[Federal Register: February 4, 1999 (Volume 64, Number 23)]
[Page 5703-5707]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[[Page 5703]]


Part II

Department of Education
Federal Student Financial Assistance Programs--Distance Education
Demonstration Program; Notice

[[Page 5704]]


Federal Student Financial Assistance Programs--Distance Education 
Demonstration Program

AGENCY: Department of Education.

ACTION: Notice inviting applications for participation in the Distance 
Education Demonstration Program.


SUMMARY: The Secretary of Education invites institutions of higher 
education (institutions), systems of institutions, consortia of 
institutions, and Western Governors University to submit applications 
to participate in the Distance Education Demonstration Program 
authorized under section 486 of title IV of the Higher Education Act of 
1965, as amended (HEA). Under the Distance Education Demonstration 
Program, selected institutions providing distance education programs 
may receive waivers of specific statutory and regulatory provisions 
governing the student financial assistance programs authorized under 
title IV of the Higher Education Act of 1965, as amended, (Title IV of 
the HEA programs).

an application are described in this notice. There is no application 
form per se for the program. Applications should be submitted 
electronically by electronic mail or in hard copy to the addresses 
below. All applications should clearly designate a contact person, and 
the telephone number and the e-mail address of the contact person. 
Applications submitted by electronic mail should be submitted in 
Microsoft Word version 6.1 or lower or WordPerfect version 6.0 or 
lower. Applicants need only submit one original application. No copies 
are necessary.

DATES: Applications must be postmarked or submitted electronically on 
or before April 1, 1999.

ADDRESSES: DistanceDemo@ed.gov is the address for electronic 
submission. For submission of an application in hard copy: mail hard 
copy to Marianne R. Phelps, U.S. Department of Education, 600 Maryland 
Avenue, S.W., (Room 4082, ROB-3), Washington, D.C. 20202 or hand 
deliver to Marianne Phelps, U.S. Department of Education, Room 4082, 
ROB-3, 7th and D Streets, S.W., Washington, D.C. 20202.

708-5547 or at DistanceDemo@ed.gov if e-mailed. Information 
concerning the program can also be found on the Web site of the 
Department (http://www.ed.gov). Individuals who use a 
telecommunications device for the deaf (TDD) may call the Federal 
Information Relay Service (FIRS) at 1-800-877-8339 between 8 a.m. 
and 8 p.m., Eastern time, Monday through Friday.
    Individuals with disabilities may obtain this document in an 
alternate format (e.g., Braille, large print, audiotape, or computer 
diskette) on request to the contact person listed in the preceding 


