NAICU Washington Update

Postsecondary Distance Education Final Report Released With Recommended Terms for Reciprocity Agreements

April 12, 2013

The Commission on the Regulation of Postsecondary Distance Education released its final report on April 11, bolstering efforts to develop interstate reciprocity agreements that would simplify the approval process for institutions offering distance education programs. Currently, such institutions face a confusing and expensive array of differing state requirements and fees. The commission recommended reciprocity agreement terms that would provide greater clarity and uniformity. 

The commission was formed in May 2012 by the Association of Public and Land-Grant Universities (APLU) and the State Higher Education Executive Officers (SHEEO). Headed by former Education Secretary Richard Riley, it included 20 members from academia, accreditation agencies, and state government. Arthur Kirk, president of Saint Leo University in Florida, served as NAICU’s representative on the commission.

A History of Complications

The commission’s work builds on two previous efforts to disentangle the complicated legal situation facing distance education providers. In 2012, the Presidents’ Forum and the Council of State Governments developed a draft State Authorization Reciprocity Agreement (SARA) that envisioned a national agreement governed by a national SARA policy board. However, because of concerns that the governance structure proposed by SARA might be unwieldy, the regional education compacts - led by the Western Interstate Commission for Higher Education (WICHE) – later developed their own proposals under which the reciprocity agreements would be largely administered at the regional level with some national coordination.

The efforts to develop interstate reciprocity agreements arose from the massive confusion set off by Department of Education regulations dealing with state authorization requirements. In 2011, the distance education provisions of those regulations were struck down in court on procedural grounds and are no longer in force. However, their issuance increased awareness of both the varied and sometimes inconsistent ways in which states regulate distance education, and the often lax enforcement of those requirements. Up to that point, many institutions had given little attention to state requirements related to their distance education offerings, and few states were actively enforcing their own requirements.

Commission Recommendations for Agreement Terms

In its final report, the commission recommended terms for reciprocity agreements. Under those terms, a state choosing to join a reciprocity agreement would assume responsibility for approving the institutions which are domiciled within that state. The approved institutions then could offer distance education in all other states that are parties to the agreement without being subject to further requirements unless the institution has a physical presence in another state or states. A key component of the commission’s recommendations is that “physical presence” be defined as ongoing occupation of a physical location for instruction or administration in a state. Currently, individual states include a wide variety and scope of activities within their definitions of “physical presence,” making compliance with applicable state laws difficult and confusing.

Conceptually, if all states participated in such a proposed reciprocity agreement, an institution would need approval only by its “home” state. If an institution has a physical presence in more than one state, those other states may regulate the instate activity of that institution. Institutions only offering purely online services would be subject to the regulations of just one state.

In general, the commission’s final report marks a positive step toward addressing a regulatory situation that has proven burdensome and confusing for institutions wishing to provide distance education services. However, issues do remain. One concern that NAICU expressed about the commission’s report was that its recommendations relied on the Department’s flawed financial responsibility composite scores as a means for determining whether or not an institution is eligible to participate in a reciprocity agreement. (See the November 2012 final report of the NAICU Financial Responsibility Task Force detailing NAICU’s concerns about the scores.) Art Kirk’s work on that issue did help lead the commission to modify the impact of a one-time score below 1.5 on institutional eligibility in its final report. However, the final report continues to rely on the failed Department standard, leaving a continuing concern for private, non-profit institutions, as expressed by Kirk in the final report. 

The next step toward implementation of reciprocity agreements is an invitation-only gathering in Indianapolis sponsored by the Presidents’ Forum. The April 16-17, 2013 meeting will address the commission’s recommendations, and be aimed largely at the state officials who would be involved in putting the reciprocity agreements into effect.


Art Kirk footnote:

While I support the Commission’s efforts to arrive at a workable interstate reciprocity agreement related to state authority over distance education programs and find merit in the majority of the report, I must register my strong dissent to the final recommendations dealing with Institutional Financial Responsibility. The proposal does not offer even-handed treatment of all institutions—due to its dependence on a portion of the financial responsibility standards for private, non-profit institutions that memorializes in these agreements a partial and deeply flawed metric that needs to be either revised or abandoned and does not apply to public institutions of higher education.

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