The OIG Report on WGU, Part 2: React… But Don’t OverreactReport on WGU, Part 2: React…But Don’t Overreact

Originally posted on October 3, 2017 at WCET Frontiers with Russ Poulin

It has been more than a week since the U.S. Department of Education’s Office of Inspector General (OIG) issued its Final Audit Report declaring that “Western Governors University Was Not Eligible to Participate in the Title IV Programs.” Both of us (Russ Poulin, WCET and Van Davis, Blackboard) have been following the activities surrounding the audit (competency-based education, regular and substantive interaction, the definition of faculty) for some time. Last year we wrote a post trying to compile and interpret previous OIG and Department of Education information about “regular and substantive interaction.”

This is the second in a series of blog posts on the OIG Report. This post begins with some additional background. We also want to be the first to provide advice as to what this means for distance educators and suggest some issues you and your institutional colleagues should consider.

What Has Happened Since the Report Was Issued?

During the last week, there have been numerous articles and opinion pieces denouncing the OIG’s recommendations. They consistently highlight WGU’s stellar reputation and the fact that it performs better on many higher education metrics than most other institutions. A sampling of articles:

In the e-Literate blog, Phil Hill does a fabulous job of:
- Deconstructing the logic and definitions of the Report in which he declares the opinion a “travesty.”
- He reviews the likely impacts on the fragile movement of competency-based education.
A collection of short reactions to the Report (including entries from both Van and Russ) assembled by Inside Higher Ed.
Clara Lovett, former University of Northern Arizona president in a letter to the Washington Post: “Instead of setting the clock back, let’s find out why stale thinking and antiquated notions of what a university education should be are still standing in the way of needed innovation.”
Justin Draeger, President of the National Association of State Financial Aid Administrators wrote in an opinion piece: “What’s the fastest way to stifle innovation? Declare a higher education institution ineligible for federal financial aid, recommend it return hundreds of millions of dollars and watch other colleges and universities duck for cover.” Russ had talked with Draeger and the NASFAA policy staff earlier in the week.
From NPR: “Who Is a College Teacher Anyway? Audit of Online University Raises Questions.”

Knowing that the audit was coming, WGU produced a web page with text and video responses in which they are emphatic that the institution followed all laws and regulations in the care for and disbursement of federal financial aid. Last week, Jarret Cummings of EDUCAUSE joined us for a conversation with Robert Collins, WGU’s Vice President of Financial Aid, who echoed this message.

What You Need to Know

In the whole discussion, there are some key details that have been lost that we want to highlight for you. We believe that these may be helpful in discussions with your colleagues.

Only institutions with more than 50% of their coursework declared “correspondence education” are at risk of losing their aid given the concepts used in the Report. So, react, but don’t overreact. Here is the background provided on this issue in the Report on page 1:

“In 2006, Congress removed restrictions that limited participation in the Title IV programs by schools offering distance education programs. Congress provided that distance education courses (then referred to as telecommunications courses) would no longer be considered correspondence courses as long as the distance education courses offered by a school exceeded 50 percent of its total course offerings…Schools also continued to be ineligible if courses offered by correspondence exceeded 50 percent of the total course offerings or student enrollment in correspondence programs exceeded 50 percent of total enrollment. Additionally, students enrolled in correspondence programs continued to be limited to a half-time Federal Pell Grant Program (Pell) award. In 2008, Congress further amended the HEA to require that distance education programs ‘support regular and substantive interaction between the students and the instructor.’”

The ruling also does not apply to any institution that has received authorization by the Department of Education to offer financial aid on the basis of direct assessment.
WGU is accredited by the Northwest Commission on Colleges and Universities. Normally, an institution’s accrediting agency reviews the academic issues prevalent in the OIG Report. WGU was in good standing with its accrediting agency on these issues.
The Office of Inspector General is a semi-autonomous (our term) unit of the Department of Education. It performs reviews and audits that are recommendations to (in this case) the financial aid unit of the Department for their review and action. The ultimate authority to act on the recommendations lies with the Secretary of Education.
We have yet to talk to anyone who believes that the Department of Education will accept the Report. There are differences of opinion on how long it will take before action is taken and on exactly what actions the Department will recommend to remedy the situation. We believe it will be resoundingly rejected, but will the rejection help only WGU or will it be couched in broader language that might apply to all institutions?
Although the report’s findings were aimed only at WGU, we simply don’t know at this time whether or not these standards will be applied to other institutions. It is especially uncertain if the OIG’s interpretations of “instructor” and “regular and substantive interaction” will be applied to non-CBE modalities like adaptive learning or even general distance education. It is a concern.

