NAICU Washington Update

Education Department Again Extends Effective Date of State Authorization Regulations

June 27, 2014

The Department of Education has once again offered a one-year delay in implementation of state authorization regulations. A June 24 Federal Register notice, parallel to one issued last June (See Washington Update, June 18, 2013), explains that an institution can qualify for the delay if the state in which it is located is in the process of establishing an authorization process that is acceptable to the Education Department.

An institution that does not meet the state authorization requirements must obtain an explanation of “how an additional one-year extension will permit the State to finalize its procedures so that the institution is in compliance.” The institution must provide that explanation to Education Department staff upon request. A request for the explanation would most likely be made during an institution’s Title IV recertification review, since enforcement of the authorization requirement is handled through that process.

The state authorization requirements addressed in this notice require an institution to be authorized in the state in which it is located. They do not deal with the authorization of distance education programs. The portion of the state authorization regulations dealing with distance education were struck down in court and are not currently in effect.

A negotiated rulemaking committee recently considered proposed new distance education rules, but failed to reach agreement (See Washington Update, May 22, 2014). New federal regulations dealing with state authorization of distance education programs will not take effect until the current regulatory process is completed. Remaining steps in that process include the publication of proposed regulations, acceptance and review of public comments, and publication of final regulations.

That process will take quite some time to complete. Earlier this week, Education Under Secretary Ted Mitchell indicated that final distance education regulations would not be published prior to November 1. Because of the way HEA regulations work, this means any new regulations dealing with state authorization of distance education could not take effect prior to July 1, 2016.

The requirements that remain in effect, and which are being delayed by the June 24 Federal Register notice, are those requiring 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. Unfortunately, constantly changing and inconsistent interpretations of the regulatory requirements have proven to be confusing to states and institutions alike. Often, an institution is unaware its authorization is in question until an issue is raised during recertification review. The Education Department has declined to make available a list of states that are out of compliance, so—delay or not—the confusion is likely to continue.

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