthetical in 34 CFR 602.22(b)). HLC is developing appropriate procedures to allow institutions to comply with this new requirement.

Procedural mandates in the area of substantive change include a requirement that the accreditor makes a final decision within 90 days of receipt of a materially complete application for approval of a contractual arrangement, unless the accreditor determines significant circumstances related to the substantive change application warrant a review by the accreditor’s decision-making body within 180 days.

Options Available to All Accreditors as of July 1, 2020

In addition to mandates, there are many regulatory options in the revised federal regulations as outlined below that present new opportunities for each accreditors’ consideration. HLC is independently studying the implications of these regulatory options to determine what changes, if any, it will make to its related policies and procedures. As part of its process of reviewing the regulatory options, HLC may solicit feedback from member institutions as to how HLC might address a particular regulatory option. The purpose of soliciting this feedback is to enhance the information and institutional perspectives that HLC will have available as it engages in its own decision-making on these issues.

If HLC determines to change any policies due to the regulatory options, HLC will follow its regular process for revising or adopting policies. HLC will post proposed policy changes on its website after Board approval on first reading and invite comments on those policies before the Board takes final action to adopt the relevant policy. In some instances, in the interest of clarity, HLC will also communicate with member institutions if it has independently determined that a regulatory option will not result in a change to policy or procedures at this time.

Any HLC decisions about the agency’s policies and procedures will be made independently, taking into account factors such as HLC’s mission, quality assurance goals, and the needs and interests of all stakeholders, including member institutions and the students they serve.

Geographic Area of Accrediting Activities

Regulatory Reference: 34 CFR §602.11

As of July 1, 2020, under federal regulations, HLC’s geographic area is defined as any state in which HLC member institutions have a main campus, branch campus or additional location. This geographic area could change frequently as HLC member institutions open and close branch campuses and additional locations. HLC will publicize its geographic area, as required by federal regulations.

HLC’s Bylaws currently state that to be member of HLC, an institution must be incorporated in, and have substantial presence in, one of 19 states. HLC’s Bylaws will continue to inform HLC’s candidacy and accreditation requirements. Any change in HLC’s Bylaws must first be considered by HLC’s Board of Trustees before adoption. This process includes soliciting feedback from member institutions.

Administrative and Fiscal Responsibilities

Regulatory Reference: 34 CFR §602.15

As of July 1, 2020, accreditors may include students on their decision-making bodies, in addition to employers.

Accreditation and Preaccreditation Standards

Regulatory Reference: 34 CFR §602.16

Accreditors need not have separate standards, procedures or policies for the evaluation of distance education or correspondence courses.

Accreditors may choose to have separate standards regarding an institution’s process for approving curriculum to enable programs to more effectively meet recommendations of industry advisory boards that include employers who hire program graduates; widely recognized industry standards and organizations; credentialing or other occupational registration or licensure; or employers in a given field or occupation, in making hiring decisions.

Accreditors may choose to have separate faculty standards for instructors teaching courses within a dual or concurrent enrollment program or career and technical education courses, as long as the instructors in the accreditor’s judgment are qualified by education or work experience for that role.

Ensuring Consistency in Decision Making

Regulatory Reference: 34 CFR §602.18

Accreditors may adopt policies for retroactive application of an accreditation decision so long as it is published and (i) the effective date does not predate either an earlier denial of accreditation or preaccreditation to the institution or program; or (ii) the accreditor’s formal approval of the institution or program for consideration in the accreditor’s accreditation or preaccreditation process.

When special circumstances exist, including innovative program delivery approaches, or when undue hardship on students occurs, an accreditor may apply “equivalent written standards, policies and procedures that provide alternative means of satisfying one or more of its [various requirements]” (for preaccreditation, accreditation, substantive change, enforcement of standards, or teach out etc.) if the following apply:

1. The alternative standards and the selection of institutions to which they will be applied are approved by the accreditor’s decision-making body and otherwise meet the intent of the agency's expectations and requirements.
2. The accreditor sets and applies equivalent goals and metrics for assessing the institution's performance.
3. The agency's process for establishing and applying the alternative standards, policies and procedures are published in its accreditation manuals.
4. The agency requires the institution seeking application of the alternative standards to demonstrate a need for an alternative assessment approach, that students will receive equivalent benefit and will not be harmed through such application.

An accreditor may permit an institution or program to be out of compliance with one or more of its standards, policies and procedures for a period of time, as determined by the accreditor annually, not to exceed three years unless the accreditor determines there is good cause to extend and if the institution and accreditor can show circumstances requiring the period of noncompliance are beyond the institution’s or program’s control (note some examples listed in the regulations), the grant of the period of noncompliance is approved by the decision-making body, the accreditor projects the institution has resources to achieve compliance within the time allotted and the institution demonstrates the period of noncompliance will not contribute to the cost of the program without the student’s consent, create any undue hardship or harm to students, or compromise the program’s academic quality. (Note: Institutions should note the HLC Board’s recent adoption of related policy revisions on second reading in June 2020. See HLC policy on Denial or Withdrawal of Status.)

Enforcement of Standards

Regulatory Reference: 34 CFR §602.20

An accreditor’s written timeline for an institution to come back into compliance may include intermediate checkpoints on the way to full compliance and must not exceed the lesser of four years or 150 percent of the length of the longest program at the institution. The accreditor may exceed this timeframe with a good cause extension if it determines such is warranted. (Note: Institutions should note the HLC Board’s recent adoption of related policy revisions on second reading in June 2020. See HLC policy on Denial or Withdrawal of Status.)

When the accreditor takes adverse action, it may maintain the institution’s accreditation or preaccreditation until the institution has had a reasonable time to complete the activities in its teach-out plan or to fulfill the obligations of any Teach-Out Agreement to assist students in transferring or completing their programs. (Note: Institutions should note the HLC Board’s recent adoption of related policy revisions on second reading in June 2020. See HLC policy on Denial or Withdrawal of Status.

Under the new regulations, institutional accreditors may limit adverse action or other action to a particular program or to a particular additional location without necessarily taking action against the entire institution and all of its programs, provided noncompliance is limited to that particular program or location.

Substantive Change

Regulatory Reference: 34 CFR §602.22

The accreditor’s decision-making body may designate senior staff to approve the following types of substantive changes in a timely, fair and equitable manner: new programs; the way an institution measures student progress; substantial increase in clock/credit hour; additional locations in a teach-out context; and contractual arrangements.

Additional Procedures Certain Institutional Accreditors Must Have: Credit Hour Policies

Regulatory Reference: 34 CFR §602.24

While the definition of the term “Credit Hour” has been preserved, the new regulation repeals the mandate requiring accreditors, as part of a review for initial accreditation, preaccreditation (candidacy) or renewal of accreditation (reaffirmation) to conduct an effective review and evaluation of the reliability and accuracy of the institution's assignment of credit hours. This means the review of the institution’s assignment of the credit hour is optional. (Note: Institutions should be aware of HLC’s intention to exercise its option to continue such review procedures as part of its revised Federal Compliance program for 2020-21).