State Authorization Announcement Leaves Schools Confused on Next Steps

With the Department of Education's (ED) announcement on Monday that 2016 final rules on state authorization took effect—by court order—on May 26, 2019, and that California specifically does not meet the regulatory requirements in the final rules for students enrolled in distance education or correspondence programs, schools are left with a lot of questions. 

First among those is whether schools need to retroactively apply these regulations to past disbursements dating back to May 26 for students who are enrolled in distance education or correspondence programs and live in states that are not compliant with the new regulations. For example, California does not meet the requirement for its residents enrolled in distance education or correspondence courses at out-of-state public or nonprofit institutions, according to ED.

While ED’s notice makes clear that schools should not make any additional disbursements to ineligible students, it is unclear whether schools need to retroactively return funds for disbursements already made prior to ED’s announcement going back to May 26. NASFAA has posed this—and other questions—to ED officials. According to ED's Questions and Answers document, the agency "anticipates updating these questions and answers on an ongoing basis."

Stay tuned as NASFAA continues to publish updates. 


Publication Date: 7/24/2019

Chantelle A | 8/2/2019 10:20:42 AM

Can anyone tell me if this has been resolved? We are ready to send fall disbursements and are unsure if we should wait since the process that was submitted by CA was reported to not meet the requirements.

Judy R | 7/26/2019 11:45:04 AM

This may seem like a stupid question, but does anyone know if this applies to students in "online only" programs, or if it includes students in hybrid programs, or on-ground programs who may only be taking one or two courses online?

James M | 7/26/2019 8:49:08 AM

It is my understanding that if we have physical presence ( 2 extended campuses located in CA), that we can continue disbursing federal aid. Correct?

Cody J | 7/25/2019 10:9:54 AM

@Rita, just California.

Charles M | 7/24/2019 1:10:59 PM

If you are a SARA school, I think CA might be the only state not in compliance.

Sherri A | 7/24/2019 12:53:08 PM

Does anyone know if there is a comprehensive listing of which disclosures are required?

G. Michael J | 7/24/2019 12:5:09 PM

It'll be interesting to see what further guidance says. "Retroactively" seems pretty clear - and unfortunate in this case.

Emily W | 7/24/2019 10:6:13 AM

Hello, if your institution is a member of SARA they have a map and a list of institutions on their website:

Rita B | 7/24/2019 9:26:10 AM

Does anyone know exactly WHICH states are not in compliance?

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