I've started to notice some brown discoloration in the upper part of my clippings and am wondering if it is disease or something else.

My concern is that it will spread and kill the rest of the clipping.   See attached pictures.

Any suggestions are greatly appreciated.  

   

When a cutting is taken, or a pruning cut is made, it's best to cut just above a node. The pith (center) of the cutting is woodier around the buds.
The best example I can think of is bamboo.

The soft pith will normally dry back to the next node.
The orange color is a sign that the wood has already died, but you can tell that it stops at the next bud.
Doesn't look like anything serious. As long as the plant is growing, I wouldn't worry.
Next time you have a sharp clipper handy, you may as well cut that off gently.
You can drip a little candle wax onto the cut to protect it. By the end of next summer it'll be all closed up.
Congratulations on your rooting success.

Just let them be. They should be fine.

There is no advantage to cutting it now.  If you try, you just risk slipping and cutting the new growth or twisting off roots.  Leave it and it will fall off naturally when it's ready.  Now it's like a fingernail.  Not hurting anything, just dead tissue sitting there. 

The new growth both below and above that color change looks pretty healthy to me.  I wouldn't worry about it, either.

Thank you everyone for the input.  I'm relieved to hear it's not a problem.  This is my first attempt at propagating so I'd like to have some actually survive.

My next two questions:   Is it better to put foil around the cups to prevent the roots from being exposed to the sun light?

And, do they still need a humid environment?  I've been slowly moving the cover back (open) to control moisture/mold, so now it's half on half off.  I'm thinking by this point they are hardy enough to remove the cover altogether, but wonder if more humidity would help root growth (still not nearly enough roots for potting.  Started them in late August).