ERIC Identifier: ED457762
Publication Date: 2001-00-00
Author: Wood, Patricia A.
Source: ERIC Clearinghouse on
Higher Education Washington DC.| BBB32577 _ George Washington Univ. Washington
DC. Graduate School of Education and Human Development.
The U.S. Department of Education and Student Financial Aid for
Distance Education: An Update. ERIC Digest.
Since the mid-1990s, there has been a boom in the number of U.S. colleges and
universities providing courses and degree programs via distance
education--education or training courses delivered to off-campus locations via
audio, live or prerecorded video, or computer technologies, including both
synchronous and asynchronous instruction (Lewis, Snow, Farris, and Levin, 1999,
pp. vi, 2). Between 1995 and 1998, enrollments in distance education classes
more than doubled, reaching 1,632, 350, and this rapid growth is expected to
continue (U.S. Dept. of Education, 2001, June 25).
This virtual explosion in distance education has piqued the interest of
parents, students, distance education providers, and federal officials in the
rules governing the U.S. Department of Education's distribution of federal
student financial aid for distance learning. Under the current federal student
aid programs (Title IV of the Higher Education Act of 1965, as amended), the
bulk of student aid is awarded to a college or university's resident students;
there are a number of statutory and regulatory provisions that limit the
eligibility of distance education students to receive financial assistance (U.S.
Dept. of Education, 1999, June 25).
The Education Department is now reexamining these provisions, considering how
student financial aid regulations are affecting distance education programs, and
formulating recommendations for change. This paper offers a brief discussion
about the growth of distance education in the postsecondary arena and summarizes
the Education Department's progress in evaluating current rules governing
financial aid for distance learning.
DISTANCE EDUCATION AT POSTSECONDARY INSTITUTIONS
Education at Postsecondary Institutions: 1997-98, a 1999 Education Department
report, found that 1,190 distance learning programs were offered by higher
education institutions in 1998, a 72 percent increase from 1995. In 1998, 1,680
institutions offered a total of about 54,000 online-education courses, with 1.6
million students enrolled. Forty-four percent of higher education institutions
offered distance education courses in 1998, an 11% increase from 1995
(Carnevale, 2000, January 7).
Other report findings include:
1) The Internet was the medium of choice for most institutions providing
distance education. From 1995 to 1998, the proportion of institutions that used
two-way interactive video dropped from 57 percent to 56 percent; the proportion
that used recorded video courses dropped from 52 percent to 48 percent. The
proportion of those offering asynchronous courses on the Internet increased from
22 percent to 60 percent, while the proportion providing synchronous courses on
the Internet increased from 14 percent to 19 percent (Carnevale, 2000, January
2) Seventy-seven percent of institutions charged the same tuition for similar
online and traditional courses, and 66 percent did not charge additional fees
for distance education courses (Carnevale, 2000, January 7).
3) Of the schools offering distance education programs, 70 percent offered
courses in English, social and behavioral sciences, and the humanities; 55
percent offered courses in business and management; 36 percent offered courses
in health care; 32 percent in mathematics; 29 percent in education; 26 percent
in computer science; 17 percent in vocational and technical fields; 12 percent
in engineering; 7 percent in agriculture and natural resources; and 6 percent in
library and information sciences. Sixteen percent of the colleges offered other
distance education courses (Carnevale, 2000, January 7).
BATTLING FRAUD AND ABUSE IN THE STUDENT AID PROGRAMS
rapid expansion of distance education introduces potential risks for fraud and
abuse of the Department of Education's student financial assistance programs.
Similar risks were present in the 1980s as the numbers of institutions offering
postsecondary vocational education increased substantially. A number of student
aid program abuses were exposed, including questionable recruiting practices,
sudden school closures, participation of low quality schools, and courses
expanded in order to obtain more student aid (U.S. Dept. of Education, OPE, PPI,
2001, p.29). To combat such abuses, the Department's oversight authority was
expanded by provisions enacted in the late 1980s and early 1990s. The Higher
Education Amendments of 1992 were particularly effective in addressing the fraud
and abuse in the Title IV student financial aid programs that occurred primarily
in schools that delivered instruction by print-based correspondence. The
Amendments effectively barred schools offering over half of their courses via
correspondence or a combination of correspondence and telecommunications from
participating in Title IV, student financial aid programs. One rule limited to
less than 50 percent the numbers of students an eligible institution is allowed
to enroll in correspondence courses. Another stipulated that correspondence
students are allowed to receive Title IV financial assistance only if enrolled
in associate's, bachelor's, or graduate degree programs. Congress also imposed a
30-week academic year requirement on eligible institutions in response to abuses
such as course stretching and other issues of program length (U.S. Dept. of
Education, OPE, PPI, 2001, pp.16, 29).
