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            The Department’s experience working with participants has provided insight into the ways that current laws and regulations governing Title IV student financial assistance programs may inhibit institutions from designing programs that afford maximum flexibility for students and accommodate innovative instructional approaches.  In addition to the requirements relating to the amount of distance education an institution may provide, and the requirements relating to time, the lack of consistency across the student financial aid programs make it difficult for institutions to effectively manage the Federal student aid programs when they offer programs in other than standard terms or in a mix of term structures.


The Department has uncovered no evidence that waiving the 50% rules, or any of the other rules for which waivers were provided, has resulted in any problems or had negative consequences.  Three years of experience working with the demonstration program participants indicates that the potential risk to Title IV student financial assistance programs has more to do with the financial viability and administrative capability of the institution than with the mode of delivery in which the education is offered.


Based upon the experience gained to date through the demonstration program, and the trends that are evident in the development of distance education generally, the Department recognizes the need to amend the laws and regulations governing Title IV student financial assistance in order to expand distance education opportunities.   The demonstration program has been an excellent vehicle for developing and testing new approaches, and its participants have devised some very interesting models. 




            The Distance Education Demonstration Program was authorized by Congress in the 1998 reauthorization of the Higher Education Act of 1965 (HEA) in section 486.  The purpose of the demonstration program is to: (1) test the quality and viability of expanded distance education programs currently restricted under the HEA; (2) provide for increased student access to higher education through distance education; and (3) help determine the most effective means of delivering quality education via distance education, the specific statutory and regulatory requirements that should be altered to provide greater access to distance education and the appropriate level of Title IV student financial assistance for students enrolled in distance education programs.

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