Federal-loan rules come into conflict with post-pandemic rise in online education
Advocates are trying to scrap a provision of the Higher Education Act that prohibits Americans studying at colleges overseas from receiving federal loans if any part of their academic program is offered online.
Efforts are underway to amend the restriction, either through stand-alone legislation or as part of a congressional spending bill.
The prohibition has been in place for more than a dozen years, but the issue has become more pressing as colleges around the globe have offered more virtual or hybrid courses following the Covid-19 pandemic, said Harrison Wadsworth, executive director of the International Education Council, which represents overseas colleges and academic programs that take part in the U.S. federal student-loan program. Students studying at foreign universities are ineligible for federal loans if their programs include even a single course or component of a course that is online.
Student-loan recipients in the United States are not subject to a similar stipulation. More than 30,000 Americans pursue degrees abroad.
Congress temporarily lifted the restriction during the pandemic as courses worldwide moved online and twice extended it, through this June. Waivers to permit online study are still in place in cases where emergencies have been declared, such as during the current war in Israel and Gaza, Wadsworth noted.
Much as in the United States, students and institutions abroad have grown more accustomed to virtual learning, and such courses have become more commonplace. Many current students have had flexibility in course delivery for their entire time in college. “What was a problem before has gotten worse,” Wadsworth said. “It’s become a crisis now.”
It’s not simply a matter of steering students away from online courses. Wadsworth said the prohibition applies if students are taking in-person courses but are enrolled in programs of study that include any online teaching.
Some institutions have found workarounds. For example, when the accreditor for McGill University, in Canada, required one of its engineering programs to add an online, no-credit course on diversity, equity, and inclusion, the university created a new, separate program for the roughly 50 Americans who were enrolled while participating in the federal-loan program. But most foreign colleges or programs enroll smaller numbers of American students, so such accommodations are often not feasible.
Wadsworth said the restriction dates back to a 2006 change to the Higher Education Act that actually repealed limitations on online education. But when it came to foreign colleges, the revisions, perhaps inadvertently, made any program taught even in part using the internet or other telecommunications ineligible for the federal-loan program. In 2010, the U.S. Department of Education interpreted that provision as forbidding online education.
Bipartisan legislation introduced in April would amend the Higher Education Act to permit students overseas to retain their federal aid if no more than 12.5 percent of their program is offered through distance education — or about one course a year. They also must be physically present in the foreign country where the institution is located.
“One thing we learned during the pandemic is the value of high-quality online learning programs. While the worst of the pandemic is behind us, these programs continue to be a key tool for higher education institutions,” said Sen. Tim Kaine, a Virginia Democrat, who co-sponsored the measure with Sen. Mike Braun, a Republican from Indiana. “This bill is a commonsense reform to help ensure that American students attending international universities remain eligible for federal financial aid if their coursework includes online components.”
Wadsworth said he would have preferred legislation that permitted a larger share of courses to be online, given the prevalence of virtual and hybrid learning. Still, his organization is supporting the Braun-Kaine measure.
While Wadsworth said he has not encountered any opposition to the bill, no action has been taken, so supporters are pushing for the reform to be included in final appropriations legislation for the Education Department. (Congress last month passed a resolution funding the federal government through early 2024.)
There’s an urgent need for a fix, Wadsworth said. “I really believe the country is served by students of various economic backgrounds who have the option and opportunity to study abroad.”
This is not the only instance in which the post-pandemic growth in online education is coming into conflict with regulations for international study. A return to federal student-visa policy that limits the number of online classes that international students at American colleges can take each term is creating headaches for some foreign students who complain about the lack of availability of in-person courses.