Though fraud and abuse of the Title IV financial aid programs were greatly
remedied by the increased number of provisions set forth in the 1992 HEA
amendments, these rules are now hampering distance education students in
receiving financial aid (Van der werf, 2000). Until recently, the 1992
Amendments had little effect on the majority of institutions participating in
Title IV, student financial assistance programs. Providing distance education
via correspondence or telecommunications was a small part of their activity. The
postsecondary education landscape has changed dramatically over the last few
years, however, as the Internet and other technologies have extended
institutions' reach and the demand for online education has grown rapidly. (U.S.
Dept. of Education, OPE, PPI, 2001, p. 16).
DISTANCE EDUCATION DEMONSTRATION PROGRAM
By the late 1990s,
Congress recognized the importance of the growing trend in distance education as
an option to on-campus study and its potential for increasing access to
postsecondary education for some groups of students--students living in rural
areas, working parents, and students with disabilities that limit their access
to the traditional campus setting (U.S. Dept. of Education, 1999, June 25). At
the same time, Congress wished to proceed cautiously in amending the rules
regulating student financial aid for distance education (U.S. Dept. of
Education, OPE, PPI, 2001, p. 29).
Congress acted by authorizing the Distance Education Demonstration Program in
the 1998 Higher Education Amendments. The Demonstration Program is designed to
provide increased student access to higher education through distance education
and to test the quality and viability of expanded distance education programs
currently restricted under the Higher Education Act. It is also designed to help
determine the most effective means of delivering quality education via distance
education, the statutory and regulatory requirements that should be altered to
provide greater access to distance education, and the appropriate level of Title
IV, student financial assistance for students enrolled in distance education
programs (U.S. Dept. of Education, OPE, PPI, 2001, p. 1).
In short, the Demonstration Program will test some of the issues related to
student aid for distance learning before Congress considers policy changes that
might again result in increases in fraud and abuse (U.S. Dept. of Education,
OPE, PPI, 2001, p. 34).
The Distance Education Demonstration
Program allows selected postsecondary schools, systems, and consortia waivers of
two rules that currently limit the eligibility of financial aid for distance
1) the rule that makes schools ineligible for student aid if they enroll 50
percent or more of their students in distance education programs or offer 50
percent or more of their courses via distance education.
2) the rule that requires that a school's academic year consist of a minimum
of 30 weeks for students to receive the maximum federal financial aid.
Waivers are also granted from some Title IV financial aid regulations to
facilitate arrangements such as:
1) sharing of distance education courses among consortia members;
2) enrollment tracking to verify status of students taking courses at several
3) collaborations between two- and four-year institutions that will allow a
student who has earned an associate degree from a community college to complete
a baccalaureate degree via distance education;
4) calculating a student's cost of attendance by limiting costs to tuition,
fees, books and supplies, and excluding living expenses, to help determine the
appropriate amount of federal aid for distance education students (U.S. Dept. of
Education, 1999, June 25).
The Distance Education Demonstration
Program began to be implemented on July 1, 1999 with the selection of 15
postsecondary schools, systems and consortia to participate in the first year of
the program. Additional participants were selected to join the program in its
third year, beginning July 1, 2001 (U.S. Dept. of Education, OPE, 2001, October
26). The projects are expected to continue through the 2003-2004 academic year
at which time Congress is expected to consider amendments to the Higher
Education Act (U.S. Dept. of Education, 2001, June 25). There are currently 24
participants, including over 100 institutions from 20 states and the District of
Columbia (U.S. Dept. of Education, OPE, 2001, October 26)
American InterContinental University http://www.aiu-online.com
Brevard Community College http://www.brevard.cc.fl.us
Capella University http://www.capellauniversity.edu
Community Colleges of Colorado (system schools) http://www.cccoes.edu
Connecticut Distance Learning Consortium (consortium members)
Eastern Oregon University http://www.eou.edu
Florida State University http://www.fsu.edu
Franklin University (consortium members) http://www.franklin.edu
JesuitNET Consortium http://www.ajcunet.edu
LDS Church Education System (system schools) http://www.byu.edu
Marlboro College http://www.gradcenter.marlboro.edu
New York University http://www.scps.nyu.edu
North Dakota University System (system schools) http://www.ndus.nodak.edu
Quest Education Corp - Kaplan College http://www.kaplancollege.com
Regis University http://www.regis.edu/distance.asp%20
Christian University http://www.southernchristian.edu
Texas Tech University http://www.dce.ttu.edu
United States Sports Academy http://www.ussa.edu
University of Maryland University http://www.umuc.edu
University of Phoenix http://www.phoenix.edu
Walden University http://www.waldenu.edu
Washington Community and Technical College System Online Consortium (consortium
Washington State University http://www.wsu.edu
Western Governors University http://www.wgu.edu
Dept. of Education, OPE, Distance Education Demonstration Program. Participating
Staff from the Education Department's Office of Postsecondary Education and
Office of Student Financial Assistance administer the Demonstration Program. The
Office of Postsecondary Education, as the office responsible for the development
of Title IV Student Financial Assistance policy, provides the Program leadership
(U.S. Dept. of Education, OPE, 2001, October 26).
