The Advisory Committee on Student Financial Assistance (Advisory Committee) was created in the Higher Education Amendments of 1986 to act as an independent body to offer advice and make recommendations regarding the maintenance of federal programs outlined in Title IV of the Higher Education Act (HEA) of 1965. The Title IV programs are targeted towards students who demonstrate need based on family income, and who are enrolled at least half-time in an undergraduate degree or certification program. The Committee was charged by the Congress to make recommendations that will result in the maintenance of access to postsecondary education through Title IV programs.

The overall purpose of the Title IV programs was strongly reaffirmed in the reauthorization of the Higher Education Amendments (HEA) of 1998. Both Congress and the higher education community concluded that the programs work well at meeting access goals and would benefit from greater funding, not restructuring. Nonetheless, late in the reauthorization process some determined that distance education and its relationship to federal student aid needed further examination. In response, Congress implemented the Distance Education Demonstration Program.

In the 1998 reauthorization of the Higher Education Act, the Advisory Committee was mandated to evaluate the implications of distance education for student eligibility for financial assistance and related policies that include access to higher education, program integrity, and institutional integrity while access to on-campus instruction is maintained. Congress is concerned with providing room for technological innovation while protecting the integrity of Title IV programs.

In keeping with our charge, the Advisory Committee first addressed the implementation of the Distance Education Demonstration Program at our January 1999 meeting. In this meeting, the federal role in distance education and the nature of the Distance Education Demonstration Program were discussed. In our April 1999 meeting, concerns about distance education and the crucial factors involved in creating federal policy for distance education were discussed. As a result, recommendations were made to assist in preserving program integrity and access for Title IV programs.

This paper discusses the Committee's findings as regards the Distance Education Demonstration Program since the Committee's last meeting in April 1999.

INTRODUCTION

Federal student aid policy has been focused on maintaining and improving access for low- and middle-income students for over three decades. Thus, the Title IV student aid programs have been heavily targeted at students who demonstrate need, are enrolled at least half-time, and working towards an undergraduate degree or certificate. To ensure program integrity and quality and to protect consumers, the programs have relied on the triad of state licensing, accreditation and federal institutional eligibility standards.

The Higher Education Amendments of 1998 (HEA), "authorizes the Secretary to exempt carefully selected institutions from provisions in the HEA which inhibit their ability to offer distance education successfully. In these controlled circumstances, the potential of distance education can be tested without unduly increasing the risk of fraud and abuse." The purpose of the Distance Education Demonstration Program according to Section 486(a) of the Higher Education Amendments of 1998 is to:

• aid the Department of Education (ED) in testing the quality and viability of an expansion of distance education programs;

• provide increased student access to higher education through distance education;

• determine the appropriate role of federal assistance to students in distance education programs;

• determine the most effective means of delivering quality education through distance education; and

• to determine how regulatory and statutory requirements may need to be altered to allow access to quality distance education.

Participation is limited to institutions that are Title IV eligible. This can include two- and four-year degree-granting institutions or consortia that would be Title IV eligible except for the fact that over 50 percent of their programs are offered by correspondence, or more than 50 percent of their students are enrolled in correspondence courses. Secretarial waiver authority for all participants is restricted to provisions related to computer costs, weeks of instruction, percentage of courses offered via telecommunications, percent of students enrolled in such courses, and eligibility requirements.

The number of participants is limited to 15 in the initial year, and may be expanded to no more than 50. The applicants will be selected based on financial responsibility and administrative capability, the distance education programs offered, and the size, mission and geographical distribution of the institutions.

The Secretary is required to evaluate student access and outcomes, financial assistance issues, and policies that impede development of distance education. An initial report is due 18 months after enactment, with annual reports thereafter. Also, the Secretary must assure compliance with the statutory requirements not authorized to be waived, provide technical assistance, monitor fluctuations in student enrollment, and consult with appropriate state authorities and accrediting agencies or associations.

A draft Notice Inviting Application for Participation in the Distance Education Demonstration Program was issued on December 1998. A final notice was issued in February, with a deadline for accepting applications on April 1, 1999.

ED announced the 15 participants in July for activity beginning the 1999-2000 academic year (see Exhibit A). Originally, specific waivers for each institution were to be finalized by early August. This schedule has been delayed significantly, and only 11 of the 15 participants' waivers have been finalized and a draft revised program participation agreement (PPA) completed.

This paper is limited to a discussion of the 11 participants for which the Advisory Committee has received copies of PPAs and applications to participate. The selection of specific waivers and modifications to the PPA turned out to be a much more complicated task than ED had originally anticipated-particularly for consortia agreements. The initial assumptions about the scope of the demonstration program have been modified, and this has influenced the waivers granted. This paper includes a discussion of the waivers requested and granted and a summary of the educational program, enrollment patterns, and type of students for these 11 participants.

