NAICU Washington Update

Developments in Distance Education

June 12, 2012

Here's a quick summary of developments affecting distance education.

Court of Appeals Strikes Down Distance Education Regulation

The Department of Education lost its appeal of a 2011 court ruling that had struck down, on procedural grounds, the distance education portion of the state authorization regulations issued in 2010.  (See July 11, 2011, Washington Update story)  The appeals court upheld the district court finding that the Department had violated the Administrative Procedures Act by failing to include the distance education requirements in the proposed regulations made available for public comment. 

Department officials haven't yet indicated how they will respond to the decision.  They could address this issue in a new regulatory process.  Alternatively, the Department could abandon further efforts to regulate in this area, or could defer action until the issues are further refined by various private organizations examining state distance education policies.

It's worth noting that, while this court action removes the threat of a federal penalty for violating the Department regulation, it doesn't negate state laws and regulations on distance education.  In fact, one byproduct of this regulatory process has been increased awareness that colleges haven't necessarily been complying with existing state requirements.  Also, the process has reminded states of their opportunity to regulate and collect fees for these programs.  Now being developed is a national reciprocity agreement, which could have significant policy impact in the future (more on this in next item).

The lawsuit, filed by the Association of Private Sector Colleges and Universities which represents for-profit schools, also challenged the Department’s regulations on incentive compensation, misrepresentation, and state authorization requirements beyond the area of distance education.  The district court had upheld all the Department’s regulations in these areas.  However, the appeals court opinion took issue with some of the Department’s actions related to incentive compensation and misrepresentation.

Draft State Authorization Reciprocity Agreement Available for Comment

The Presidents’ Forum and the Council of State Governments recently released a draft State Authorization Reciprocity Agreement (SARA), and are soliciting public comments on it.  While many details remain to be worked out, the gist of the proposal is that a national reciprocity agreement would be established, with individual states choosing to join or not.  Upon joining, a state would become the “home state” for institutions headquartered there.  The home state would assume responsibility for approving these institutions, and that approval would apply to the institution's operations in other states that are likewise parties to the agreement (“host state”).  Conceptually, if all states participated in this agreement, an institution would need approval in only one state - the one in which it is based.

The draft agreement only addresses issues related to distance education, and would not affect professional licensure requirements.  Each state would continue to set and regulate its own practices in that area.

The process would be overseen by a SARA Policy Board, to be financed by fees on institutions operating in member states.  Additional fees would be collected from institutions that operate in multiple states; and states themselves may charge fees to their home state institutions.

APLU Establishes Commission on Regulation of Postsecondary Distance Education

On May 23, the Association of Public and Land-Grant Universities (APLU) announced the formation of the Commission on Regulation of Postsecondary Distance Education.  The commission will be headed by former Education Secretary Richard Riley, and includes 20 members from academia and state government.  Arthur Kirk, president of Saint Leo University, is serving as the NAICU representative.   Some members of the group have also been working on the draft reciprocity agreement described above, so it's likely the commission will supplement that ongoing effort.