Congress required that Program findings be
reported after 18 months with subsequent reports submitted annually (Carnevale,
2001, Feb. 9). The Report to Congress on the Distance Education Demonstration
Program, issued January 2001, responds to some of the concerns that institutions
have about the federal financial aid rules and statutes, but does not make
specific recommendations about what actions Congress should take (Carnevale,
2001, Feb. 9).
According to the report, inflexibility in financial aid regulations hurts the
advancement of distance education. Current rules that restrict which colleges
and universities can provide federal financial aid to distance education
students are complex and inhibiting and should be updated to reflect the growth
of alternative education (Carnevale, 2001, Feb. 9). One of these rules--the "50
percent rule"-- disallows schools offering more than half of their courses via
distance learning from providing federal student aid. A second rule targeted as
inhibiting is the +12-hour rule" -- a rule created to exclude diploma mills --
that requires that students enroll in at least 12 hours of course work a week to
qualify for full-time status and the maximum amount of student aid (Carnevale,
2001, Jan. 19, Feb. 9). Proponents of distance education assert that distance
education and other alternative teaching methods do not rely on classroom hours
to gauge students' learning and call the 12-hour rule an antiquated measure;
distance education allows students to be in class for as long as they need to,
they argue, rather than for a prescribed period (Carnevale, 2000, Sept. 15). The
report also suggests the possibility of experimenting with a student-based
delivery system --disbursing financial aid to students directly, instead of the
current practice of giving it to postsecondary institutions to distribute (U.S.
Dept. of Education, OPE, PPI, 2001, p.vi).
Though the Distance Education Demonstration
Program was begun during the last Administration, the matters involved are
bipartisan. The new Administration has stated it will work with Congress
throughout the coming months to explore the myriad issues that must be carefully
considered before crafting new student financial aid regulations (Carnevale,
2001, Jan. 19). Interested parties may stay abreast of developments by visiting
the Distance Education Demonstration Program web site at
American Council on Education. (March 2000).
Developing a distance education policy for 21st century learning. Retrieved June
8, 2001, from the American Council on Education, Division of Government and
Public Affairs Web site:
Carnevale, D. (2000, January 7). Survey finds 72% rise in number of distance
education programs [Electronic version]. The Chronicle of Higher Education, p.
Carnevale, D. (2000, September 15). U.S. mulls aid changes for distance
courses [Electronic version]. The Chronicle of Higher Education, p. A28.
Carnevale, D. (2000, November 3). Colleges receive tips on joining federal
effort on aid for online-education students [Electronic version]. The Chronicle
of Higher Education, p. A43.
Carnevale, D. (2001, January 19). Education Dept. told that aid rules impede
distance education [Electronic version]. The Chronicle of Higher Education, p.
Carnevale, D. (2001, February 9). Report to Congress says financial-aid rules
are hurting distance programs [Electronic version]. The Chronicle of Higher
Education, p. A34.
Lewis, L., Snow, K., Farris, E., Levin, D. (1999). Distance education at
postsecondary education institutions: 1997-98. (National Center for Education
Statistics Report No. 2000-013). Washington, DC: U.S. Department of Education.
Retrieved June 8, 2001 from the Department of Education web site:
U.S. Department of Education. (1999, June 25). New ED projects promote
distance learning for college. Press Release. Retrieved June 8, 2001 from the
Department of Education web site:
U.S. Department of Education (2001, June 25). Ten new distance ED projects
expand higher ED access. Press Release. Retrieved October 26, 2001 from the
Department of Education web site:
U.S. Department of Education, Office of Postsecondary Education. (2001,
July). Student Financial Assistance and Nontraditional Educational Programs
(Including the "12-Hour Rule"). A Report to Congress. Retrieved October 15, 2001
from the Department of Education web site:
U.S. Dept. of Education, Office of Postsecondary Education. Distance
Education Demonstration Program. Retrieved October 26, 2001 from the Department
of Education web site: http://www.ed.gov/offices/OPE/PPI/DistEd/%20
U.S. Dept. of Education, Office of Postsecondary Education. Distance
Education Demonstration Program. Participating Institutions. Retrieved October
26, 2001 from the Department of Education web site:
U.S. Department of Education, Office of Postsecondary Education, Policy,
Planning and Innovation. (2001). Report to Congress on the Distance Education
Demonstration Programs. Retrieved June 8, 2001 from the Department of Education
web site: http://www.ed.gov/offices/OPE/PPI/distEd.html%20
Van der werf, M. (2000, July 9). Colleges picked for project on aid to
distance learning students [Electronic version]. The Chronicle of Higher
Education, p. A34.