THE ADVISORY COMMITTEE'S ACTIVITIES

From the standpoint of Congress and the Advisory Committee, two principles are of paramount importance in fashioning an appropriate federal role and policy interest in distance education as it relates to Title IV student assistance:

• the maintenance and enhancement of access to postsecondary education for low- and middle-income students; and

• The preservation of program integrity.

That is, at a minimum, any changes in the federal rules governing student and institutional eligibility should do no harm to either access or integrity; and the burden of proof is on those proposing the change.

The Advisory Committee is especially interested in three areas: first, a careful assessment of the full range of distance education activities that are ongoing and feasible without any changes to the existing rules; a specific determination of the need for each proposed change and its likely effects; and a systematic evaluation of the costs and benefits of the change. In other words, the mere fact that an exemption from a rule is sought by a particular institution does not necessarily mean that the exemption is required by institutions in general or that it is in the best interests of higher education or the taxpayers.

At our April 1999 Committee meeting in Oxford, Mississippi our discussions with leading distance education providers and other higher education leaders led to a consensus that there are many issues related to distance education that call for care and restraint in the development of federal policy. There is concern that distance education quality is unproven; there is potential for fraud and abuse if existing standards are relaxed; and there are significant implications for access in terms of cost and targeting of need-based aid. However, we have many more questions than answers, insufficient data as regards distance education, and a sense that there is much more that needs to be known. These are thorny, difficult issues and we urged ED to proceed cautiously in our comments on the Notice of Proposed Rulemaking demonstration program evaluation requirements.

We found that most existing distance education programs can and do benefit significantly from federal student assistance.

• Leading distance education providers are concerned with maintaining quality and program integrity and would prefer to modify their programs to meet existing federal eligibility rules than advocate for changes that might encourage fraud and abuse.

• Any changes that are required are most likely to be technical and regulatory, not policy altering and legislative.

• Distance education programs appear to be primarily, but not exclusively, focused on adult students who have at least two years of postsecondary education and some work experience; and are not designed with the Title IV student aid target population in mind.

• There is a general consensus that the most critical federal policy issues relate to virtual institutions--which are in their infancy.

In light of this concern, the demonstration program evaluation is of critical importance, and must be more than merely descriptive of the type of program, technology and student participating in distance education. Primarily, the demonstration program must demonstrate that access and program integrity are not compromised by the waivers granted, supported by comparable data across demonstration projects. Additionally, we recommended the data collection methodology be structured to support analysis of critical policy issues, such as:

• The characteristics of students that are most effectively served by distance education, and how to encourage students to attend programs that best meet their academic needs;

• The budgetary impact, both in terms of the institutions and students involved in the demonstration program and its eventual extension to distance education broadly;

• The implications of the application of these waivers to all institutions and students in higher education beyond the distance education context;

• Current state licensing, accreditation and institutional eligibility processes or other mechanisms that are being put in place to ensure consumer protection, quality and program integrity; and

• Gatekeeping issues for institutions that may not meet criteria to participate in the program, but would have significant implications for program integrity--particularly to avoid correspondence school fraud and abuse scandals that have occurred in the past.

We found that many distance education programs are eligible to participate in the Title IV programs now suggesting that the evaluation should distinguish restrictions to aid eligibility--if any--by institution program, student and mode of delivery.

Furthermore, we recommended the scope of the evaluation should be broader than the schools that request waivers to effectively address the issues and concerns presented. Ideally, the evaulation should include a control group of distance education schools that are not participating in the demonstration program. At a minimum, the evaluation should include a component that looks at key issues across demonstration and non-demonstration programs. Additionally, it should provide information on availability of Title IV aid and other resources, including institutional aid both from institutions granted waivers through the demonstration program and other institutions providing distance education without such waivers.

Finally, ED must provide assurances that it has the appropriate resources--personnel and systems--to adequately monitor administrative capability and financial responsibility of distance education institutions.

ED ACTIVITIES

Since the last Advisory Committee meeting, ED has focused on the following activity related to the Distance Education Demonstration Program:

• The selection of demonstration program participants.
• Granting waivers and modifying institutional program participation agreements.
• Developing monitoring plans for each of the institutions.

Additionally, ED wants to develop training programs on aid eligibility for distance education for institutions that are not participating in the demonstration program. ED has identified the need for this information based on exchanges with institutions during the application phase of the demonstration program. However, this training is not formally part of the demonstration program and is a lower priority.

Approximately 40 institutions or consortia applied to participate in the demonstration program. Many of the more well known distance education programs elected not to apply to participate including Old Dominion University, Regis University and Dallas Community College District. In general, the selected participants have only recently instituted distance education degree programs.

