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Distance Ed. State Authorization Reg. Done for Now

Our colleagues at WCET, Russ Poulin and Megan Raymond, have highlighted last Friday's release of a "Dear Colleague Letter" (DCL) by the U.S. Department of Education (ED) that confirms ED will no longer seek to enforce the current federal student aid regulation extending state authorization requirements to distance education. In their blog post, Poulin and Raymond note, as the DCL does, that this does not change the status of state laws regarding state authorization of postsecondary education providers. Institutions delivering online learning into a state other than the one in which they are physically located will still have to determine if that state requires distance education providers to be authorized by the state in order to legally offer courses and programs in its jurisdiction. And Poulin and Raymond have been tireless in drawing attention to the complaint process requirements contained in the same body of regulations from which the distance education state authorization regulation arose. Those requirements stipulate that institutions must make available to students in a prominent fashion information about how a student might initiate a complaint against an institution with relevant state agencies and accrediting bodies, both for the state in which the instituiton is located and any states in which it has students.

However, at least for the time being, institutions do not face seeing their distance education students in a given state lose their federal student aid eligibility due to any oversight or error on the part of the institution in complying with the state's postsecondary education provider authorization laws and regulations. How long this will be the case remains to be seen. Since the distance education state authorization regulation was overturned by a federal court on procedural grounds, with the court's decision later upheld on appeal, ED could decide to launch a new negotiated rule-making process to try and reinstate the regulation. Also, with the reauthorization of the Higher Education Act (HEA) set to begin next year, they may decide to work with Democratic allies in the U.S. Senate to reset this issue as part of a comprehensive approach to addressing concerns about for-profit postsecondary education, which policy-makers often seem to conflate with online distance education generally.

I'll blog more about that issue shortly, but in the meantime, it's worth noting that the executive summary of the Senate report released this week on the for-profit higher education industry identifies a lack of state authorization enforcement as a key factor leading to the federal student aid abuses cited in the report; a later point on proposals to curb those abuses appears to identify state authorization as a necessary but not sufficient condition for adequately addressing them:

  • [On the factors contributing to problems in for-profit higher education] "State Oversight: State oversight of for-profit education companies has eroded over time due to a variety of factors, including State budget cuts and the influence of the for-profit college industry with State policymakers. The U.S. Department of Education had never defined minimum requirements for State authorization, and many States have taken a passive or minimal role in approving institutions, reviewing and addressing complaints from students and the public, and ensuring that colleges are in compliance with State consumer protection laws."
  • [On how to address the problems in for-profit higher education by strengthening oversight of federal student aid] "Use criteria beyond accreditation and State authorization for determining institutions’ access to Federal financial aid."

The text in the main report that discusses state authorization further reinforces the view that we may hear more about distance education state authorization during the HEA reauthorization. As you consider the following example, please note the troubling reference to correspondence courses in conjunction with distance education, which also arose in relation to the proposed distance education Pell Grant provisions included in a bill passed by the Senate Appropriations subcommittee chaired by Senator Harkin, who chairs the Senate committee that released this report:

"The Department’s finalized rule stated that the Secretary would consider an institution to be legally authorized by a State if: (1) the authorization is given to the institution specifically to offer programs beyond secondary education, (2) the authorization can be revoked by the State, and (3) the State has a process to review and appropriately act on complaints concerning an institution and enforces applicable State laws. The finalized rule also required schools offering postsecondary education through distance or correspondence education in a State in which it was not physically located, to meet any of that State’s requirements in order for it to offer postsecondary education to students located in the State. The purpose of this requirement was to ensure that schools offering online classes to students in multiple States were properly authorized by each of the States. Without this requirement, and what is happening currently, is that many schools that primarily offer online classes to students located across the country only have to be authorized by the State in which they are headquartered."