A Victory in Persuasion for Online Attendance

The U.S. Department of Education (Department) today released a set of final regulations to improve reporting on distance education and changes related to how institutions of higher education (institutions) calculate the return of Federal financial aid when a student withdraws. Starting July 1, 2027, the final rules require institutions to report information into the National Student Loan Data System (NSLDS) about which students who received Federal financial aid are enrolled in distance education or correspondence courses. These data will help the Department better understand the outcomes and effectiveness of online learning.

The Department refined these final rules based upon extensive public comment on a notice of proposed rulemaking published over the summer. That package addressed topics in three areas: distance education, return of title IV funds when a student withdraws, and the Federal TRIO programs. In considering these comments, the Department decided to not move forward with a number of provisions in the draft rule to allow for greater additional study and consideration. These include proposals to adjust the eligibility for Federal TRIO programs, allow borrowers who never began attendance to repay amounts owed as a loan instead of a lump sum, and require online programs to take attendance.

It’s actually quite simple to understand if you look at the core misunderstanding that I believe ED has in its rulemaking. ED assumes that LMSs already have the information needed to take attendance and that schools merely need to create reports to be sent to the registrar or financial aid office. This assumption is wrong - unless an institution uses an LMS and no other EdTech tool (which is extremely rare) or has the clout to force all vendors to share private data (also rare), there is no mechanism today for third-party applications to send daily activity to the LMS in order to create an aggregated attendance report. It cannot be automated as assumed.

The net effect is that the only realistic way for most schools to follow the regulations is for somebody (mostly instructors) to be required to take attendance manually by looking at all tools being used in their course sections. When you add up all of this time for the new burden, that is how you get dozens of hours per day per institution.

An accurate withdrawal date is critical to ensure that the right amount of unearned title IV aid is returned, and students’ accounts are properly reduced. However, we are persuaded by concerns about the need for continued development in these tools to make them consistently effective for this purpose, including the need for system interoperability. As such, we will not be finalizing this provision to provide more time to evaluate technological changes that can better track student engagement. The Department will continue to monitor the state of this tracking and may revisit this issue at a later date.

This provision requires that an institution that is required to take attendance must, within 14 days of a student’s last date of attendance, document a student's withdrawal date and maintain the documentation as of the date of the institution's determination that the student withdrew. We reiterate that this is not a requirement that the student be administratively withdrawn or that an R2T4 calculation be completed at that time. If the student subsequently begins attendance within 30 days of the date of determination, then there is nothing further an institution must do as it relates to the R2T4 calculation (30 days) or the return of funds to the Department (45 days).