The proposed bill, known as the "Ensuring Distance Education Act," seeks to amend the Higher Education Act of 1965. The change it introduces affects the "90/10 rule," which currently mandates that for-profit institutions must receive at least 10% of their revenue from non-federal sources. The amendment specifies that non-federal money generated from distance education programs can be counted as part of this 10%, regardless of where these programs are conducted.

General Summary of the Bill

This bill aims to recognize revenue from distance education programs as part of the non-federal revenue required under the 90/10 rule. The objective is to ensure that proprietary institutions of higher education, commonly known as for-profit colleges, can include income from distance learning in their non-federal revenue stream. This amendment highlights the evolving landscape of higher education and acknowledges the increasing role of online education.

Summary of Significant Issues

One major issue with the bill is the potential for educational institutions to focus more on increasing enrollment in distance education programs simply to meet financial requirements rather than prioritizing educational quality. This focus could lead to a situation where the importance of quality education diminishes in favor of increased financial revenue.

Furthermore, the bill's language, "regardless of the location from which such program is carried out," may introduce ambiguity, particularly concerning compliance with state-specific education regulations. This could create enforcement challenges for both the institutions and regulators. Lastly, traditional in-person educational institutions might face competitive disadvantages, as they may not have the infrastructure or flexibility to switch to or expand into the distance education market as readily as others.

Public Impact

The potential expansion of distance education could offer increased access to higher education, providing opportunities for students who might prefer or need to study remotely. However, if institutions prioritize increasing enrollments over education quality, students' learning experiences might suffer, leading to broader concerns about the value of the degrees awarded.

From a consumer protection standpoint, students might need to be more vigilant about assessing the legitimacy and quality of the programs they enroll in, as institutions may layer marketing strategies to enhance enrollment numbers.

Impact on Stakeholders

Educational Institutions: For-profit colleges could benefit from increased flexibility in meeting federal revenue requirements. This opportunity might enable them to acquire more federal funding, bolster their financial stability, and expand their reach through online education. However, traditional institutions without strong online programs might struggle to compete.

Students: Learners could gain more educational options and accessibility, especially in remote areas or for those needing flexible schedules. But they also risk enrolling in programs that might not deliver promised outcomes if quality assurance is compromised.

Regulators and States: Effective monitoring and enforcement might become increasingly challenging. Ensuring compliance with nuanced state regulations on distance education could demand more robust oversight and clear guidelines from both federal and state governments.

Overall, while the bill aims to modernize and adapt financial rules to current educational trends, it also brings several potential issues that might need further consideration to ensure quality education remains a top priority.