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WASHINGTON -- Many colleges and universities, including many selective institutions, may choose to drop out of the military's tuition assistance program for active-duty service members if changes are not made to Defense Department guidelines, several higher education groups warned Defense Secretary Leon Panetta in a letter Monday.

The colleges take issue with new guidelines the Defense Department put forth in a memorandum of understanding in March, which were intended to ensure better quality control for programs that receive tuition assistance. Instead, the groups say, the guidelines go too far in prescribing how programs must award academic credit and process student payments, among other issues.

The memorandum, which institutions must sign before receiving tuition assistance payments, includes some relatively uncontroversial points: it requires that colleges be regionally or nationally accredited and comply with Defense Department regulations. But other points are more controversial and intrude on what colleges view as their prerogative, especially its specific instructions on accepting transfer credits.

The memorandum must be signed by Jan. 1 for colleges to continue to be eligible for tuition assistance, which covers tuition up to specified limits for active-duty members of the military who are enrolled at an institution of higher education.

To receive tuition assistance, colleges must “where appropriate” award credit based on the military’s transcript system, the department said in the agreement. The system describes courses that military personnel have taken while in service, and the memorandum would require all institutions receiving tuition assistance to “recognize, accept and award credit where appropriate” based on those criteria.

But most at issue is the requirement that colleges receiving tuition assistance adhere to the principles and student bill of rights of the Servicemembers Opportunity Colleges, a voluntary association of 1,900 colleges -- the majority of which are community colleges, branch campuses of state universities, or for-profit institutions, although a few state flagship universities participate as well.

Those principles include reduced residency requirements: service members should be required to spend no more than one year in residence for a four-year degree, according to the consortium. They also require that colleges give credit for military experience and training.

In a letter to Panetta on behalf of several higher education groups, including the American Council on Education, the Association of American Universities, and the Association of Public and Land-Grant Universities, Terry W. Hartle, senior vice president for government and public affairs at ACE, argued that that regulation and others in the memorandum are “at odds with traditional assumptions about federal versus institutional control over academic affairs and thus have far-reaching implications.”

“A significant number of public and private non-profit institutions have raised concerns regarding some MOU provisions that are inconsistent and, in many cases, incompatible with their well-established academic policies and administrative practices,” Hartle wrote.

Some of the regulations, including the credit acceptance provision, are “very problematic,” said Barmak Nassirian, associate executive director for external relations at the American Association of Collegiate Registrars and Admissions Officers, which also signed the letter. “They’re problematic in the most fundamental way,” Nassirian said. “They touch the heart of institutional academic policy.”

While many of the institutions taking issue with the new rules enroll few active-duty service members, they would like to continue to be part of the tuition assistance program, Nassirian said. Unless the memorandum is changed, that may not be possible, the groups wrote.

“We are concerned that a significant number of our nation’s finest institutions, many of whom heavily contribute to DoD’s research agenda, will be unable to sign the MOU despite their strong desire to do so and their ongoing commitment to educating service members,” they wrote.

The Defense Department addressed the groups’ concerns in a series of clarifications to the memorandum of understanding. Institutions need not become a member of the Servicemembers Opportunity Colleges consortium in order to receive tuition assistance, the department said, but institutions should  “strive to incorporate the SOC criteria to the maximum extent possible.” They also emphasized that the final judgment on whether or not to award transfer credit rests with individual institutions.

“This provision is to ensure that institutions provide, to the maximum extent possible, transparency and clarity for service members about the institutional policies they will encounter as they seek to use their tuition assistance benefits at the institution,” the department wrote in its clarifications.

While those clarifications alleviated some concerns, they do not bear the same legal weight as a formal memorandum of understanding, the higher education groups wrote. If the memorandum itself is not changed, many universities will decline to sign.

“We respectfully request that the Department withdraw the MOU and reopen a discussion about ways to modify the document to better serve its intended purposes,” Hartle wrote.

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