Background and Purpose of the Distance Education Demonstration 

    Over the past few years, there has been rapid growth in the number 
of institutions providing courses and degree programs in various modes 
of ``distance education.'' For purposes of the Distance Education 
Demonstration Program and this notice, ``distance education'' is 
defined as an educational process that is characterized by the 
separation, in time or place, between instructor and student. Such term 
may include courses offered principally through the use of television, 
audio, or computer transmission, such as open broadcast, closed 
circuit, cable, microwave, or satellite transmission; audio or computer 
conferencing; video cassettes or discs; or correspondence.
    This growth in distance education has occurred in response to 
increasing demand from students who are restricted in their ability to 
enroll in more traditional programs, including working adults, parents, 
people who live in rural communities, and students with disabilities. 
Another reason for this growth is the potential for cost control. 
Distance education is attractive to institutions that seek to avoid 
large investments in new facilities to meet student demand and to 
students who can complete their educational programs more economically 
using distance education for all or part of their studies. 
Additionally, through consortia and other agreements among institutions 
that provide distance education, many students are able to take 
advantage of a richer selection of course offerings tailored to their 
individual needs than are available at the institutions where they are 
    Distance education has been available to postsecondary education 
students for many years. More recently, advancements in technology have 
provided additional instructional opportunities through the 
incorporation of print, telephone, fax, television, radio, video and 
audio conference, the Internet, electronic mail and computer-based 
integrated telecommunication systems. The richness of the available 
technology has made the delivery of high quality distance education 
possible and desirable for many more postsecondary education programs 
and students.
    Currently, some statutory provisions defining institutional 
eligibility for the Title IV, HEA programs may limit the circumstances 
in which Title IV, HEA program funds can be provided to students 
enrolled in distance education. For example, institutions that offer 
more than 50 percent of their courses via distance education or enroll 
more than 50 percent of their students in distance education programs 
[hereafter referred to as ``the 50 percent rules''] are not eligible to 
participate in the Title IV, HEA programs.
    Other statutory provisions, such as those dealing with the length 
of an academic year and the minimum length of an eligible vocational 
program, are based on the patterns and structure of ``traditional'' on-
campus education. As such, they can be burdensome and difficult to 
apply to distance education programs. They may also limit institutions 
from structuring programs that may best meet the needs of distance 
education students, institutions, and systems and consortia of such 
institutions. Similar problems may arise with regard to regulatory 
provisions implementing part G of title IV of the HEA.
    Many of these requirements were put in place to address abuses in 
the Title IV, HEA programs and until recently did not have much effect 
on institutions offering distance education programs or courses or 
their students' eligibility for aid. However, at this point in the 
evolution of distance education programs, changes to student aid 
requirements may be necessary to allow students to take full advantage 
of the opportunities distance education provides and to make it 
possible for institutions to fully utilize the potential technology now 
offers to enhance distance education courses and programs. On the other 
hand, restructuring aid to fit these new patterns presents some risks 
as well as opportunities, and care in designing alternatives to the 
current student aid requirements is necessary to assure continued 
integrity in the Title IV, HEA programs.
    In response to these dual concerns, Congress enacted the Distance 
Education Demonstration Program. As described in section 486(a) of the 
HEA, the purpose of the program is to--
    (1) Allow demonstration programs that are strictly monitored by the 
Department of Education to test the quality and viability of expanded

[[Page 5705]]

