IEC Conference

Washington, DC

Foreign Schools Student and

Educational Program Eligibility

Updates

Greg Martin 06.09.2014

What are Written Arrangements?

Written Arrangements

• Two types of written arrangements

• Consortium agreement

• Contractual agreement

• Consortium agreement

• A written agreement between two or more eligible institutions

• Contractual Agreement

• A written agreement between an eligible and an ineligible school

• Foreign Institutions may not enter into contractual agreements

• An ineligible institution or organization may not provide any portion of an

eligible foreign institution’s program(s)

• Since foreign institutions may only enter into written arrangements

with other eligible institutions, this balance of this presentation

(unless noted) will refer only to consortium agreements

3

Consortium Agreement

• Student may take courses at a school other than the home school

and have those courses count toward the degree or certificate at the

home school

• Home school must give credit courses taken at other schools on

same basis as if it provided the training itself

• Underlying assumption that the home institution has found the other

institution’s academic standards equivalent to its own

• Home institution may decline to give credit for courses where a

student earns a grade not acceptable at the home institution

• Even if the host school would accept that grade for its resident students

• SAP

• Grades received through a consortium agreement do not have to be

included when calculating GPA but must be included in calculating

percentage of credits earned vs. attempted

Disclosures

• Institution must provide enrolled and prospective students a

description of consortium agreements it has entered into including

• Portion of the educational program the institution that grants the degree is

not providing

• Name and location of other institutions that are providing that portion of the

program

• Method of delivery of that part of the program, and

• Estimated additional costs students may incur by enrolling in that program

provided under a consortium agreement *

* Note: Individual, student-initiated agreements are not subject to these

disclosures

Duration of Consortium Agreements

• If not written for an individual or group of students, agreements

between schools may go on indefinitely and do not need to be

renewed unless terms of the agreement change

• Individually initiated agreements or those for specific groups continue

for a length of time specified in the agreement

• No institution is required to enter into a consortium agreement with

another eligible institution regardless of how much a student may

desire such an agreement to be executed

Division of Responsibilities

• Either the home or host school may assume responsibility for

disbursing loan funds and/or monitoring students

• Home school generally assumes responsibility for disbursing and

monitoring

• May be easier for the host institution to perform these functions if a student

will be at that institution for a full term or academic year

• Under a consortium agreement, any participating institution may

make Direct Loan calculations and disbursements without being

considered a third-party servicer

• Institution that disburses Direct Loan to the student is responsible for

maintaining information on the student’s eligibility, calculation of

award, money disbursed etc.

• Also responsible for returning funds in overpayment/ R2T4 situations

Structure of Consortium Agreements

• Consortium agreement can be a blanket agreement between two or

more eligible schools or it can be for a specific student

• Institutional options

• One agreement for each student

• Separate agreement with each host school

• Blanket agreement with a group of schools

• No limit on the portion of the eligible program that may be provided

by the host institution(s)

• Agreement contents may vary widely depending upon the interests of

the institutions involved and any governing body standards

Contents of a Consortium Agreement

• The Department does not dictate a format of an agreement or where

it is kept

• Agreement must include

• Institution that will grant the degree or certificate

• Student’s tuition, fees, room and board costs at each school

• Student’s enrollment status at each school

• School that will be responsible for disbursing Direct Loan funds and

monitoring the student’s eligibility, and

• Procedures for calculating awards, disbursing aid, monitoring SAP, and

other requirements such as recordkeeping and returning funds if a student

withdraws.

Consortium Agreement Restrictions

• Eligible foreign institutions, (except with respect to clinical training

part of a medical, veterinary or nursing program offered by the

institution) may not enter into written arrangements (consortium

agreements) with institutions in the United States

• Recall that eligible foreign institutions are not permitted to enter into written

arrangements with non-eligible entities (known as contractual

arrangements) anywhere

Foreign Institution Eligibility As it Pertains to Written Arrangements

Foreign Institutions -Eligibility

• Programs offered in the U.S. by foreign institution are not eligible for

participation in the Title IV programs

• Regardless of whether offered at a U.S. location of the foreign institution, or

through arrangement with a U.S. school

• Status of programs offered in the U.S. by foreign institutions is

dictated by the regulatory definition of a foreign institution

Foreign Institutions -Eligibility

• Foreign Institutions regulations do not prohibit participating foreign

institutions from offering a program in the U.S.

