The Biden-Harris administration announced new regulations this week that will strengthen oversight and accountability for higher education institutions and bolster consumer protections for student borrowers.
The new rules, which will go into effect on July 1, 2024, enhance the U.S. Department of Education’s ability to safeguard students and taxpayers by preventing colleges from withholding federally funded course credits from transcripts and ensuring clear communication of financial aid amounts.
The regulations target abrupt college closures, particularly at private for-profit institutions, which have left students stranded and taxpayers responsible for discharged student loans. They address issues related to program quality, licensure requirements, and career services that hinder students’ employment prospects.
“Too many students have been abandoned by shady colleges that close their doors and leave borrowers with unaffordable debt and little hope of completing their educational journeys and embarking on rewarding careers,” said U.S. Secretary of Education Miguel Cardona in a statement. “With these final rules, the Biden-Harris Administration is fixing a broken system, which failed to protect students and families, and addresses abuses in higher education that have cost taxpayers billions of dollars in recent years.”
The new regulations cover four key areas: financial responsibility, administrative capacity, certification procedures, and ability to benefit. The financial responsibility point establishes indicators that allow the department to swiftly secure financial safeguards when colleges exhibit financial risk.
The rules mandate that institutions provide more transparent information about financial aid, prevent colleges from withholding transcripts for courses funded by federal money, require adequate career services, and limit the employment of individuals with a history of mismanaging federal student aid programs.
The regulations’ third aspect allows the department to set extra conditions for institutions showing warning signs, such as mandating a teach-out plan or restricting new programs and sites. The final point clarifies the process for students without a high school diploma to obtain federal aid, enhancing postsecondary access.
These changes align with the administration’s broader efforts to hold colleges accountable, provide financial value to students, and make higher education more accessible. They come in addition to the revitalized gainful employment rule, relief for millions of students, increased Pell Grants, and proposals for tuition-free community college and assistance for historically Black colleges and Minority-Serving Institutions, all aimed at expanding educational opportunities and reducing student debt.