distance education programs currently restricted under this Act;
    (2) Provide for increased student access to higher education 
through distance education programs; and
    (3) Help determine the--
    (A) Most effective means of delivering quality education via 
distance education course offerings;
    (B) Specific statutory and regulatory requirements which should be 
altered to provide greater access to high quality distance education 
programs; and
    (C) Appropriate level of federal assistance for students enrolled 
in distance education programs.
    Under the Distance Demonstration Program, participants may offer 
Title IV, HEA program funds to students enrolled in educational 
programs utilizing distance education delivery methods for all or a 
portion of their classes without being subject to certain statutory and 
regulatory provisions, which the Secretary may waive, upon their 
request. The purpose of these waivers is to test new ways of 
administering the Federal student assistance programs and to consider 
how the law and regulations might be altered to allow for expansion of 
aid to distance students and still ensure program integrity. In the 
first year of the program, the Secretary is authorized to select from 
among eligible applicants, up to a total of 15 institutions, systems of 
institutions, or consortia of institutions to participate in the 
program. (For these purposes, a system of institutions could be a group 
of institutions with a common governing board. An example would be a 
community college system or a group of private institutions owned by 
the same corporation. A consortia of institutions could be two or more 
institutions that have agreed to collaborate on a common effort such as 
sharing distance education courses or a two-year and four-year 
institution cooperating to offer a bachelor's degree completion 
    The Secretary anticipates that the institutions, systems or 
consortia selected will continue to participate for five years. 
Participation, of course, will be conditioned upon their meeting the 
requirements of the Distance Education Demonstration Program and 
continued participation in Title IV, HEA programs. Institutions 
desiring to withdraw from the Distance Education Demonstration Program 
may do so without jeopardy to their participation in Title IV HEA 
programs. Also, the scope of the participation, such as the specific 
distance education programs included and waivers provided, may be 
modified as agreed upon by the Secretary and the participant, to allow 
for changes in the programs offered, the modes of delivery used, the 
size of participants' distance programs, or other changes desired by 
the Secretary or the participant as experience is gained in the 
    The Department plans to administer this program through an 
implementation team consisting of staff from various offices within the 
Department. The Department recognizes the importance of identifying and 
addressing any problems that arise during the course of the 
demonstrations. It will facilitate communication among participants and 
will work with institutions to provide technical assistance throughout 
the demonstrations, beginning with the application process. 
Departmental staff with responsibility for monitoring compliance with 
Title IV program requirements will be well represented on the 
implementation team and will monitor compliance with the requirements 
of the Distance Education Demonstration Program.
    The Department also anticipates working closely with accrediting 
agencies and States to determine how their respective roles contribute 
to assuring quality and integrity. Accrediting agencies will play a 
substantial role in monitoring the demonstration programs, consistent 
with their responsibilities. Where State requirements are relevant to 
distance education programs, the Department will work with States to 
determine how their monitoring role assists in insuring program 
    The participants must agree to provide data and information that 
will assist the Secretary in evaluating the Distance Education 
Demonstration Program and in reporting to Congress as required by the 
statute. The data and information provided by participants will assist 
the Secretary in determining whether statutory and regulatory changes 
might be needed to support the growth of quality distance education 
courses and programs and the appropriate level of Federal assistance 
for students enrolled in distance education program, two of the 
purposes of the program that are specified in the statute. The 
Department will publish a separate notice in the Federal Register that 
will specify the data collection requirements for participants and 
request comment on the paperwork burden associated with these 
requirements. To the maximum extent possible, the Department will make 
the data requirements of this program consistent with already existing 
data collection requirements, thereby minimizing the burden on 
    The program is also designed to examine ways to assure the 
integrity of Title IV, HEA programs in the context of distance 
education. This examination will be accomplished principally through 
the close monitoring of participants' administration of Title IV, HEA 

Eligible applicants

    The following institutions are eligible to apply to participate in 
the Distance Education Demonstration Program:
    (1) Institutions located in the United States that participate in 
the Title IV, HEA programs;
    (2) Institutions located in the United States that provide a two-
year program that leads to an associate degree or a four-year program 
that leads to a baccalaureate or higher degree and would be eligible to 
participate in the Title IV HEA programs but for the fact that they do 
not meet one or both of the 50 percent rules; or
    (3) Western Governors University.
    In addition, systems and consortia of these institutions are 
eligible to participate in the program.

Statutory and Regulatory Provisions That May Be Waived

    The Secretary may waive statutory and regulatory provisions. To 
obtain a waiver, an institution must request the waiver in its 
application to participate in the program and must provide reasons for 
the waiver. Where possible, the applicant should suggest an alternative 
that is designed to meet the same objectives as those achieved by the 
waived statutory or regulatory provision. For example, if an applicant 
seeks to waive the requirement that students must achieve satisfactory 
academic progress as defined in the regulations, the applicant should 
suggest an alternative means to ensure that Federal student aid funds 
are provided only to students who are making progress towards a degree 
or certificate. An applicant need not include an alternative approach 
with regard to a request to waive one or both of the 50 percent rules.

Statutory Provisions

    The Secretary may waive the following HEA statutory provisions:
    * Section 102(a)(3)(A). This section makes an otherwise
eligible institution ineligible if more than 50 percent of its courses 
are offered by correspondence and telecommunication.
    * Section 102(a)(3)(B). This section makes an otherwise
eligible institution ineligible if 50 percent or more of its students 
are enrolled in correspondence or telecommunications courses.

[[Page 5706]]

    * Section 484(l)(1). This section defines a
telecommunications student at an institution as a correspondence 
student if 50 percent or more of the institution's courses are offered 
by correspondence or telecommunication.
    * The required minimum number of weeks of instruction
contained in section 481(a). This section provides that an academic 
year must require at least 30 weeks of instructional time.
    * The required minimum number of weeks of instruction
contained in section 481(b). This section provides that an eligible 
vocational program must be provided during a minimum of 15 weeks, or in 
limited circumstances, 10 weeks.

