According to a press release from the Department of Education, the Biden-Harris Administration has announced new regulations aimed at enhancing oversight and accountability for institutions of higher education and strengthening consumer protections for student borrowers. These regulations are set to take effect on July 1, 2024.
According to the press release, the Biden-Harris Administration has finalized new regulations set to take effect on July 1, 2024. U.S. Secretary of Education Miguel Cardona stated, "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 focus on four key pillars: financial responsibility, administrative capability, certification procedures, and the ability to benefit. These measures will enable the Department of Education to secure financial protections, such as letters of credit, from colleges that exhibit financial risks. This will provide a safety net against the impact of sudden institutional closures.
In addition, educational institutions will be required to offer clearer and more comparable information about financial aid, distinguishing between scholarships and loans that require repayment. Colleges showing signs of risk will be subjected to additional conditions, including the requirement for a teach-out plan and limitations on expanding new programs and locations. These safeguards are designed to protect students and taxpayers.
The new regulations also create clearer pathways for students without a high school diploma to access federal student aid, expanding opportunities for postsecondary education.
These regulations are part of a suite of reforms initiated by the Biden-Harris Administration. Previous actions include revitalizing the gainful employment rule and providing $127 billion in relief for nearly 3.6 million students.
The Department of Education emphasizes that these regulations mark a significant advance in ensuring that students' investments in higher education are adequately protected from risks such as abrupt college closures, excessive debts, and subpar educational services.
