Online Education and Federal Funding: When Is a Class Actually a Correspondence Course?

Picture1By Brittany Taylor

On September 21st, 2017, the Inspector General for the Department of Education released an audit of Western Governors University (WGU), a non-profit, primarily online university that has been using technology to further higher education for twenty years. The Inspector General’s findings indicated that WGU does not provide the “regular and substantive contact” between students and teachers required by The Higher Education Act, making its classes what are called “correspondence courses,” which are ineligible for federal funding. Moreover, the inspector general has recommended that WGU repay all funding received over the last several years, which would total over $712 million. Western Governors University contests these findings vehemently, and supporters of the school have come out of the woodwork to praise the WGU’s unique educational model as well as the above average outcomes its students enjoy.

Online education has been a rapidly changing and growing field, both in high schools and on college campuses. The Higher Education Act, enacted in 1965, has not been updated to account for technological changes in education technology. It also applies outdated rules to modern programs, despite making other updates during reauthorization periods. In the case of WGU, students who (1) watch lectures digitally (sometimes in real time), (2) complete the same assignments as students in a brick-and-mortar classroom, and (3) communicate with professors by phone, email, and assignment feedback, have been found ineligible for federal funding under the same rules that made mail-in correspondence courses of the 1960’s ineligible. Specifically, these types of contacts were not considered “regular and substantive” enough to meet Title IV requirements to receive federal funding for the school. However, the Department of Education has not issued guidelines to assist schools in meeting the “regular and substantive contact” with teachers requirement, according to Jamie Merisotis, director of the Lumina Foundation, leaving institutions like WGU to use their best judgement in attempting to meet it.

One response to these findings is a movement to update the language in the Higher Education Act to better adapt and account for current technology and research regarding what types of education are effective. A house bill has been proposed to help update the statutory and regulatory framework behind online learning. The Advancing Competency-Based Education Act of 2017, HR 2589, is currently receiving bipartisan support and will, if passed, update the Higher Education Act of 1965 language to be more accommodating of modern technology and educational models like WGU’s.

Meanwhile, WGU is awaiting the Department of Education determination regarding these findings. It is entirely possible for the Department of Education to decline to act upon the results of the audit, effectively punting the question to some later date. Even if the audit is not acted upon, though, the findings send a chill through innovative education models that rely upon government funding.

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