How Can This Be Resolved?

This issue needs a Congressional solution, but Congressional action is hard to come by these days. The pending reauthorization of the Higher Education Act would be a great place for a solution, but we are hearing that reauthorization may be delayed until 2019. (Collective heavy sigh.)

Meanwhile, the Department of Education needs to address these issues beyond just WGU; ED needs to provide clear direction regarding “regular and substantive” and acknowledge that the Inspector General’s definition is prohibitively narrow and does not acknowledge evidence of quality outcomes. Although the use of negotiated rulemaking has a mixed track record, absent of a legislative response, it may be time for the Department to use the process to issue regulatory language clarifying “regular and substantive.” Another possible solution would be passage of legislation that creates statutory definitions and standards for things like “instructor” and “regular and substantive.” And since CBE continues to enjoy bipartisan support, a legislative response is possible. However, any such response would need to go beyond addressing WGU’s situation and should instead address the larger issue of how to foster innovation while still assuring quality educational outcomes and the centrality of faculty that “regular and substantive” language is thought to protect. While the issue of compliance for non-traditional innovations is open, let’s solve as much of it as we can.

What Should You Be Doing?

The recommendations of the Report may cause hesitancy by faculty, administrators, and board members to shy away from any innovation for fear of putting federal financial aid (Title IV) eligibility in jeopardy. Our main message to you is to react, but don’t overreact. Done properly, this Report can be used to prompt healthy reflection on quality, faculty and student interaction and other practices in your distance education, CBE, and other courses.

We do have suggestions on actions that you may wish to take.

If you think compliance could be a problem for your institution, we recommend engaging in a series of conversations. Keep the focus on improving learning, but also keep an eye on compliance requirements:

Engage faculty. Encourage and sponsor proactive conversations about how to assure quality across all of your course and program offerings, not just in CBE or distance education. Conversations are especially important with leads and key faculty of academic programs that might be affected.

Consider the OIG Report’s definition of “regular and substantive interaction”. Which interactions do they count as interaction and how do they define a faculty person? We find that it helps to clear your head of any preconceived notions of what interaction entails prior to reading their interpretation. Their definition is very, very narrowly prescribed and their notion of “interaction” sounds more like dissemination to us.
Would your courses be in compliance? If not, how many would not? This is particularly interesting for places that make extensive use of lecture capture videos or use an unbundled faculty model.
Stepping away from compliance concerns, what does quality interaction look like?
If changes need to be made in courses, it is good to get campus-wide understanding and support.

Engage administrators. Engage in conversations with affected administrators from your institution, such as financial aid administrators, the provost, compliance officers, legal counsel, and (especially) leads and faculty for academic programs that could be affected.

Find out if you have a financial aid review or an accrediting visit coming in the near future. If yes, start thinking about responses.
Do you want to continue to call your programs self-paced (see previous advice on this point) or claim they can be “completed on your own”? The recent report makes it clear that how your program is marketed can impact compliance.
Help administrators understand that any changes to courses needs to involve faculty and instructional design resources. In fact, instructional designers are even more important in light of the audit findings as they are the ones best suited to work with faculty on developing activities and interactions that will meet the Inspector General’s definition of “regular and substantive.”

Engage government affairs. Get the compliance issues raised in the Report on the list of your government affairs officers.

If you make extensive use of CBE, distance education, or other modes of instruction that break from the traditional model, you may wish to contact your Congressperson and/or Senator now to express your opinion on the OIG Report.
The government affairs person should have this topic on their list of issues to discuss any time they engage with Congress members or their staff.

Be open with students and employer partners. Develop a response so that you are prepared in case students have any questions. Students might read the papers and worry that their financial aid or entire degree is in jeopardy because of the recommendations of the OIG Report. Employers may be concerned about the quality of the academic program. Being proactive with a prepared response will help everyone understand the situation. If the issue becomes more widespread, be prepared to proactively communicate with students and employers more broadly.

We will continue to follow this issue and keep you informed. Our next blog post will be an update of last year’s post on “regular and substantive interaction.” We gathered the documents we could find on the subject and attempted to bring all the interpretations together in one analysis. We will use that work as a starting place and indicate where there are additions or changes in how compliance was interpreted in the WGU case.

Oh…and one last thing: be ready for action should the time come. We believe that the Department will be strong in its rejection of this Report, but it’s been a surprising year. It pays to be ready… but don’t overreact.