Regulatory Provisions

    In addition to the aforementioned statutory provisions, the 
Secretary may waive the regulatory provisions implementing part G of 
the HEA which inhibit the operation of quality distance education 
programs. Part G consists of sections 481 through 493B of the HEA. 
These sections contain numerous provisions dealing with the Title IV, 
HEA programs. In general, the regulations implementing these provisions 
are contained in 34 CFR part 668.
    (Under the Distance Education Demonstration Program, the Secretary 
is authorized to waive any regulations governing part F of title IV, 
which deals with need analysis and costs of attendance. However, the 
Secretary is not authorized to issue regulations implementing part F; 
therefore, there are no regulations to waive.)

Special Waivers for Western Governors University

    In addition to the waivers described above, upon the request of 
Western Governors University, the Secretary may waive statutory 
provisions contained in title I and parts G and H of title IV of the 
HEA that the Secretary determines to be appropriate because of the 
unique characteristics of Western Governors University. If the 
Secretary grants such a waiver, the Secretary will require the 
university to undertake actions that are necessary to ensure the 
integrity of the Title IV, HEA programs and the accountability of Title 
IV, HEA program funds.

Application Requirements

    Each application to participate in this program shall include--
    1. The name, address, and web site address, if any, of the 
institution, system, or members of the consortium seeking to 
participate, and the name, title, mailing and E-mail addresses, and 
telephone number of a contact person for the institution, system, or 
    2. A description of the distance education programs offered or to 
be offered for which the institution is seeking a waiver or waivers. An 
institution may request a waiver or waivers for one, several, or all of 
its distance education courses or programs. The description should 
include the types of programs, degrees or certificates offered, program 
goals, and the methods used or proposed to be used to deliver distance 
    3. A description of the applicant's consultation with a recognized 
accrediting agency or agencies with respect to quality assurances for 
the distance education programs to be offered;
    4. A description of the types of students that the distance 
education programs are intended to serve, (e.g., adult learners, rural 
populations, individuals with disabilities);
    5. The Title IV, HEA programs under which distance education 
students will receive funds;
    6. The statutory and regulatory provisions to be waived, the scope 
of each waiver, and the reason for each waiver. The applicant should 
propose an alternative to the provision(s) or explain why no 
alternative is necessary;
    7. An assurance that the institution, system, or consortium will 
fully cooperate with the ongoing evaluations of the program; and
    8. A statement of the goals of the institution, system, or 
consortium for participation along with the method the institution will 
use to evaluate achievement of the goals.
    In addition to the information described above, systems and 
consortia must provide the following additional information--
    1. A description of the system or consortium and the relationship 
among the members of the system or consortium, a copy of any agreement 
governing the relationship of institutions that are members of the 
system or consortium, and a list of the institutions which are members;
    2. A description of the manner in which the distance education 
programs are or will be conducted among the system and consortium 
members particularly as that manner is related to the waiver request; 
    3. The manner in which Title IV, HEA program funds will be 
administered to the students in the distance education programs.

Selection of Participants

    In selecting applicants to participate in the program, the 
Secretary will take into account the--
    1. Number and quality of applications received;
    2. Department of Education's capacity to oversee and monitor the 
applicant's participation;
    3. Applicant's financial responsibility; administrative capability; 
and the program or programs being offered via distance education; and
    4. Necessity of including a diverse group of participating 
institutions vis-a-vis size, mission, and geographic distribution.
    As part of the selection process, the Department of Education will 
screen the applications to ensure that applicants are eligible. Then, 
outside reviewers will recommend the best applications given the 
statutory criteria. The Secretary will make final selections, based on 
the recommendations of the outside reviewers and the criteria listed in 


