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D.C. Circuit Addresses Department of Education “Program Integrity” Rules

13 June 2012
On June 5 the U.S. Court of Appeals for the District of Columbia Circuit issued a decision that invalidates parts of the Department of Education’s “program integrity” regulations but for the most part upholds them.
D.C. Circuit Addresses Department of Education “Program Integrity” Rules

 The challenged regulations address incentive payments to student recruiters, misrepresentation in marketing and advertising, and state authorization.  Last July, a lower court struck down a provision that requires an institution to obtain state authorization to offer distance or correspondence education in every state in which the institution has students enrolled in such programs, if the state requires authorization. 

 Although the D.C. Circuit found additional deficiencies with the program integrity regulations, its ruling allows the Department to try to fix most of them.  It affirmed the district court’s decision on the state authorization regulation, which means the distance education requirement remains vacated while the remainder of the state authorization regulation remains in effect.  The appellate court effectively instructed the Department to fix aspects of the misrepresentation regulation that seem to allow the Department to take adverse action without procedural protections and exceed the scope of the underlying statute.  And the court vacated the misrepresentation regulation to the extent it could punish true and nondeceitful statements.  In addition, the court instructed the Department to explain better its decision to bar incentive payments based on graduation rates and to respond to comments regarding the incentive payment regulation’s potential adverse effects on diversity outreach.

 As a practical matter, the challenged regulations remain largely intact, and the Department will have an opportunity to address deficiencies, such as by issuing a new distance education state authorization regulation that meets notice and comment requirements.

Stephanie Gold

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