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85/15 Rule Calculations, Waiver Criteria, and Reports rule (2024)
| What is a significant rule? Significant regulatory action is a term used to describe an agency rule that has had or might have a large impact on the economy, environment, public health, or state or local governments. These actions may also conflict with other rules or presidential priorities. As part of its role in the regulatory review process, the Office of Information and Regulatory Affairs (OIRA) determines which rules meet this definition. |
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The 85/15 Rule Calculations, Waiver Criteria, and Reports rule is a significant rule issued by the U.S. Department of Veterans Affairs effective February 15, 2024, that amended its educational assistance regulations by eliminating the four 85/15 rule calculation exemptions for students in receipt of certain types of institutional aid.[1]
Timeline
The following timeline details key rulemaking activity:
- February 15, 2024: Final rule took effect.[1]
- January 16, 2024: Final rule published.[1]
- December 12, 2022: Comment period closed.[1]
- October 12, 2022: Proposed rule issued and comment period opened.[1]
Background
The 85/15 rule, governed by 38 U.S.C. 3680A(d) and 38 CFR 21.4201(a), prevents the Department of Veterans Affairs (VA) from providing educational assistance benefits to new students when more than 85 percent of enrolled students have their tuition, fees, or charges paid by the educational institution or the VA. The rule aims to prevent schools from inflating tuition charges for VA education beneficiaries by requiring educational institutions to enroll at least 15 percent of students paying full tuition without institutional or VA aid.[1]
Summary of the rule
The following is a summary of the rule from the rule's entry in the Federal Register:[1]
| “ | The Department of Veterans Affairs (VA) is amending its educational assistance regulations by eliminating the four 85/15 rule calculation exemptions for students in receipt of certain types of institutional aid. Currently, VA regulations provide exceptions that allow certain categories of students to be considered “non-supported” for purposes of the 85/15 rule notwithstanding their receipt of institutional aid. In this final rule, VA is eliminating these exceptions, thus clarifying the types of scholarships that educational institutions must include in their calculations of “supported” students. Also, VA is revising the criteria that shall be considered by the Director of Education Service when granting an 85/15 rule compliance waiver. Lastly, VA is amending the timeline for certain educational institutions' submission of 85/15 compliance reports.[2] | ” |
Summary of provisions
The following is a summary of the provisions from the rule:[1]
The Department of Veterans Affairs (VA) made amendments 38 CFR 21.4201(e)(2), specifically defining and eliminating categories of "non-supported" students under the 85/15 rule. The 85/15 rule prohibits the VA from paying educational assistance benefits to new students when over 85 percent of enrolled students have their tuition, fees, or charges paid by the educational institution or the VA. The amendments remove exceptions that allowed certain students to be considered "non-supported" despite receiving institutional aid, addressing loopholes that allowed institutions to exploit the rule, especially under the Post-9/11 GI Bill. The changes aim to strengthen the market validation mechanism of the 85/15 rule and enhance consistency in compliance calculations, promoting transparency and fairness. Additionally, the amendment revises waiver criteria, removing irrelevant factors and adding pertinent ones, and adjusts reporting requirements for educational institutions with non-standard terms, ensuring timely and accurate 85/15 calculations. Overall, these modifications reinforce the 85/15 rule's original purpose of preventing abuses and overcharges by educational institutions participating in VA education programs.
Significant impact
- See also: Significant regulatory action
Executive Order 12866, issued by President Bill Clinton (D) in 1993, directed the Office of Management and Budget (OMB) to determine which agency rules qualify as significant rules and thus are subject to OMB review.
Significant rules have had or might have a large impact on the economy, environment, public health, or state or local governments. These actions may also conflict with other rules or presidential priorities. Executive Order 12866 further defined an economically significant rule as a significant rule with an associated economic impact of $100 million or more. Executive Order 14094, issued by President Joe Biden (D) on April 6, 2023, made changes to Executive Order 12866, including referring to economically significant rules as section 3(f)(1) significant rules and raising the monetary threshold for economic significance to $200 million or more.[1]
The text of the 85/15 Rule Calculations, Waiver Criteria, and Reports rule states that OMB deemed this rule significant, but not economically significant:
| “ | The Office of Information and Regulatory Affairs has determined that this rulemaking is a significant regulatory action under Executive Order 12866, Section 3(f)(1), as amended by Executive Order 14094.[2] | ” |
Text of the rule
The full text of the rule is available below:[1]
See also
External links
Footnotes