The selection process consisted of two rounds of readings by distance education and financial aid experts, an in-depth review of administrative capability and financial responsibility, and then a consensus selection of the final 15 participants. Of the 26 applicants that were selected after the first reading, three were rejected for failing to meet the financial and administrative thresholds.

Waivers

In general, there are three main areas of waivers that were granted to the participants, "fifty percent" waivers, asynchronous waivers and specific waivers, requested to waive the regulation(s) that applied to a particular institution's program or perceived needs (see Exhibit B). With the exception of Western Governors University (WGU), the waivers have a narrower scope than originally anticipated. After a detailed review of program applications and gaining knowledge on distance education, ED determined that there was inadequate information to justify more waivers at this time. The distance education degree programs in the demonstration are relatively new. Additional waivers may be considered as the distance education programs mature and the need for more waivers is necessary.

Fifty percent waivers

To protect students, there are restrictions in the HEA on the types of institutions eligible to participate in the programs. Institutions must be accredited, licensed and offer degree programs. In addition to other institutional eligibility requirements, no more than 50 percent of classes may be offered through correspondence and no more than 50 percent of students may be enrolled in correspondence courses. These restrictions were added in response to fraud and abuse of correspondence schools in the early eighties. Prior to these rules, some of the most disadvantaged students were victims of fly-by-night schemes leaving them with high debt levels and no education, creating a series of default problems. Since these controls were added to statute, loan defaults have dropped from a high of 22.4 percent to the current level of 8.8 percent.

All demonstration program participants-but not all institutions within a consortium-- received the following waivers to ensure institutional eligibility:

• Section 102(a)(3)(A) of the HEA; 34 CFR 600.7(a)(1)(i). These provisions make an otherwise eligible institution of higher education ineligible if the institution offers more than 50 percent of its courses by correspondence.

• Section 102(a)(3)(B) of the HEA; 34 CFR 600.7(a)(1)(ii). These provisions make an otherwise eligible institution ineligible if the institution enrolls 50 percent or more of its students in correspondence courses.

• Section 484(l)(1) of the HEA. This provision defines a telecommunications student as a correspondence student if 50 percent or more of the institution's courses are offered by correspondence or telecommunication.

These three provisions-known as the 50 percent waivers--allow demonstration program participants and their students to remain eligible for Title IV student financial assistance if they exceed these limits. WGU-which is a completely virtual university-needs these waivers to be eligible for Title IV aid.

Although all participants did not request the 50 percent waivers, they were granted waivers as a standard measure. For example, New York University and Florida State University did not request the 50 percent waivers, but received them as well. There is no alternative control on program integrity to replace the 50 percent waivers, therefore, the participants will be monitored closely by regional teams with expertise in institutional participation and oversight.

Actual enrollments in both distance education and on-campus courses will be reported each year. Additionally, baseline data starting fall 1999 will be reported by each of the participants. None of the schools are close to the 50 percent threshold at current enrollments. Southern Christian University is the closest at 30 percent distance education enrollment, and, of course, WGU at 100 percent distance education.

Six participants received these additional two waivers for schools offering asynchronous instruction:

• Section 481(a), (b), 34 CFR 668.2(b) of the HEA to the extent that they relate to the minimum number of weeks of instruction required in an academic year and an eligible program.

• 34 CFR 668.8(b)(2). This provision defines "week of instruction."

These waivers were granted to Quest-American Institute of Commerce and Hamilton College, Florida State University, Connecticut Distance Learning Consortium (CTDLC), New York University, the University of Maryland University College (UMUC), Western Governors University (WGU), and Brigham Young University (BYU). BYU is part of the Latter Day Saints Church Education System and is the only institution in that consortium to be granted waivers under the demonstration program. The waivers provide administrative flexibility to provide financial aid to distance education courses that may have variable start and completion dates and may be non-term based. As an alternative, these institutions will measure student progress on either a six-month or academic year basis.

Specific waivers are waivers outside the scope of the standard 50 percent waivers and the asynchronous waivers. These are regulatory waivers that are particular to the educational program or consortia arrangement of the participant, and are granted if the applicant demonstrates the ability to administer the waiver. For the most part, all of WGU's specific waiver requests were granted. For other participants--except BYU, UMUC and WGU--requests for specific waivers were denied. ED determined that the applicants did not adequately address either the necessity of the waiver, the alternative measures, or administrative capability to justify granting the waivers requested. ED will reconsider some of the eligible waivers as the distance education program matures and if it becomes evident that additional waivers are required.

BYU, UMUC and WGU were granted a waiver for the "definition of a full-time student" which precludes a correspondence student from being considered a full-time student for purposes of receiving Title IV aid.

