BACKGROUND
In the summer of 2011 the US Department of Education implemented regulatory reforms in an effort to strengthen and improve the administration of the Title IV, Higher Education Act (HEA) programs. The revised regulations were intended to protect taxpayer investments in higher education and increase accountability and transparency.
The revised regulations have four major requirements: use of US Generally Accepted Accounting Principles (US GAAP) accounting standards, reporting of US Medical Licensure Examination (USMLE) scores, affiliation of foreign nursing school with a US hospital or Nursing School, and providing longitudinal evidence of gainful employment of US students pursing non-degree coursework (graduate certificates and diplomas).
The impetus for these reforms was the large investment made by the US government in guaranteeing loans and the increasing amount of loan defaults. In 2011 student loan debt surpassed national credit card debt in the U.S. and will reach over $1 trillion dollars in 2012. The total amount of due to be disbursed in annual student loans for FY2010-11 was $116 billion.
IMPACT OF REGULATIONS
Many Australian universities are finding that the more stringent requirements are proving to be a significant barrier to accepting American international students with a US government loan. Australian universities have responded in variety of ways which is resulting in reduced numbers of students.
New Zealand universities are expressing similar concerns.
The impact of these changes has occurred in the southern hemisphere first due to the different academic calendar but is coming to the north hemisphere in the next few months as many more foreign schools in Canada, Ireland, UK and other countries prepare for the 2012-2013 year.
As indicated in a recent article published in The Chronicle of Higher Education, several hundred colleges in Britain may soon be prevented from participating in the U.S. federal direct-loan program because of a technicality of the new US regulations that requires the actual college and not affiliated university to be the degree granting body. (The Chronicle of Higher Education, Under new education department rules, American students at many British institutions may be ineligible for US loans. Available at: http://chronicle.com/article/Under-New-Rules-American/130102/)
WORKING TOGETHER
AEI has been working to seek ways to reduce the impact on international education opportunities for US students with institutions from Canada, Ireland, New Zealand, Spain and the UK and in ongoing consultations with the U.S. Department of Education and the International Education Council.
In an initial response to concerns raised by international institutions and AEI, the US Department of Education has stated that its intent was not to cap the amount of foreign schools eligible to receive US Title IV funds nor limit the number of US students able to study abroad. Instead the revised regulations were designed to protect US students and taxpayer funds.
In mor recent communications the US Department of Education provided further information as to its limited authority to modify provisions surrounding U.S. Generally Accepted Accounting Principles (GAAP) but confirmed that the US may adopt international accounting standards in 2016. Furthermore, it remained hopeful that sometime in the first half of 2012 it may be able to implement non-specified changes to the general provisions governing student aid programs.
AEI is also working with international institutions to consider participation in the public hearing and proposal process preceding the Congressional reauthorization of the Higher Education Act. Current authorization for the programs in the Higher Education Act expires at the end of 2013. However, this process is lengthy and consultations are continuing with the relevant government organisations.
ONGOING EFFORTS
AEI continues to liaise with Australian universities to monitor the impact of the changes to the regulation. In concert with education counsellors from other Embassies in Washington DC, AEI is also working to inform and engage other US government departments and agencies as well as US international education peak bodies to raise awareness of this issue.
For more information, please contact the AEI North America team.
Other ‘”Column 8” Reports
Quality Counts 2012 Report
Now in its 16th annual installment, the national report, published by Education Week, continues the tradition of tracking key education indicators and grading the states on their policy efforts and outcomes. This year’s special theme—American schooling from an international perspective—examines the nation’s place among the world’s public education systems and provides a fresh look at the political, social, and cultural challenges the United States faces in preparing its students for the workforce demands of an interconnected world economy.
Quality Counts 2012 is available at: http://www.edweek.org/ew/qc/2012/16src.h31.html?intc=mrs
Top Higher Education State Policy Issues 2012 Policy Brief
The American Association of State Colleges and Universities recently presented their annual analysis of the top ten issues facing Higher Education in the United States. Included are issues such as state operating support for public higher education, productivity, performance-based funding, tuition policy, Veterans education and immigration policy.
Top 10 Higher Education State Policy Issues for 2012 is available at: http://www.congressweb.com/aascu/docfiles/AASCU_Top_Ten_Policy_Issues_2010.pdf