	Background

Distance education is a growing force in postsecondary education, and its  rise has implications for the federal student aid programs. Current Federal Restrictions on Distance Education Affect Few Schools’ Ability to Offer Federal Student Aid, but Numbers Could Increase in the Future

Although current federal restrictions on the extent to which schools can  offer programs by distance education and still qualify to participate in  federal student aid programs affect a small number of schools, the growing  popularity of distance education could cause the number to increase in the  future. We found that 14 schools were either now adversely affected by the  restrictions or would be affected in the future; collectively, these schools  serve nearly 225,000 students. Eight of the 14 schools are exempt from the  restrictions because they have received waivers as participants in  Education’s Demonstration Program, under which schools can remain  eligible to participate in the student aid programs even if the percentage of  distance education courses or the percentage of students involved in  distance education rises above the maximums set forth in the law. They vary in a number  of respects. All seven agencies had a policy stating that the  standards they would apply in assessing a school’s distance education  programs would be the same as the standards used for assessing campus- based programs. The three are (1) setting measurable and quantifiable goals  for program outcomes, (2) developing strategies for achieving these goals,  and (3) disclosing the results of their efforts to the public. The accrediting  agencies we reviewed generally recognized the importance of outcomes,  but only one of the seven had an approach that required schools to cover  all three of these components. At the same time, some form of control is  needed to prevent the potential for fraud and abuse. To do so,  the Department would need to develop data on the cost to the federal  student aid programs of granting waivers to schools. Among other things, measures of the  quality of postsecondary education include student-learning outcomes,  such as the extent to which students complete programs and/or the extent  to which students’ performance improves over time. It could, however, play a pivotal role in encouraging and  fostering the use of an outcomes-based model. Appendix I: Scope and Methodology

To address the two questions about the extent to which current federal  restrictions on distance education affect schools’ ability to offer federal  student aid to their students and what the Department of Education’s  Distance Education Demonstration Program has revealed with respect to  the continued appropriateness of these restrictions, we obtained  information from Education staff and other experts on which  postsecondary institutions might be affected by these provisions or were  close to being affected. To address the two questions related to the work of accrediting agencies:  To what extent do accreditation agencies include distance education in  their reviews of schools or programs and as they evaluate distance  education programs and campus-based programs, to what extent do  accreditation agencies assess educational outcomes, we focused on the  standards and policies of seven accrediting agencies that collectively are  responsible for more than two-thirds of all distance education programs.
Why GAO Did This Study

Distance education--that is, offering courses by Internet, video, or other forms outside the classroom--has changed considerably in recent years and is a growing force in postsecondary education. More than a decade ago, concerns about fraud and abuse by some correspondence schools led to federal restrictions on, among other things, the percentage of courses a school could provide by distance education and still qualify for federal student aid. Given the recent changes in distance education, GAO was asked to review the extent to which the restrictions affect schools' ability to offer federal student aid and the Department of Education's assessment of the continued appropriateness of the restrictions. Additionally, GAO was asked to look at the extent to which accrediting agencies evaluate distance education programs, including their approach for assessing student outcomes.

What GAO Found

While federal restrictions on the size of distance education programs affect only a small number of schools' ability to offer federal student aid, the growing popularity of distance education could cause the number to increase in the future. GAO found that 14 schools were either now adversely affected by the restrictions or would be affected in the future; collectively, these schools serve nearly 225,000 students. Eight of these schools, however, will remain eligible to offer federal student aid because they have been granted waivers from the restrictions by Education. Education granted the waivers as part of a program aimed at assessing the continued appropriateness of the restrictions given the changing face of distance education. In considering the appropriateness of the restrictions, there are several policy options for amending the restrictions; however, amending the restrictions to improve access would likely increase the cost of the federal student aid programs. One way to further understand the effect of amending the restrictions would be to study data on the cost of granting the waivers to schools, but Education has yet to develop this information. The seven accrediting agencies GAO reviewed varied in the extent to which they included distance education programs in their reviews of postsecondary institutions. All seven agencies had developed policies for reviewing these programs; however, there were differences in how and when they reviewed the programs. Agencies also differed in the extent to which they included an assessment of student outcomes in their reviews. GAO's work in examining how organizations successfully focus on outcomes shows that they do so by (1) setting measurable goals for program outcomes, (2) developing strategies for meeting these goals, and (3) disclosing the results of their efforts to the public. Measured against this approach, only one of the seven accrediting agencies we reviewed had policies that require schools to satisfy all three components. As the key federal link to the accreditation community, Education could play a pivotal role in encouraging an outcomes-based model.