Today, the U.S. Department of Education’s Federal Student Aid (FSA) office determined Western Governors University (WGU) is indeed eligible to participate in federal student aid programs. In making its final determination, FSA reviewed carefully the Department’s Office of Inspector General’s (OIG) report, examined WGU’s records regarding interactions between students and academic staff during the year audited, and also reviewed the favorable findings of WGU’s accrediting agency regarding the institution’s academic model. FSA determined that, particularly in light of a lack of clear guidance from the Department at the time of the audit period, WGU’s efforts to comply with the governing law and regulations were reasonable and undertaken in good faith. OIG ultimately agreed with FSA’s issuance of the final audit determination.

FSA’s final audit determination comes after OIG performed an audit on WGU and concluded the university should return $712 million in federal student aid funds that it had received after purportedly being ineligible. The OIG’s audit covered the period from July 1, 2013, through June 30, 2014, and concerned WGU’s online competency-based academic model and the amount of interaction that occurred between students and instructional staff at WGU. WGU’s model relies on the use of student mentors to engage with students on a regular basis. Students at WGU do not attend scheduled classes and instead learn at their own pace, earning credit only when they demonstrate mastery of the competencies in the program.

FSA’s final determination is a culmination of an audit resolution process in which the OIG issues its final audit report (which contains findings and recommendations to FSA), and FSA drafts a final audit determination, which is reviewed by the Office of Inspector General.

While the Department has since clarified the eligibility issues in this audit through guidance issued in December 2014, the topic of distance learning is being addressed as part of a Department negotiated rule-making session starting on Monday. The Department is hopeful that further clarification will be part of future regulations that will help spur the growth of high-quality innovative programs.

The final audit determination letter can be found here