Distance Education Act Tweaks Funding Rules for Online Programs

The "Ensuring Distance Education Act" is a new bill that changes how the government looks at money coming into colleges from online programs. Specifically, it amends the Higher Education Act of 1965, focusing on something called the 90/10 rule. Right now, we don't know the exact changes, but it's all about how the feds calculate the percentage of a school's revenue that comes from federal student aid versus other sources.

What's the 90/10 Rule Anyway?

The 90/10 rule, part of the Higher Education Act, says that for-profit colleges can't get more than 90% of their revenue from federal student aid (like Pell Grants and federal loans). The other 10% has to come from somewhere else – tuition paid out-of-pocket, private loans, etc. It's supposed to make sure schools aren't completely reliant on government money and have some "skin in the game."

Remixing the Revenue Recipe

This bill, specifically SEC. 2, is remixing how that 90/10 calculation works for online programs. The bill modifies the existing regulations, but it doesn't provide the details. For example, are they making it easier for online programs to meet the 90/10 requirement? Are they counting certain types of online program revenue differently?

Real-World Ripple Effects

Without the specifics, it is hard to know the definite outcomes, but the changes could have some real-world effects:

• More Online Options? If the changes make it easier for schools to offer online programs while staying within the 90/10 rule, we might see more online degree and certificate programs pop up. This could be a big deal for people who need the flexibility of online learning – think single parents, folks working full-time, or people in rural areas without easy access to a traditional campus.
• Institutional Flexibility: The bill could give colleges more wiggle room in how they manage their finances, especially if they have a lot of online students. This could mean more resources for student support, technology upgrades, or even tuition stabilization.
• Potential Challenges: It is also possible that the changes could provide new loopholes, or have other negative affects. It is difficult to know without the specifics of the changes to the regulations.

The Bottom Line

The "Ensuring Distance Education Act" is making some kind of change to the financial rules for online higher education. Whether that change is a game-changer for students and schools, or a recipe for unintended consequences, remains to be seen. It all depends on the details, and those are still under wraps.