October 24, 2023
The U.S. Department of Education debuted a sweeping regulatory package Tuesday fortifying federal oversight of financially unstable colleges, including by broadening the circumstances in which they must supply the government with a letter of credit.
This mammoth new set of rules matches the Biden administration’s priority of holding accountable colleges it deems predatory or high risk for students. The regulations come as college costs soar, contributing to the federal loan portfolio swelling to $1.6 trillion.
The new rules also contain significant new consumer protections, like mandating colleges provide clear financial aid offers that break down cost of attendance and types of available assistance.
Notably, the regulations forbid institutions from withholding academic transcripts of students who paid for their college education with Title IV financial aid. Transcript holds prod students to pay their outstanding debts, but equity concerns over them have mounted. Critics argue the practice can hamper students’ ability to get a job or transfer to another college.
Below, we break down these and other key provisions of the rules, which come into effect July 1 next year.