NAICU Washington Update

Final State Authorization of Distance Education Regulations Published

January 18, 2017

(Updated January 25, 2017)

The long-awaited final regulations for the state authorization of distance education programs were issued by the Education Department on December 19, 2016.  

Scheduled to go into effect on July 1, 2018, the final regulations are similar to earlier proposals, with a few minor changes. The final regulations enact five policy changes that:

  • Require institutions offering distance education or correspondence courses to be authorized by each state in which the institution enrolls students, if such authorization is required by the state. Colleges have the ability to receive state authorization via participation in a state authorization reciprocity agreement.
  • Define the term “state authorization reciprocity agreement.” Although the definition is mostly understandable, confusion surfaces when deciphering the clause regarding a state’s ability to enforce its own statutes and regulations.  State authorization reciprocity agreements “do[es] not prohibit any State in the agreement from enforcing its own statutes and regulations, whether general or specifically directed at all or a subgroup of educational institutions.” In response to this confusion, the Obama Administration issued a clarification to alleviate concerns that the existing National Council for State Authorization Reciprocity Agreements (NC-SARA) would not comply with the regulations. The guidance, welcomed by close observers of NC-SARA, has been viewed as addressing their concerns. 
  • Require institutions to document individual state processes for resolving complaints for students enrolled in programs offered via distance education. Institutions will be responsible for compiling and maintaining a list of states with acceptable processes—the Education Department will not publish a comprehensive list or database of acceptable state complaint systems. 
  • Require foreign branch campuses to be authorized by an appropriate government agency in the country where the campus is located and, if offering at least half of an educational program at the foreign location, be approved by the institution’s accreditor and reported to the home state.
  • Require institutions to provide both public and individualized disclosures to enrolled and prospective students regarding its programs offered solely through distance education or correspondence courses. A list of the disclosures can be found here

With the release of the final regulations occurring so late in the Obama Administration, their future is unclear. It is possible that they will either be struck down by Congress or relaxed by the Trump Administration. More information on the possible options for deregulatory actions can be found here.

The state authorization of distance education regulations are more than six years in the making, dating back to October 2010, when the policy was included as a part of the program integrity final regulations. A federal judge struck down the distance education parts of those regulations on procedural grounds in July 2011; the ruling was upheld by the courts in June 2012. As a result, the Education Department was required to use the negotiated rulemaking process to effect the desired policy changes regarding the state authorization of distance education.  The negotiated rulemaking process was begun in 2014. After several years, the Education Department released proposed regulations in July 2016, and finalized the regulations in December 2016. 

Independent colleges must be particularly vigilant about maintaining compliance with the final regulations. According to information released by the Education Department:

  • More than 750 independent colleges and universities offer more than 6,500 distance education programs 
  • More than 607,000 students are enrolled exclusively in distance education programs offered by private, nonprofit colleges and universities 
  • More than 333,000 (55%) of the students are enrolled in out-of-state programs
  • A significantly greater proportion of students enrolled exclusively in out-of-state distance education programs attend private, nonprofits (55%) versus public 4-year colleges (21%) or community colleges (7%).