WGU has presented a unique profile as a demonstration program participant. The requirements that WGU be accredited by a recognized accrediting agency and that an institution itself provide an educational program in order to qualify as an eligible institution have been waived.

Additionally, WGU has been granted a waiver that restricts the number of courses that a student can take from ineligible organizations or unaccredited educational institutions. Under current regulation, not more than 50 percent of an eligible program can be offered by an ineligible or unaccredited organization affiliated with the degree-granting institution. WGU has affiliations with several ineligible organizations or unaccredited schools such as, Novell, International Thompson Publishing, Microsoft and Jones International University. With the waiver, more than 50 percent of a program can be provided through these affiliates and the program will be eligible for Title IV aid. As an alternative to the waiver, aid cannot be disbursed to the student until WGU notifies ED that the program exceeds the 50 percent limitation and ED agrees that the program is eligible.

WGU does not measure academic progress in weeks or hours, but will use domain assessments as the measurement by which students progress towards completion. The goal is to replace all waivers that reference time and hours with alternative performance measures. Regulatory waivers were requested and granted for student aid eligibility based on enrollment status, payment period, eligible programs and satisfactory academic progress that have a time component.

As an alternative, enrollment status will be determined by the length of a student's "Academic Action Plan" for completion of study. For example, an associate's degree is expected to take 24 months to complete, a student is considered at least half-time if the action plan is less than 48 months in length. WGU will disburse funds incrementally and on demand as expenses are incurred not to exceed the scheduled award. Student aid eligibility is limited to direct costs. Additional aid eligibility will be advanced after the student successfully demonstrates competency of the material listed in the action plan. Satisfactory academic progress will be based on six-month progress reviews documented by an advisor/mentor.

Waivers not granted

Several of the participants requested waivers that were not granted to any institution, because the requested waivers were statutory waivers outside the scope of the demonstration program. An example of statutory waivers that were requested are extending aid eligibility to less-than-half-time students and allowing community colleges to disburse aid to distance education students enrolled in a bachelor's degree program.

Some of these requests to waive statutes are not reflected in the actual proposals, but were negotiated with the department through conversation or other informal means. Two such examples are WGU's request to waive the federal loan limits and Masters Institute's request for a waiver relating to default-rate limits. ED's representative negotiated these requests with these institutions, deciding to deny the waiver but help the schools to formulate an acceptable waiver to meet their needs.

A chart of all the waivers that were requested in the proposals is included in Exhibit B. The waivers that were granted are highlighted in this figure.

Program participation agreements

The program participation agreements (PPA) are in draft and none have been signed. PPAs are the legally enforceable documents that determine the guidelines for school performance to participate in the Title IV programs. However, the draft agreements-with the exception of WGU-do not specify the alternative measure of performance that will be used to replace the regulation waived. Instead, ED will rely on its monitoring plans to identify potential problems. This may have implications for the ability of the demonstration program to be used to develop alternative regulations to existing regulations.

Monitoring Plans

The Case Management Regional Offices under the general schools managers (formerly in Institutional Participation and Oversight (IPOS)) are developing monitoring plans for participating schools in their region. The monitoring plans will include site visits, review of data that exist currently in ED systems, and developing methodologies on how to use data that are collected from schools.

The HEA requires ED to report to Congress annually on the results of the Distance Education Demonstration Program. The statute specifies what areas are to be reported, such as the progress of the participation in distance education and the types of students enrolling in distance education programs. Additionally, participants are required to collect and report data annually. ED is finalizing the data collection instrument and is awaiting approval to release the Federal Register Notice. ED anticipates that the reporting and review will be specific to each participant and that there will be little, if any, data that can be aggregated to the entire demonstration project.

ED will need to review its internal systems and processes to determine that it can provide adequate oversight to the Distance Education Demonstration Program and effectively administer the waivers. ED should consider the financial aid delivery of the participants and the impact on application, delivery and recordkeeping at ED.

PARTICIPANT PROFILES

The following are descriptions of the participants for which the Advisory Committee has received a copy of the program participation agreement and application to participate in the demonstration program.

Connecticut Distance Learning Consortium

The Connecticut Distance Learning Consortium (CTDLC) consists of the Connecticut State System, some independent colleges, technical-community colleges and the Connecticut State Department of Education's adult programs. This consortium was created in 1996 to provide a single point of reference for distance education offered by public institutions in Connecticut. There are 28 schools participating in CTDLC. Of these schools, 23 will be participating in the Distance Education Demonstration Program: one independent college, nine state universities and 12 community-technical colleges. These institutions have accreditation from the New England Association of Schools and Colleges. The Board of State Academic Awards governs CTDLC.

