A set of new regulations and conditions were issued by the Biden Administration, which colleges and universities must comply with when seeking approval for financial aid. The most prominent conditions included as new rules pertain to gainful employment, regardless of whether the financial aid is part of a state authorization or of a reciprocity agreement. This particular requirement will apply to all types of financial aid programs.
Prominent New Requirements and Conditions for Financial Aid Regulations
Consumer Protection Laws – One of the new conditions included a proposed requirement by the Education Department, for colleges and universities to include consumer protection laws.
State Reciprocity Agreement – In addition, the Education Department also submitted a proposal for educational institutions to collaborate by way of a joint state reciprocity agreement.
The agreement will allow online students to receive federal financial aid from the state where the educational institution is located. At the same time allow the online students to bypass some of the state requirements if the educational institution has a reciprocity agreement with the state.
Officials at the Education Department said that the new regulations and conditions intend to establish a more rigorous process that will give students and taxpayers better protection. According to the Department, 49 states and the District of Columbia as well as Puerto Rico and other territories, have signed up for the voluntary agreement. Absence of a reciprocity agreement will constrain institutions to seek authorization from every state for each online student they will accept for enrolment in their institution.