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ED and Higher Education Associations Look to Address Distance Education Regulations

On February 19, a 15-person negotiated rulemaking panel appointed by the U.S. Department of Education (ED) met to begin discussing a variety of issues concerning federal student aid regulations, including how a program or institution can apply or qualify for federal student aid programs and how to better protect such programs from fraud and abuse. The panel consists of representatives from for-profit institutions, community colleges, and other relevant stakeholders. It will address “state authorization” for distance education providers seeking to participate in Title VI and other Higher Education Act student aid programs. As explained in the issue paper released by ED, the agency is seeking input on how state reciprocity agreements should be used in conjunction with the new regulations. The next rounds of negotiated rulemaking are schedule for March 26-28 and April 23-25.

The department previously issued a rule in 2010 that required distance education providers seeking to participate in federal financial aid programs receive authorization to deliver postsecondary education in each state in which they wished to operate and that required such authorization. However, that rule was struck down in 2012 by a federal appeals court, which determined that the department did not follow the necessary rule-making procedures in developing it.

Higher education institutions, associations, and organizations are tackling the issue via the National Council for State Authorization Reciprocity Agreements (NC-SARA), a nationwide effort to streamline the process for states to regulate interstate distance education. On February 24, Indiana was approved to join NC-SARA by the Midwestern Higher Education Compact (MHEC), one of four regional compacts with such authority. NC-SARA hopes to provide students with greater access to distance learning by streamlining the process through which states agree to recognize each other’s processes for authorizing distance education providers to operate within their jurisdictions. In order to join NC-SARA, a state must meet a set of minimum standards, including acceptance of national or regional accreditation, acceptance of an adequate federal financial responsibility score for distance education participation in federal student aid programs, and effective state regulations for consumer protection and oversight.

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