• A foreign institution may offer programs in whole or in part in the U.S.

But…

• Such a program a program is not for Title IV program purposes

• Students attending such a program are not eligible to receive Title IV funds

for any part of the program

Foreign Institutions -Eligibility

• Foreign institution is an institution that, except with respect to clinical

training part of a medical, veterinary, or nursing program;

• Has no U.S. location

• Has no written arrangements (defined in §668.5) with

institutions/organizations located in the U.S. for students enrolling at the

foreign institution to take courses from institutions located in the U.S.; and

• Does not permit students to enroll in any course offered by the foreign

institution in the U.S. - includes research, work, internship, externship or

special studies within the U.S.

• Exception - independent research done by a student in the U.S. for not more than

one academic year conducted during the dissertation phase of a doctoral program

under the guidance of faculty and research can only be performed in the U.S.

Note: The above is not complete definition of foreign institution but

rather that part relevant to coursework offered in the U.S.

Ineligible Programs

• A program offered in whole or in part through telecommunications,

otherwise known as distance education

• A program offered in whole or in part through correspondence

• A program offered through direct assessment

• A program for which any portion of the program is provided by an

entity that is not eligible to participate in the Title IV programs

• Except for affiliation agreements for the provision of clinical training for

foreign graduate medical, veterinary, and nursing schools

• With limited exceptions, a program offered in whole or in part in the

United States

Ineligible Programs

• A Direct Loan-eligible version of a program must be administratively

distinct from any version of the program that contains Direct Loan -

ineligible courses

• The program must be identified separately wherever programs are listed

online or in publications

• Student enrollment and progress must be tracked separately

• Use a unique program identifier or number

• A separate program offered for eligibility reasons does not require

creation of duplicate courses

• Students from both programs may attend the same classes

Direct Loan-Eligible Version of Program

• Program information provided to students must make clear that

students will not be eligible for Direct Loan funds if he/she enrolls in

the ineligible version

• Information must be made readily available to enrolled and

prospective students through publications, mailings or electronic

media

• A brief description of this information must be included in the notice

that must be provided to enrolled students listing the categories of

information to be made available to them

• Explanation of how to obtain the information must be offered

Example: Transalpine University

Transalpine University’s Problem:

• Eligible foreign institution enrolling U.S. students

• Offers a BSc in Finance

• Two intermediate accounting courses that apply to the degree requirements may be taken in an online environment

• Online option renders the entire program ineligible

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

Transalpine University’s Proposed Solution:

• Keep U.S. students (who are Direct Loan recipients) in the same program but prevent their enrolling in either of the online courses

• Result is that the BSc Finance is still a Direct Loan- ineligible program because restricting U.S. students from taking online coursework does alter the fact that they are enrolled in an ineligible program

Does not work!

Example: Cisalpine University

Cisalpine University’ s Problem:

• Eligible foreign institution enrolling U.S. students

• Offers a BSc in Finance

• Two intermediate accounting courses that apply to the degree requirements may be taken in an online format

• Online option renders the entire program ineligible

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

Cisalpine University’s Proposed Solution:

• Designate an administratively different version of the BSc Finance they will call BSc Finance (USe) using a unique program number

• Eligible coursework for this program will not include the accounting courses in an online format, otherwise the programs are identical

• Publications will identify the programs separately

• Result is that the BSc Finance (USe) is a Direct-Loan eligible program

Does Work!

Distance Education

However, foreign institutions may use distance education technologies to supplement and support instruction offered in a classroom located in a foreign country where students and instructor are physically present

Credits From Other Institutions

• ED does not restrict an institution’s discretion to award credit for

courses completed at other institutions

• Direct Loan funds may not be provided for the transferred credits

• If a student independently completes a Direct Loan-ineligible course

at an unaffiliated institution those credits may be transferred into the

student’s program at the eligible institution provided the student does

not receive Direct Loan for those courses

• This guidance doe not apply if there is an arrangement between the

institutions for transfer of credit

• If there is an agreement to transfer credit (formal or informal) the limitations

of the requirements for written arrangements apply (34 CFR 668.5)

