The U.S. Department of Education recently released new regulations regarding the state approval of out-of-state institutions operating in each state. These regulations put some expectations both on states in regulating those out-of-state institutions and the institutions in meeting the regulations of each state in which it “operates.”
As representatives from the U.S. Department of Education observe, most of this is actually NOT NEW. There has always been an expectation that institutions follow the state laws in which they operate. What is new is that the U.S. Department of Education is putting institutions on notice that they could be asked for proof of being approved to operate in specific states. Failure to provide the proof to operate in a state will put the federal financial aid eligibility of students residing in that state in jeopardy.
While this might not be new, the letter of the law has not been followed completely either by states or institutions.
So, what do we know about the current state of this state regulatory process? What is the impact on state regulators and what is the impact on institutions? What does it mean to “operate” in a state? Three surveys give us a clue.
Impact on State Regulators
Earlier this year, the Western Association of Schools and Colleges (WASC), a regional accrediting agency, sought the advice of the Kessenick, Gamma, and Free law firm about the state approval regulations while they were still being considered. They evaluated the impact on the state licensure schemes in each of the fifty states. Please note that this survey was performed on the proposed regulations, but most of the provisions survived to the final regulations that were recently published.
What did they find?
“The results of the State-by-State analysis are as follows:
- the laws of twelve (12) States will, in our opinion, comply with the Proposed Regulation;
- the laws of six (6) States will, in our opinion, clearly not comply with the Proposed Regulation;
- the laws of thirty two (32) States will probably not comply with the Proposed Regulation (i.e., it is doubtful that the laws of these States will comply with one or more of the four criteria).”
Again these are results of a survey conducted before the regulations were made final, but it seems apparent that significant work will be needed in many states. See the full report to determine how your favorite states fared. Thank you to Barbara Beno of WASC for sharing this information with us.
A new report released earlier this week by the Council for Higher Education Accreditation provides some assistance on these issues. “State Uses of Accreditation: Results of a Fifty-State Inventory” provides an updated look state approval processes, but, understandably, does so from the accrediting agencies point-of-view. The report is helpful in updating state requirements and the list of licensure/approval agencies for each state.
While states can address these regulations individually, another option is for the creation of reciprocal agreements among states to ease the approval process. For example, the Southern Regional Education Board’s Academic Common Market/Electronic Campus might provide some relief for Southern states. Conversations about how to create more interstate compacts have just begun and WCET is participating in these discussions or trying to follow them.
Impact on Institutions
Each state uses its own laws to determine whether an institution is legally operating within a state. In the 2006 survey “A Survey and Report on the Bases for the Assertion of State Authority to Regulate Distance Education” by the Dow Lohnes law firm, they asked several questions about which activities would trigger each state’s licensure laws. Thank you to Mike Goldstein and Ken Salomon for sharing this report with us.
As can be seen by the following results, the regulations and notion of ‘physical presence’ across the states is quite variable. Again, these results are old, but contain the best evidence on this issue that I have seen to date.
- “Would enrolling state residents in a strictly online class, considered alone, constitute a presence sufficient to require some type of licensure?” To this questions, 23% of the states said that this would be enough to exercise jurisdiction.
- “Assuming an intent to enroll students from the state, would television, radio or print advertising in local medias, considered alone, constitute a presence sufficient to require some type of licensure?” To this question, 51% of the states said that this would be enough to exercise jurisdiction.
- “Assuming an intent to enroll students from the state, would requiring students to take examinations at a location within the state, considered alone, constitute a presence sufficient to require some type of licensure?” To this question, 80% of the states said this would be enough to exercise jurisdiction. This could be a problem for some distance courses that use local proctors to administer tests.
- “Assuming an intent to enroll students from the state, would participating in college fairs, considered alone, constitute a presence sufficient to require some type of licensure?” To this question, 33% of the states said that this would be enough to exercise jurisdiction. This is my favorite result. It has nothing to do with distance education, but do you really think any state is checking on which institutions participate in college fairs?
So, What Should We Do?
First, we will learn many more details in the December 7 free WCET webcast: “Clarifying Federal Regulations on State Approval for Distance Education.” Fred Sellers, U.S. Department of Education, wrote the new regulations. He will us understand what is intended and will answer questions.
Next, I think that the states (both individually and in partnerships) will need to figure out how they will address the regulations. Different groups are having discussions on this including The State Higher Education Executive Officers, The Presidents’ Forum of Excelsior College, SREB, and WICHE. As plans get more concrete (or even less murky), I’ll let you know.
Meanwhile, institutions should be reviewing where they are enrolling students who obtain financial aid and what state approvals they may currently have in pocket.
Finally, while these regulations go into effect June 30, 2011, we should be glad that there are opportunities for institutions to request extensions to this deadline in states where authorization cannot be granted on time. I think we’ll be using those extensions.