The U.S. Education Department issued proposals Monday that could extend federal student aid dollars to a wider variety of higher-education providers, a move that some say could spur innovation and others worry could attract predatory actors.

Education Secretary Betsy DeVos has bemoaned what counts as a college course worthy of federal loans and grants. She has also challenged the accreditation system that stands between schools and billions of dollars in financial aid, questioning whether the Education Department’s accreditation rules work to the detriment of innovation and students.

Education Secretary Betsy DeVos has criticized limits on what kinds of programs qualify for federal student aid. Bloomberg/ Andrew Harrer

The proposals would grant accrediting agencies more leeway to approve programs that don’t fit traditional models and loosen standards on instruction and the interaction between students and faculty. In doing so, the Education Department could bolster online and competency-based education, a growing field that lets students move along as they master material.

The proposals are part of a process in which education stakeholders attempt to reach consensus on regulatory changes. But given the issues up for debate and the ways they could fundamentally change higher education, negotiators may have difficulty agreeing on much.

Under the proposals, the Education Department would give accreditors, and to a lesser extent colleges, more authority over how distance education, correspondence courses and credit hours are defined. The plan takes aim at Obama-era rules, including what counts as a credit hour.

To ensure that college credits were meaningful, the previous administration defined a credit as one hour of classroom or direct faculty instruction and a minimum of two hours of out-of-class student work each week. Colleges and universities bristled at the rule when it was introduced in 2010, saying it infringed on their right to determine academic programs. Now, they may get a chance to work with accreditors to establish what a credit means.

Schools with a growing focus on online education could also benefit from a proposal to eliminate a 50 percent cap on the outsourcing of academic programs to providers that are not accredited, which would pave the way for institutions to have outside parties run academic programs. And online programs would no longer have to disclose whether they meet state licensing requirements.

Accreditors would also gain the right to say who qualifies as an instructor in a college-level course without the Education Department’s approval.

We want to reduce the focus on administrative minutiae to give accreditors and institutions more time to focus on what matters most to students, which is what happens in the classroom, what kind of services are provided,” Diane Auer Jones, the department’s principal deputy undersecretary, told reporters Monday.

The proposals received mixed reviews.

Judith Eaton, president of the Council for Higher Education Accreditation, which represents accredited institutions, praised some efforts to give accreditors more latitude, but she expressed concern that parts of the plan leave too much power in the hands of the federal government.

“There are a number of things that we like in these proposed regulations, including dropping the federal definition of credit hour,” Eaton said. “However, we are concerned that, in a number of other areas, these proposed regulations would not reduce the federal role in academic decision-making regarding quality … of higher education.”

But advocates for greater accountability in the federal financial aid system see the proposals as setting the stage for more waste, fraud and abuse.

“Individually, some of these proposals are problematic, but taken together, they are an open invitation to poor-quality-education providers to access taxpayer dollars and waste students’ time and money,” said Clare McCann, a former policy adviser at the Education Department under President Barack Obama.

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