Proposed State Authorization Regulations: The Good, the Bad, and the Ugly

March 24, 2014

On March 20, I posted the new  language proposed by the U.S. Department of Education staff regarding federal requirements for the state authorization of distance education.  In that post, I asked for comments and I received quite a few. I apologize for not responding to everyone personally, but I appreciate your questions and input.

In this blog post, I will focus my reactions on a few of the most important topics…the good, the bad, and the ugly.  (In case you need background music while reading).

If I don’t cover your question or comment, I still have them in mind.  Anything written here should be taken as my personal interpretation and opinion.  Unless otherwise stated, the content of this post does not reflect the opinions or positions of the Negotiated Rulemaking Committee or the Department.

Proposed Language Came from the DepartmentThe words "state authorization surrounded by all the state names.
Some assumed that the U.S. Department of Education’s  Negotiated Rulemaking Committee (of which I am a member) had a hand in drafting the proposed language.  We did not.  We will consider this draft language at a meeting this week with a plan to try to finalize it at an April meeting.

I have heard from a few of the other negotiators and we were surprised at the length and depth of the regulations proposed by the Department.

Don’t Treat Distance Education Differently Unless Absolutely Necessary
Before getting to the details, I need to reiterate that distance education should not be treated differently just because it is a different mode of instruction.  This has been a recurring theme of mine.  If distance education is treated differently, there needs to be a good reason to do so.

The Good – The Idea of Reciprocity is Embraced
In the first section, reciprocity agreements among states are specifically mentioned as paths toward authorization.  While reciprocity has previously been deemed sufficient in Dear Colleague letters issued by the Department,  this is the first time that the Department has suggested that it be part of the regulation.

I received several questions about the mention of two types of reciprocity:

  • A “State-to-State agreement administered by the participating States” — I have heard of pairs of states agreeing to recognize the authorization of each other’s institutions.
  •  A “State authorization reciprocity agreement administered by a non-State entity” — This reflects the State Authorization Reciprocity Agreement operated by the regional higher education compacts or SECCRA, which is operated by the Southern Regional Education Board.

Both are agreements among states, but the Department seemed to think it is necessary to separate these out by what type of entity administers the agreement. Personally, this division seems unnecessary.

There are other requirements for reciprocity, such as posting notices about participating in a reciprocity agreement, posting notices if an institution loses its authorization gained from a reciprocity agreement, and the procedures if a reciprocity agreement administered by a non-state estimate ceases to exist.  Some of those requirements may be redundant with other regulations, but the good news is that reciprocity is seen as a key alternative in allowing institutions to obtain the necessary approvals.

The Bad – No More Exemptions for Distance Education Institutions
I received several questions about this proposed language:

(7)  An institution is not considered to be legally authorized to offer postsecondary distance or correspondence education in a State if it is exempt from State approval or licensure requirements based on accreditation, years in operation, or other comparable exemption.

Phil Hill of the e-Literate blog wrote a nice piece on this issue.  As I read the above language, this would mean that states that now use exemptions for distance education could no longer do so.  If implemented, this would call into question the status of all the institutions serving students in those states.  Phil Hill states that the proposed regulations “would represent a dramatic increase in federal control of distance education and compliance burden for institutions.”

This is a huge issue and I disagree with it for the following reasons:

  • The federal government is overriding local judgment of the acceptance of exemptions.  This is “big stick” that the Department should be careful in employing.  If exemptions are inadequate, then there needs to be adequate proof of such a claim.  To date, I have seen none.
  • This requirement employs thinking that is inconsistent with §600.9(a), which details the situations in which a state may exempt certain in-state institutions from authorization.  If the state can be trusted to exempt an institution that has a sprawling physical infrastructure and enrolls 20,000 students within its own state, why can’t that same state be trusted to exempt an institution that has no physical infrastructure and serves 2 students in the state?  There is only one answer:  distance education is being treated differently.  It should not be.
  • From a practical point-of-view, I don’t think the Department is aware of the massive burden and confusion that this one little sentence will cause.  States will need to write laws and regulations, develop administrative processes to review institutions, hire staff to conduct the reviews, and likely will need to pay for it from new fees that will be passed along to students.  Institutions and (more importantly) their distance students in the states that used exemptions would be in a state of limbo.  They will be waiting while the state develops a new process and the institution decides whether to comply.  If there were evidence that this disruption would help students, I would be all for it.  I have not seen that evidence.

How big will the lack of exemptions be?
I had Marianne Boeke from NCHEMS (and helps me with state authorization work) do a quick analysis of the states that use exemptions…and it all depends on how you count.  At least 19 state regulatory agencies would definitely be affected and it is a good guess that at least another ten would need to change processes.  For another handful, it is unclear.  In the Phil Hill article, Greg Ferenbach (Cooley, LLP)  is cited as saying that three-quarters of the states would need to make changes. An estimate of 25 – 40 states seems reasonable.  That’s a big impact.

