Rule Change Could Open Up More Federal Aid To Elearners

Feb 5, 2007  The “50 percent rule,” which has made it difficult for pure online schools to get financial aid to students, could soon be repealed by the U.S. Congress. Originally passed in 1992 as a reaction to fake "diploma mills" and certificate programs, the 50 percent rule prevented any school from getting federal aid (specifically Title IV and HEA money) if the school offered more than 50 per cent of it’s classes online or had more than half it’s student body enrolled in elearning courses.

Online Degrees Get More Credible
The 50 percent rule has caused a number of problems for students who learn online. Because they've found financial aid tough to obtain, elearners have generally been graduating with much more debt than graduates of brick and mortar schools. 

Colleges and universities have been extremely careful to avoid going above 50 percent limits. As a result, even some online courses in heavy demand have not been offered, and schools have been less aggressive in seeking financial aid for online students. There's also been a "perception" problem created for distance learning courses. Because the federal government has seemed to be indicating that it wants to hold back the growth of these courses, there's been a persistent sense in the education community and even among some employers that online degrees may be “second rate."

The congress seems willing to repeal the rule now because of the exploding popularity of online learning and a wide variety studies concluding that the quality of education it provides is not lower in any way than old-fashioned classroom learning. 

But another key political factor is shaping the debate over online learning: With its lower costs and wider availablity, elearning is clearly becoming an important choice for minority students who cannot afford traditional colleges. Representative Howard P. McKeon (Rep.-Cal.), a member of the house committee considering on the rule change, said this week that many of the country's most needy students are "being deprived of a postsecondary education as a result of outdated laws that govern distance education.” Black and Hispanic students represent a large proportion of online degree students. It's likely that many will be able to get financial aid college courses online for the first time if the rule is repealed.

Opportunities and Problems
The number of students taking at least one online course is rising at a rate of 18% every year, according to the Sloan Foundation. Ending the 50 percent rule will mean an increase in the number of quality online schools -- as well as an increase in bogus diploma mills. Both could potentially benefit from increasd federal aid. As a result, students will probably get more financial help towards an online education, but they’ll need to be even more careful to make sure their degrees come from properly accredited schools.