About
The state authorization of distance education programs was originally part of a broad package of program integrity regulations issued in 2010 by the Department of Education. The intent of the regulations was to crack down on unscrupulous higher education providers.
The rules exposed the broad and confusing patchwork of state requirements for authorization for institutions outside of each state’s geographic area. This led to the development of a national state reciprocity agreement, NC-SARA, which set up its own rules and regulations. To add to the confusion, the initial distance education regulations have been through a series of court challenges and regulatory rewrites, making this regulation one of the most onerous regulations every imposed on institutions.
NC-SARA
The burdensome nature of the regulations and the confusing array of state laws regarding authorization for distance education programs eventually led to the creation of the National Council for State Authorization Reciprocity Agreements (NC-SARA). Because institutions that offer distance education in a state that participates in NC-SARA are considered to be in compliance with that state’s requirements regarding postsecondary distance education, NC-SARA offers a welcome shortcut for institutions seeking to gain authorization for out-of-state online programs.
One complication that has emerged, however, is that NC-SARA maintains its own institutional eligibility rules that operate independently of federal regulations. In particular, NC-SARA uses the Department’s financial responsibility composite scores as a threshold for participation in the reciprocal agreements. The use of the scores further compounds the negative impact of the flawed formula. NAICU has urged NC-SARA to decouple passage of the federal test from their eligibility criteria for participation in the state distance education compact, but NC-SARA has declined to do so.
History
The regulation of state authorization of distance education programs was originally included in the Obama Administration's 2010 program integrity regulations. Due to various legal and operational roadblocks, final regulations governing state authorization of distance education programs have been delayed multiple times over the years.
In 2011, the distance education piece of the regulations was struck down by a federal judge. The Court ruled that the Department had violated the Administrative Procedure Act by failing to include the distance education requirements in the overall state authorization regulations made available for public comment. The action was upheld on appeal in June 2012.
As a result, the Department of Education was forced to return to the negotiated rulemaking table in order to develop regulations related to the state authorization of distance education, which it did in March 2014. Citing the complications associated with the development and implementation of the distance education regulations, Under Secretary Ted Mitchell announced in June 2014, that the Department of Education would “pause” on the state authorization rule on distance education.
After a two-year hiatus, the Department of Education released a new set of proposed regulations in July 2016. The final regulations, which were published in December 2016, were scheduled to go into effect on July 1, 2018, but the Trump Administration delayed implementation of the distance education portion of the regulations until July 1, 2020. (The regulations regarding state authorization of foreign branch campuses were not subject to this delay and went into effect on July 1, 2018.) However, litigation forced the Department to implement the Obama-era regulations, which retroactively became effective as of May 26, 2019.
The retroactive implementation of the Obama-era regulations – specifically, the requirement that institutions offering distance education must document a state complaint process – caused significant problems for online students in California, who were suddenly at risk of losing federal financial assistance because California lacked the required process for handling student complaints against out-of-state institutions. After a period of uncertainty, the Department granted conditional approval to California’s plan based in part on the fact that the state’s process complies with the Trump Administration’s regulations that were about to take effect.
Meanwhile, several months before the court ruling, the Department established a negotiated rulemaking committee to revise the regulations governing state authorization of distance education programs. Based on the consensus reached during negotiated rulemaking, the Department published a proposed rule in June 2019. The final rules became effective on July 1, 2020. As a result, the 2016 Obama-era regulations, which were in effect for just over a year, have been replaced by the Trump Administration version of the rules.
Legislation to repeal the regulations related to state authorization of distance education has been introduced in each of the last several congressional sessions. Most recently, provisions to repeal the regulations are included in the House Republican proposal to reauthorize the Higher Education Act, although no such provisions appear in the House Democrats' alternative reauthorization proposal.
In response to the multiple delays in implementation of the state authorization of distance education regulations, 49 states, and over 2,100 institutions, have joined the State Authorization Reciprocity Agreement (SARA) as a means to ease compliance with the potential regulations.