State Authorization Appeal Heard Today

Many thanks to Russ Poulin at WCET for uncovering the DC Circuit Court of Appeals hearing calendar (http://www.cadc.uscourts.gov/internet/sixtyday.nsf/fullcalendar?OpenView&count=1000) and highlighting that the U.S. Department of Education's appeal of a federal district court order overturning its state authorization regulations in relation to online distance learning will be heard today:

Tuesday, February 21, 2012 9:30 A.M. USCA Courtroom - Judges Rogers, Edwards, Ginsburg

• 10-1079 - American Petroleum Institute v. EPA, 20 minutes per side

• 11-5174 - Association of Private Sector v. Arne Duncan, 20 minutes per side

• 11-1104 - Hard Rock Holdings, LLC v. NLRB, 10 minutes per side

To the best of our knowledge, the department’s brief stating the grounds of its appeal has yet to be posted, but we will certainly be looking for it and will report on its availability as soon as we have the URL. Likewise, we will share information on the appeals court decision as soon as we have it.

If the appeals court overturns the lower court ruling, then the department’s extension of state authorization requirements that were set to take effect last July will go into force. Even if that were to happen, the department previously indicated that it would not actively enforce those regulations against institutions making good faith efforts at compliance until July 1, 2014, with what constitutes “good faith efforts” defined in a “Dear Colleague Letter” issued by the department last April.

The bad news, of course, is that reinstatement of the regulations would again mean that the federal student aid eligibility of an institution’s online distance learning programs would depend on its compliance with the state authorization requirements of every state in which it has online distance learning students. However, as Russ, I, and many others have noted, institutions already faced potential state action, however unlikely, for not following state laws requiring postsecondary education providers to have authorization by the state to deliver higher education within the state prior to doing so.

Many states, though, either do not require distance learning providers to have state authorization, or require only that providers notify the state that they plan to deliver postsecondary education within the state. The trick is to know which have requirements of any type and how to go about meeting them. The State Higher Education Executive Officers (SHEEO) association has a set of state authorization resources that will help an institution make those determinations. Also, the Presidents’ Forum has been working with the Council for State Governments to develop a state compact, through which states would agree to recognize each other’s authorizations. If widely implemented, the compact would essentially return the authorization issue to the status quo that existed before the U.S. Department of Education regulations. Under the previous regulatory framework, institutions only had to have authorization by the state in which they were physically located, assuming their home state required it, in order to qualify for federal student aid programs.