The CTDLC plan promotes a system where classes are offered from its various members. The primary mode of instruction is web-based classes. The provider used to coordinate the distance education classes is "Real Education." The classes are organized to eliminate duplication among the 66 courses that are offered through CTDLC. An associate's or bachelor's degree can be earned through Charter Oak State College using the Charter Oak's courses and those of other CTDLC institutions. The University of Bridgeport, another member of CTDLC, began offering the Masters of Nutrition on-line in 1997. Teikyo Post University offers an on-line associate and bachelor's degree in Management, a bachelor's degree in Integrated Business and a bachelor's degree in Management Information Systems.

The targeted groups of CTDLC's distance education program are adult learners and underserved populations. A student has to be enrolled in one of the member universities in order to be considered full-time. By the spring of 1999, there were 1,204 students enrolled in the distance education classes of the consortium.

Financial aid administration will be campus-based. In order to facilitate the sharing of student financial data among the member schools, the consortium aims to create a Financial Aid Clearing Center (FACC) to link the financial aid records of the distance education students.

CTDLC requested a waiver of the definition of an eligible program, two of three 50 percent waivers, the definition of an eligible student, student enrollment status provisions, the definition of an academic year, and a waiver to redefine how cost of attendance is determined. The three schools that grant degrees through CTDLC's distance education program were granted the three 50 percent waivers. In addition, two other waivers were granted relating to the number of weeks of instruction needed to fulfill an academic year and the definition of "weeks of instruction."

The Latter Day Saints (LDS) Church Education System consortium consists of Brigham Young University (BYU), Ricks College, LDS Business College and BYU-Hawaii. The oldest institution is BYU, a four-year university founded in 1874. Ricks College is a junior college founded in 1914, and BYU-Hawaii is a four-year college founded in 1954. LDS Business College and BYU are located in Utah, while Ricks College is located in Idaho. All the institutions are accredited by the Northwest Accrediting Commission, with the exception of BYU-Hawaii which is accredited by the Western Association of Colleges and Schools.

There are a total of five degree-granting programs offered through the LDS Education System. BYU is the largest of all the institutions, enrolling 31,000 undergraduates on-campus. BYU offers the Bachelors of General Studies through the Division of Continuing Education. They have been offering distance courses since 1921 via paper and pencil correspondence courses. These classes were considered independent study courses, now termed distance education courses. The enrollment in independent study courses consists of both college and high school students with an average annual enrollment of 13,000 students. Ricks College will offer a two-year associate and BYU-Hawaii is planning to offer on-line English as a second language classes. LDS Business College is still developing their web-based program to offer classes that will be incorporated into the distance education roster. A web-based class is going to be mandatory for all students throughout the LDS system by fall 2000.

The LDS Church Education System targets a wide population of students for their distance education programs. Seventy-five percent of students in the distance education program are students who were once enrolled in the LDS traditional system, but never earned their intended degree. Other targeted groups are the disabled and homemakers. The program is also intended for students in the LDS system engaged in semester-away assignments. There are about 600 students enrolled in the web-based program. Their average age is 36.

The LDS system currently participates in the FFEL and Pell Grant programs. The "Financial Path to Graduation" is a required on-line consultation that all students must have outside of the entrance and exit interview.

The LDS consortium requested six waivers. All three 50 percent waivers were requested while there were also requests to waive the definition of an academic year, award year and full-time student. These waivers were granted with the exception of an award year defined as the period beginning July 1 of one year, and ending June 30 of the following year. BYU, as the only degree granting institution among the distance programs received a total of six waivers. The other institutions in the consortium will have to submit reports and data to ED since their courses will contribute to the distance degree program for BYU. Further waiver considerations will be conducted as the other Web-based degree programs are developed.

Florida State University

Florida State University (FSU) is a four-year public institution accredited by the Southern Association of Colleges and Schools. The main campus is in Tallahassee, Florida. FSU began offering distance education courses in 1987.

The distance education program is targeted towards "place-bound," part-time students or persons whom for any number of reasons cannot attend college on a traditional campus. In order to qualify for admissions, they must hold an associate degree. There are three components to their distance education program. There is a residential component where training is provided on web-based courses for traditional students and faculty. Another approach is developing distance courses that minimize face to face contact for distance learners and finally, there is the development of entire distance education programs.

Florida State University also supports bachelor completion after community college through their distance education program. This program is referred to as a "2+2" program: two years for an associate's at the community college campus and then two more undergraduate years to complete the bachelor's degree via distance education. Students who graduate from a Florida community college are guaranteed admission to a state university. Out of the 28 community colleges in Florida, 14 community colleges participate in the 2+2 program with FSU. The community college's role is to grant the associate's while serving as the learning center for the distance education students where they can meet with their 2+2 mentor. All distance education students are matched with a mentor, given on-line academic advising and career placement assistance.

