State Authorization of Distance Education

In December 2016, the Department of Education released final regulations regarding the state authorization of distance education programs and foreign branch campuses. The final regulations for foreign branch campuses went into effect on July 1, 2018. Originally, the Obama-era regulations for distance education programs were also set to go into effect on July 1, 2018, but the Trump Administration delayed the effective date of the rules for two years. The National Education Association sued over the delay, and a judge ruled against the Department, thus forcing the agency to implement the Obama-era regulations.

Several months before the court ruling, the Department established a negotiated rulemaking committee to revise the regulations. 

This negotiated rulemaking took place in early 2019, and negotiators reached consensus on a variety of changes to the rules. The Department published a proposed rule based on the consensus language, and the agency has indicated that it intends to expedite publication of those regulations and allow for early implementation once the proposed rule is finalized.

As a result, the 2016 regulations are expected to be in effect for only a brief period of time. Both the 2016 and 2019 rules are described in more detail below.

2016 Regulations
 
The now implemented final regulations published in 2016 were more than six years in the making. 
 
The 2016 regulations:

  • 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.
  • Provide a college the ability to receive state authorization via participation in a state authorization reciprocity agreement.
  • Define the term “state authorization reciprocity agreement.” Though the definition is relatively straightforward, it does contain the confusing clause that any state authorization reciprocity agreement “does 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.” What this definition will mean for the most comprehensive state authorization reciprocity agreement, NC-SARA, remains to be seen.
  • Require institutions to document individual state processes for resolving student complaints for students enrolled in programs offered via distance education.
  • Require foreign branch campuses to be authorized by an appropriate government agency of 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. 

The requirement that institutions offering distance education must document a state complaint process has caused significant problems for online students in California. Because California lacked the federally required process for handling student complaints against out-of-state institutions, approximately 80,000 students were at risk of losing federal financial assistance when the 2016 regulations were unexpectedly implemented. In response, California moved quickly to establish a new process for addressing such complaints. After a period of uncertainty, the Department granted conditional approval to California’s plan based in part on the fact that the state’s process complies with the 2019 proposed rules. The Department has also indicated that it intends to expedite publication of final regulations and allow for early implementation.

2019 Regulations

The regulations governing state authorization of distance education were the subject of much debate during the 2019 negotiated rulemaking sessions. In general, negotiators were divided between those who believed the regulations are important for consumer protection and those who expressed concern that the regulations were overly burdensome and ineffective. Ultimately, negotiators reached consensus on a variety of rule changes, including amendments intended to clarify that institutional disclosures should be based on the state where students are located, as opposed to their state of residence. Negotiators also agreed to eliminate the requirement that institutions offering online education in another state must document that that state has a process for reviewing complaints against the institution or that the state participates in a reciprocity agreement. 

In addition, negotiators reacehd consensus on multiple changes to the disclosure requirements. Some of these requirements would be made applicable only to at-risk institutions, while others – including disclosures regarding state licensure and certification requirements and state complaint procedures - would apply to all institutions of higher education, including those that do not have distance education programs.  

The Department published a proposed rule based on the consensus language in June 2019, and the agency has indicated that it intends to expedite publication of those regulations and allow for early implementation once the proposed rule is finalized.

About

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

History

The regulation of state authorization of distance education programs was originally included in the Department of Education’s 2010 program integrity regulations. Due to various legal and operational roadblocks, final regulations governing state authorization of distance education programs have been delayed multiple times over the years.

In 2011, the distance education piece of the regulations was struck down by a federal judge. The Court ruled that the Department had violated the Administrative Procedure Act by failing to include the distance education requirements in the overall state authorization regulations made available for public comment. The action was upheld on appeal in June 2012.

As a result, the Department of Education was forced to return to the negotiated rulemaking table in order to develop regulations related to the state authorization of distance education, which it did in March 2014. Citing the complications associated with the development and implementation of the distance education regulations, Under Secretary Ted Mitchell announced in June 2014, that the Department of Education would “pause” on the state authorization rule on distance education.

After a two-year hiatus, the Department of Education released a new set of proposed regulations in July 2016. The final regulations were scheduled to go into effect on July 1, 2018, but the Department delayed implementation of the distance education portion of the regulations until July 1, 2020. (The regulations regarding state authorization of foreign branch campuses are not subject to this delay and went into effect on July 1, 2018.) However, litigation forced the Department to implement the Obama-era regulations, which retroactively became effective as of May 26, 2019.

Meanwhile, in early 2019, the Department established a negotiated rulemaking committee to revise the regulations governing state authorization of distance education programs.  Based on the consensus reached during negotiated rulemaking, the Department published a proposed rule in June 2019.

Legislation to repeal the regulations related to state authorization of distance education has been introduced in each of the last several congressional sessions.  Most recently, provisions to repeal the regulations are included in the House Republican proposal to reauthorize the Higher Education Act, although no such provisions appear in the House Democrats' alternative reauthorization proposal.

In response to the multiple delays in implementation of the state authorization of distance education regulations, 49 states, and nearly 2,000 institutions, have joined the State Authorization Reciprocity Agreement (SARA) as a means to ease compliance with the potential regulations.

In the News

In the News


NAICU Washington Updates

What You Can Do

  • Determine whether your institution is located in a state participating in the State Authorization Reciprocity Agreement (SARA) and decide if you wish to become a participating institution, if located in a covered state.
  • If not in a SARA state, review your student profiles to determine whether or not you need to be authorized in another state.

NAICU Contact

Jody Feder: Jody@NAICU.edu
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