    The HEA requires the Secretary to submit reports to Congress 
evaluating the Distance Education Demonstration Program annually and 
eighteen months after the initiation of the program. As specified in 
the Act, the evaluations are to include the following:
    1. The extent to which the institution, system or consortium has 
met the goals set forth in its application to the Secretary, including 
the measures of program quality assurance.
    2. The number and types of students participating in the programs 
offered, including the progress of participating students toward 
recognized certificates or degrees and the extent to which 
participation in such programs increased.
    3. Issues related to student financial assistance for distance 
    4. Effective technologies for delivering distance education course 
    5. The extent to which statutory or regulatory requirements not 
waived under the program present difficulties for students or 
    To assist the Secretary in conducting such evaluations, 
participants in the distance education demonstration programs will be 
required to provide information to the Secretary, such as: course level 
detail regarding their offerings, the degrees or certificates awarded 
for successful completion, data on persistence and completion, data 
regarding student demographics, information regarding tuition and fees 
charged by the participant, program

[[Page 5707]]

design and use of technology, information regarding the educational 
environment and student support, student satisfaction surveys, and 
average development costs for each field of study.
    Based upon the results of the evaluations during the first year of 
the program, the Secretary may select up to an additional 35 
institutions, systems of institutions, and consortia of institutions to 
participate in the third year of the program.


    The guidance provided below is intended to assist applicants in 
determining information they may wish to include in their applications. 
This guidance is non-binding and does not constitute criteria for 
selection. Applications which do not include the information suggested 
in the guidance will be considered on the same basis as applications 
which include all or part of that information.
    1. Applicants should consider describing the ways that they think 
their proposals will assist the Department in determining new ways of 
administering Federal student assistance programs that better meet the 
needs of distance students.
    2. It is important that the accrediting and State authorizing 
agencies of the institution, or institutions that comprise a consortium 
or system, are willing to collaborate with the Department to determine 
how their complementary roles can best be structured to assure quality 
and integrity in institutions' distance education programs. To this 
end, applicants for the program should provide documentation that their 
accrediting agencies and States are willing to work with the Department 
to examine the respective roles of the agencies as they relate to 
institutions' distance education programs. In that documentation, 
accrediting agencies should certify that the individual distance 
programs that the institution includes in its application are within 
the scope of the institution's accreditation, and that the agency will 
review the program at an appropriate time. To the extent that 
accrediting agencies evaluate a particular consortial or system 
relationship, the consortium or system's application should include 
similar information.
    3. While the Department will evaluate applications using the 
statutory criteria, to the extent possible, the Department will view 
those criteria in the context of the delivery of student aid to 
distance students and any changes that are needed to facilitate that 
process. Because the delivery of student aid is so critical to 
improving access to distance education, a good application would fully 
describe the applicant's ability to fully execute its plans and specify 
waivers requested and substitutions and address fully the need for the 
waivers and substitutions.
    4. Applicants should consider establishing both quantitative and 
qualitative objectives for their participation and include in the 
application a description of how they intend to measure goal 
attainment, including measures of program quality. The Department notes 
that quantitative measures are essential for understanding goal 
    5. A major concern of the Department is to insure that Federal 
funds in the Distance Education Demonstration Program are used 
appropriately. A good application will address how the applicant plans 
to document student eligibility, including documentation of attendance.

Electronic Access to This Document

    Anyone may view this document, as well as all other Department of 
Education documents published in the Federal Register, in text or 
portable document format (pdf) on the World Wide Web at either of the 
following sites:


To use the pdf you must have the Adobe Acrobat Reader Program with 
Search, which is available free at either of the previous sites. If you 
have questions about using the pdf, call the U.S. Government Printing 
Office toll free at 1-888-293-6498.
    Anyone may also view these documents in text copy only on an 
electronic bulletin board of the Department. Telephone: (202) 219-1511 
or, toll free, 1-800-222-4922. The documents are located under Option 
G--Files/Announcements, Bulletins and