The three program areas offered are in liberal arts, information studies and communication and information studies. Through their distance education program, FSU offers a Bachelor of Science in Nursing, a Masters in Information Studies, a Masters of Open and Distance Learning and a Masters in Criminal Justice. FSU has teamed up with the British Open University (a British distance-education university) to offer the Masters in Distance Learning.

FSU requested two waivers, one for the definition of an academic year and one for eligible institutions. Though these waivers were not granted, FSU was granted the three 50 percent waivers.

University of Maryland University College

The University of Maryland University College (UMUC) is a part of the Maryland State System founded circa 1950. The university is also a part of the national Universities Degree Consortium. Its accreditation is through the Middle States Association of Colleges and States. This institution is unique in that it serves many Army and Navy bases across the world through its distance education program. Therefore, they serve as many as 70,000 participants in their university system (the University's principal mission is to serve adult, part-time learners). The first distance courses were offered in 1972.

There were 8,000 students enrolled in the distance education program in 1998. Ninety percent of the students are enrolled part time.

UMUC currently offers 18 undergraduate degree programs as well as seven masters degree programs through distance education. These programs include English, psychology, environmental science, fire science, paralegal studies and information systems management. Both asynchronous and synchronous (interactive TV or video) delivery systems are utilized. There are also professional development offices that work with employers and employees.

UMUC participates in the FFEL program. Students are also offered veteran's benefits, academic advising and career counseling. In order to be admitted to the program, a GED or high school diploma is required. A minimum GPA of 2.5 from an undergraduate institution is required for graduate program admission.

In their proposal, UMUC requested nine waivers: the three 50 percent waivers, the definition of correspondence courses, the definition of an academic year, the definition of eligible program, student enrollment status and a waiver of "written agreements." The college also requested a waiver of the Pell Grant formula to allow students whose semester overlaps in their 16-week distance education course to be funded. In all, UMUC was granted the three 50 percent waivers and a waiver for the definition of "weeks of instruction."

Franklin University

Franklin University (Franklin) is a private, four-year college located in Columbus, Ohio. Franklin has its accreditation from the North Central Association of Colleges and Schools and the state of Ohio. The university is a part of the Community College Alliance (CCA), for which it submitted the grant proposal for the Distance Education Demonstration Program. Franklin is recognized as a school, however, within the demonstration program. The Community College Alliance of which Franklin is a part consists of 28 community colleges across four midwestern states (Franklin applied as a consortium, but was denied this status).

Students may earn their bachelor's degree through Franklin University via distance education after completing their associate at any one of the community colleges. In order to be admitted into Franklin's degree program, candidates must have a minimum grade point average of 2.5 from their previous course-work. The students are also allowed to transfer up to 60 of their credits to Franklin University. Prior to entering the University, 20-24 credit hours must be taken in "bridge courses" which are designed to familiarize the student with taking Franklin's distance education courses. Franklin calls the program the "ABC s of Education," an acronym for: Associate, Bridge courses then Completion at Franklin. The program is aimed towards working adults who have an associate degree in a business-related field.

There are five degrees offered through Franklin's distance education program: a bachelor of science degree in Business Administration, Technical Administration, Health Services, Management Information Systems, and Computer Science. Forty courses are offered to fulfill all of the five program course selections. The distance education program has both asynchronous and synchronous delivery systems.

Franklin's distance education is demographically very similar to their undergraduate population. As of the 1997-98 academic year, 78 percent of their undergraduates on the traditional campus were part-time and had an average age of 32. At the time of their demonstration program grant proposal, Franklin processed 108 applications for their inaugural CCA distance education courses. The average applicant age was 35 years old and considered a part-time student.

Student support services are first offered through the community colleges. The colleges receive 10 percent of Franklin's tuition revenue to provide the services. These services include advising students about the programs at Franklin and assisting them in understanding the requirements needed to complete the bachelor at Franklin. Once the student applies to Franklin, a student services associate serves as the contact between Franklin and the student. The students must also take a required orientation course on becoming a distance learner.

Financial aid is managed by the community college until the student earns their associate's degree. Franklin's financial aid administrators manage financial aid for bridge courses and the bachelor's degree program.

Franklin University requested one of the 50 percent waivers and another waiver to allow the schools to determine whether the community college or Franklin would disburse the financial aid to the distance education students. This waiver was denied because the community colleges are limited to disbursing aid only for the two-year programs. They were granted the three 50 percent waivers.

Southern Christian University

Southern Christian University (SCU) is a private four-year school located in Montgomery, Alabama. It was originally founded as the Alabama Christian School of Religion in 1967. SCU has its accreditation from the Commission on Colleges of the Southern Association of Colleges and Schools. The school is located in a poor rural area where 30 percent of the residents have not completed high school. Many of their undergraduates are first generation college students. Since 1994 SCU has offered distance education courses through its Extended Learning Program.