Allow Exemptions by Name?
Now…allow me to be seemingly inconsistent.  Since authorization has a basis in protecting consumers (in this case, students), I can see the need for the Department to require states to identify those institutions that are exempted by name.  Yes, this does place an extra burden on those few states who do nothing.  However, I wonder how adequate the consumer protection scheme could be in a state that is unaware of which institutions are serving their constituents.

The Ugly – More Questions than Answers (But It’s Still Early)
I’m a sucker for elegant language.  I recently read “James Madison and the Struggle for the Bill of Rights” by Richard Labunski.    I came away for a new-found appreciation for the elegance of the wording in the first ten amendments to the U.S. Constitution.   Madison and his committee started with more than 200 proposed amendments, many of which were very long.  They finished with twelve amendments (only 10 were ratified) and trimmed the wording to the essential concepts. Phil Hill observed that the proposed regulation “would replace these 75 words with 1,086 words of new requirements.”

Less is often more.

The extra words seem to have raised more questions.  Since I’ve gone on too long already, I’ll keep these short:

  • The Department needs to do more education with states and institutions on what they expect from the complaint process.  States are supposed to have a third-party complaint process in place by July of this year.  It is amazing how many higher education leaders do not know this.
  • Why is an institution held to be at fault for a state not adopting a complaint process that is acceptable to the Department?
  • What all is included in the need to be authorized?  Single credit courses, practical experiences in other, courses part of multi-state joint degree program, courses that are part of an enrollment sharing consortium?
  • Does “in writing” mean “on paper?”
  • What does a notice being “prominently displayed on website” mean?
  • The term “where the student legally resides” would change state authorization law from where the student is to where there place of legal residence. This is not consistent with many state laws and past guidance.  That was not the intent is it?
  • What about students who are members of a tribe, but do not reside on tribal lands?  What about tribal colleges that are not on a tribal lands?
  • Do you plan to educate people that “religious institutions” means only those that “awards only religious degrees or certificates”?  (See 600.9(b)(2))
  • Why is the losing authorization requirement applied only to institutions offering distance education?  Why is not applied to all institutions?
  • Why is the notice about the ending of a reciprocity agreement applied only to the reciprocity agreements administered by a non-state entity?  Why is it not also applied to agreements administered by states?

Final Word – Keep Going  with Your Authorizations
I was asked if institutions should hold up on their authorizations.  I say keep going.  It looks like the Department wants to bring it back.  If you wait to put your applications in with all of those who wait until the federal regulation is in place, don’t expect the states to do you any favors.  You are better off being ahead of the coming on-rush of applications.  Remember, regardless of what happens with the federal regulations, states still expect you to follow their laws.

Enough for now.  It should be an interesting week.

Thank you!

Russ Poulin
Interim Co-Executive Director
WCET – WICHE Cooperative for Educational Technologies
rpoulin@wiche.edu

If you like our work, join WCET!

2 Comments

  1. Jesse Arman
    Posted March 31, 2014 at 9:43 am | Permalink | Reply

    Russ – as always, I can depend upon you for a clear interpretation of new regulatory muck.

    Jesse

    Dr. Jesse B. Arman
    Vice President, Regulatory and Government Affairs
    College for Financial Planning
    Centennial, CO
    303-220-4823

  2. Posted March 24, 2014 at 11:36 am | Permalink | Reply

    Has there been any consideration of what constitutes a “comparable exemption” (quoting from proposed §600.9(c)(7))?

    If this language was adopted as is, and if I were a state authorization officer, I would make the case that the listed examples (accreditation and years in operation) are marks of quality and sustainability. Common exemptions such as religious emphasis or lack of physical presence are not comparable to the provided examples (lets call them marks of jurisdiction or lack thereof). Therefore states and institutions could loophole there way out of legal authorization if they argue that many of their stated exemptions are not comparable.

    Is this wishful thinking from someone who just combed the applicable regulations and statutes for each state? Probably. But it was just a thought.

3 Trackbacks

  1. […] exemption” (such as lack of “physical presence” in a state). There was worry about the impact on state, institutions, and students about such a regulation since we estimate that about 45 states […]

  2. By News | on April 8, 2014 at 12:22 pm

    […] https://wcetblog.wordpress.com/2014/03/24/authorization-good-bad-ugly/ […]

  3. […] The U.S. Department of Education’s Negotiated Rulemaking Committee is discussing the possible return of the federal regulation requiring institutions to be authorized in each state in which it enrolls students eligible for Title IV financial aid. Just prior to the March meeting, the Department released a first draft of proposed regulatory language. After giving you a chance to comment, I gave you my opinions. […]

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