This provision is very important for three key reasons:

1. The law severely limits the amount of student aid available to correspondence students. However, a student enrolled in a telecommunications-based course is entitled to full student aid, adjusted only for actual differences in cost of attendance.

2. The law excludes from eligibility to provide federal financial assistance those institutions that offer a total of more than fifty percent of their courses (not enrollment) through telecommunications and correspondence study. However, an institution that offers 200 different courses, 50 of which are telecommunications-based and 49 of which are correspondence, would remain an eligible institution. Note, however, that a course that is delivered both conventionally and by correspondence counts as two courses, one in each category.

3. The law assures that a telecommunications-based course is not converted to correspondence status simply because it also incorporates written materials. The Department has declared courses that mix resident and correspondence study to be all correspondence.

The 1992 amendment also, for the first time, provides a broad definition of telecommunications-based educational delivery systems:

For the purpose of this subsection, the term "telecommunications" means the use of television, audio, or computer transmission, including open broadcast, closed circuit, cable, microwave, or satellite, audio conferencing, computer conferencing, or video cassettes of discs *** .

This definition is extremely important, since in the past the Department of Education distinguished "live" telecourses from all other forms of telecommunicated instruction. There is a special requirement for courses that utilize video cassettes or discs: the course must also be delivered "in person to other students of that institution." That means courses delivered through these two specific media (but not the others enumerated) must also be delivered on-campus, generally but not necessarily through "conventional" means.

Finally, the new law requires campus financial aid officers to adjust federal aid to a student enrolled in telecommunication-based courses if the delivery method "results in a substantially reduced cost of attendance to such student." An institution cannot simply reduce financial aid because the course is delivered through telecommunications, but the aid officer is required to determine if the delivery system "substantially" reduces actual costs, and to adjust that student's aid accordingly. Since most students still have living costs regardless of the mode of delivery, the effect of this provision is likely to be minimal.