SCU offers the bachelor, master and doctoral program through distance education in their schools of Religion and Human Services. Distance education students may earn any of the degrees available to students in the residential program. In order to qualify for admission to the distance education program, applicants must have a high school diploma or GED, recommendations, 64 credit hours of college work (or an associate's degree) and pass a bible placement exam.

Distance education students can elect to see their distance education class in real time via video satellite. Classrooms have been wired with videos and microphones to accommodate this feature. Video taped classes are offered to those students who do not have computers or Internet access. For the most part, the same classes are offered through the distance education program and the residential program. Southern Christian University had a total enrollment of 466 students in the 1997-98 school year for both the traditional and distance programs. Their distance education students comprised 24 percent of this number. Federal financial aid has been available to the university in the form of Pell Grants, FFEL, work-study and SEOG.

SCU requested the three 50 percent waivers and a waiver for the definition of a full-time student. They were granted the 50 percent waivers.

New York University

New York University (NYU) is a private four-year university, accredited by the Middle States Association of Colleges and Schools. NYU has offered on-line distance courses since 1994 through its School of Continuing and Professional Studies (SCPS). A "Virtual College" was especially created in SCPS for the purpose of promoting distance education courses.

NYU's "Virtual College" now offers the Masters of Science in Management and Systems. The School of Continuing and Professional Studies is experimenting with on-line courses to develop a distance education bachelors program for adults, other graduate programs and non-degree professional development courses. The "Virtual College" uses asynchronous instruction. Courses do not have a definite starting date and students have a 12-month calendar year to finish their program.

The long-term goal of the distance education program is to reach part-time students at home or in their corporations. According to their proposal, the 1999-2000 academic year instruction options include distance education introductory videos, tutorials, on-line discussions, projects and tests. Two-way video conferencing is also available.

NYU will be joining with the Educational Testing Service to develop automatic scoring tools to increase response time for assignments. NYU will also be working with the National Student Loan Clearinghouse to build a centralized enrollment verification system that will track students enrolled at various institutions as their distance education program grows. NYU is also engaged in the Faculty Resource Network, a distance education resource-sharing endeavor between NYU and Historically Black Colleges and Universities. The university is also planning to work with the Rochester Institute of Technology in the future to further develop the use of distance education.

NYU will handle financial aid for their students and the "Virtual College." NYU predicts that with the granting of Distance Education Demonstration Program waivers, distance education students will be able to participate in the Pell Grant program, FFEL and to receive campus-based aid.

NYU requested six waivers, one of which was a 50 percent waiver to redefine correspondence students as eligible for Title IV aid. Other waivers requested were for written agreements, student enrollment status, the definition of an academic year, satisfactory academic progress and the definition of an eligible program. NYU was granted the three 50 percent waivers, a waiver for "week of instruction" and the minimum number of weeks of instruction required in an academic year.

Hamilton College and American Institute of Commerce (Quest Corporation)

amilton College (Hamilton) in Cedar Rapids, Iowa and the American Institute of Commerce (AIC) in Davenport, Iowa are two-year degree granting proprietary institutions founded in 1900 and 1937 respectively. They had a joint total enrollment of 1,600 as of March 1999. The colleges were jointly owned since 1989, and were purchased by Quest Corporation in 1998. Quest Corporation owns and runs 30 postsecondary institutions. The North Central Association of Colleges and Schools as well as the American Council of Independent Colleges and Schools accredits the two schools.

Hamilton and AIC have provided distance education courses since 1997. Through distance education, students can earn an associate of science degree, instructional technology certificate or complete 25 percent of their residential degree program. The Quest Central office enrolls students into the degree program and handles their Title IV financial aid disbursement, while Hamilton College enrolls students and handles the Title IV fiscal responsibilities for students in certificate programs.

The delivery system used is both asynchronous and synchronous. There is an eight-part instructional system used called the Eight Media system. This system aims to focus on peer interaction, learning styles, and interactivity. The term "Eight Media" refers to eight components of the distance program which includes textbooks and software, interactive sites, the worldwide web, chat sessions, peer projects, e-mail, video or audio supplements, and electronic office hours.

Hamilton and AIC plan to offer a bachelor's degree program for the fall of 2001 and another certificate program. As of July 1998, a combined number of 530 students (average age of 29) were enrolled in the distance education programs for the two schools.

Nine waivers were requested, including: the definition of a full- time student, the three 50 percent waivers, the definition of an academic program, the definition of a payment period, definition of a week of instruction, definition of a proprietary institute, and the definitions of a telecommunications and correspondence course. They were granted the three 50 percent waivers and the other waiver requests were denied.

