State Authorization

The state authorization regulation requires an institution to be authorized by the state in which it has its main location, or in which it has an additional physical location offering at least half of an educational program.

“Authorization” refers to the legal authority for an institution to operate in a state. A postsecondary institution clearly meets the authorization requirement if it is named in a state charter, statute, or constitution. Other colleges face the ambiguous task of demonstrating that they are authorized by name through “other action issued by an appropriate State agency or State entity.” Although a state may choose to establish additional approval or licensure requirements, it is not required to do so by these regulations.

The regulation also requires a state to have a process to review, and appropriately act on, complaints about an institution. A related portion of the program integrity regulations further requires each institution to “provide its students or prospective students with contact information for filing complaints with its accreditor and with its State approval or licensing entity and any other relevant State official or agency that would appropriately handle a student’s complaint.” Most institutions have chosen to meet this requirement by posting the information on their websites.

The original regulations also addressed the authorization of distance education programs. This portion of the regulations was struck down in court and is not currently in effect.

Compliance with the state authorization requirements is determined as part of the Department’s recertification, audit, or program review activities conducted by its regional offices. Several private, nonprofit institutions have been needlessly threatened with the loss of Title IV eligibility due to inconsistent application of the authorization requirements by regional offices.

About


The state authorization regulations are a part of a broad package of program integrity regulations issued in 2010 by the U.S. Department of Education. The intent of the regulations was to crack down on unscrupulous higher education providers.

Unfortunately, the portion of the regulations dealing with state authorization has done nothing to advance the laudable goals of the regulatory package. Instead, these provisions have created confusion about the legal status of many private, non-profit colleges—some of which have been needlessly threatened with loss of eligibility for federal student aid dollars.
 

History

The state authorization provisions were included in a broader package of program integrity regulations published in 2010. The portion of the regulation dealing with distance education was struck down in federal court in 2011.

The other state authorization requirements have remained in effect, and were intended to be implemented by July 1, 2011. However, implementation was delayed several times; the requirements did not take effect until July 1, 2015. In announcing the final effective date, Department officials clarified that “Institutions located in States where agencies are still putting in place a sufficient State authorization process may have their current status continued for a reasonable period to permit a State process to become final.”

Lawmakers in the Senate and House of Representatives have filed legislation in the 112th, 113th, and 114th Congresses to prevent the Department of Education from enforcing the state authorization regulations. None of these measures have become public law, although one of them was approved by the full House of Representatives in March 2012.

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What You Can Do


If you run into a problem:
  • Most private, non-profit colleges have been able to demonstrate state authorization in a manner satisfactory to Department of Education regulators. However, institutions are still finding—to their surprise—that Department officials do not believe they are properly authorized by the state in which they are located. If your institution is in this situation, you should contact both Tim Powers at NAICU and your State Executive, if applicable, to request help in resolving the problem.
All members:
  • Contact your Senators and Representatives to urge their support for legislation to repeal the state authorization regulations.

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