Internships

Internships – Foreign Institutions

• Foreign institution (except with respect to clinical training part of a

medical, veterinary , or nursing program offered by the institution)

may not permit Direct Loan recipients to enroll in any course offered

by the foreign institution in the United States

• Includes research work, internship, externship, or special studies within

the United States

• Excepts independent research done by an individual student in the United

States for not more than one academic year

• Must be conducted during the dissertation phase of a doctoral program

• Must be done under the guidance of faculty

• Must be research that can only be performed in the United States

Internships – Foreign Institutions

• Internships /externships are, with exception, subject to written

arrangement requirements found in 668.5

• Exception –internships/ externships governed by explicit accrediting

agency standards requiring oversight and supervision of institution are not

subject to written arrangement requirements

• Institution must be responsible for the internship/externship

• Students must be monitored by qualified institutional personnel

• U.S. institutions generally meet the above standard through

accreditation agency oversight

• Comparable standard for foreign institutions is oversight of

internships/externships by some outside agency (accrediting agency

or government entity)

• Institution must be responsible for internship/externship

• Students must be monitored by qualified institutional personnel

Internships-Foreign Institutions

• Practical effect of applicable regulations and policy:

Internships/externships at foreign institutions must be subject to

oversight by an accreditor or government entity if the program of

which the internship/externship is part, is to be eligible

• If the above cannot be demonstrated, the internship is subject to the

requirements of written arrangements in 668.5

• Foreign institutions may have written arrangements with eligible

entities only

• If an internship is subject the requirements for written arrangements

and that internship is with a non-eligible entity (e.g., a local

company), the program of which that internship is part would not be

an eligible program

Written Arrangements Between U.S. Institutions and Foreign Institutions

U.S. Inst. Written Arrangements

• Eligible U.S. institution may have written arrangements with a foreign

institution or organization acting on behalf of the foreign institution

• Foreign institution provides part of a program

• Students enrolled in that program may receive Title IV funds

• Any arrangement between a U.S. institution and a foreign institution

or organization acting on behalf of a foreign institution is considered

to be one between an eligible U.S. institution (where student is

enrolled) and an ineligible foreign institution

• Even if the foreign institution is otherwise Title IV eligible

Note: These arrangements are known as Contractual Agreements –

U.S. institutions may execute a contractual agreement with a foreign

school but the reverse is not permitted

Contractual Agreements

• Eligible institution (U.S. Institution) is always the “home” institution

• Student must be continuously enrolled in eligible institution

(U.S. Institution) as a regular (degree seeking) student

• U.S. institution must perform all Title IV functions

• Determine eligibility, COA and enrollment status

• Disburse funds

• U.S. institution responsible for maintaining all records documenting

student eligibility and receipt of Title IV funds

• Upon program completion, student must receive a degree from the

U.S. institution

• May also receive a degree from the foreign institution

Contractual Agreements

• Limit on portion of program that may be offered by an ineligible

institution

• Portion of program provided by ineligible institution must be less than 50%

• If there is no common ownership or control

• Portion of program provided by ineligible institution may be no more than

25%

• If both the eligible and ineligible institution are owned or controlled by the same

partnership or corporation

• For separately owned or controlled institutions:

• If ineligible institution/organization provides more than 25% of the program, eligible

institution’s accrediting agency or state agency must determine that the

arrangement meets the agencies standards for contracting out of educational

services

Contractual Agreements

• Other factors that may prevent a foreign institution participating in a

written arrangement with a U.S. institution

• Ineligible institution/organization has had its eligibility terminated by ED

• Ineligible institution/organization has voluntarily withdrawn from the Title IV

programs under termination, show-cause, suspension action initiated by

ED, State licensing agency or guarantor

• Eligible institution (U.S. institution) has had its certification to participate

revoked by ED

• Eligible institution (U.S. institution) had its application for certification or

recertification to participate in the Title IV programs denies by ED

Reporting for Consortium Agreements

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• Institution that awards Title IV aid is responsible for reporting to Common Origination and Disbursement System (COD) • Academic year, loan period, and disbursement dates

reported to COD should be those of the school which is awarding the aid

• Enrollment must always be reported to NSLDS by the home institution • Home institution is responsible for prompt and accurate

reporting to NSLDS of a student’s withdrawal or graduation dates, changes in enrollment status

• Must be accomplished under the Department’s normal requirements for such reporting

Thank You