Masters Institute

Masters Institute (Masters) is a four-year, proprietary school. Masters was founded in 1974 as a technical college in San Jose, California. The school is accredited by the Council of Independent Colleges and Schools and also by the state of California's Bureau of Private Postsecondary Education.

Masters currently offers an on-campus program that grants a Bachelor of Science degree in systems administration and multimedia communications. The distance education program started to enroll students in June of 1998. This program awards the Associates of Applied Science degree and two diplomas in systems administration (Advanced Technology Series and Systems Administration in Microsoft Certified Systems). All of the distance programs have predetermined start and end dates. Classes are taught in six-week modules during an average 18-month program. The distance education classes are usually conducted asynchronously with exams offered at test centers and on-line. The classes are also used to train distance education students in Microsoft certifications, Novell software, A+, and Cisco. The technology used to coordinate the distance education program is called a "learning integrator" where the interface is interactive.

Masters' distance education program is targeted to working adults who already own computers and are preparing for career certification tests. In order to qualify for entrance in the Masters' program the applicant has to have a high school diploma or equivalent, three professional references, a goal statement and pass a qualifying test. Employers of the students enrolled in the distance education program can submit an evaluation every six weeks of the distance program and their employee's performance as it relates to their distance coursework. Students are offered career counseling, on-line instructor support, student evaluations and tech support.

Masters handles all of the fiscal matters for the students. Masters participates in the Federal Pell Grant program, the Federal Supplemental Educational Opportunity Grant, Federal work-study and the Federal Family Education Loan program.

Masters requested two of the 50 percent waivers and was granted all of the three 50 percent waivers.

Capella University

Capella University (Capella), formerly known as the Graduate School of America, is located in Minneapolis, Minnesota. The university began offering distance education courses in 1993. Capella opened its doors as a proprietary graduate institution designed to meet the needs of working adults through graduate level distance education. As of 1997, Capella has been accredited under the North Central Association of College and Schools. Capella is currently considering the addition of an undergraduate curriculum.

Capella offers masters degree and doctoral programs in education, psychology, business, and human services. At the time of their proposal, 276 were in masters programs while 467 were in doctoral level programs. As of February 1999, there were 743 students, all working adults, enrolled in Capella's independent study program and distance education courses. One third of the students are enrolled in on-line courses (~276).

Capella's students tend to be working adults with an average age of 45 years old. The independent study option allows students to work one-on-one with a faculty member and requires periodic residency requirements. The distance education courses are asynchronous with an established beginning and end date. The web-based courses are usually 12 weeks long and are measured in credit hours. There are required on-line discussion forums as well. There are forums on the web to address learning issues or concerns through a program called HUGS (Human Understanding Generating Success).

Of the 743 students, 40 percent utilize federal aid for their education. At the time of the grant proposal, Capella administered the Federal Family Education Loan program. The university anticipates participation in the Federal Pell Grant program and the Federal Supplemental Education Opportunity Grant programs (SEOG) in the future as well. Capella estimates that 96 percent of their students were eligible for federal financial aid in February 1999.

Capella requested two of the three 50 percent waivers and was granted all three.

Western Governors University

Western Governors University (WGU) is a private virtual university headquartered in Aurora, Colorado. WGU began enrolling students in 1998. There are 39 providers across 18 states from which WGU derives its course catalog. In fact, WGU does not offer instruction rather it acts as the coordinator of a consortium of schools that offer distance education courses. The virtual university is currently seeking accreditation through the Inter-regional Accrediting Committee.

Students can earn their associate, master, or a certificate entirely from WGU or one of the providers. WGU offers the Associate of Arts or Applied Science, certificates in various information technology and business areas and the Masters of Arts or Science degree through an asynchronous delivery system.

Students are offered various services to complete the WGU degree. An advisor/mentor is assigned as the single point of contact between the student and WGU. They perform various functions such as conducting the entrance interview, providing the students with an academic action plan, monitoring progress, and advising students on constructing a portfolio. Students who earn a WGU degree do not receive grades or credit hours. If a course is to be taken for credit hours, it has to be taken through the provider because WGU's degree is competency-based. For each degree program, an academic board predetermines competency levels. Satisfactory academic progress is determined by completed assessments.

The target population for WGU is working adult learners and individuals that cannot attend school on a traditional campus. As of August 1999, 120 students had enrolled for courses through WGU. Because the classes are drawn from across 18 states and 39 providers, a single cost per degree has been determined in order to standardize the cost of attendance. For example, the associate's degree costs $2,000, while a certificate is $2,500 and the master's degree costs $3,000.

WGU was granted a special waiver to participate in the Distance Education Demonstration Program because it did not have accreditation, a prerequisite for being in the Program. In total, WGU was granted 12 waivers.