Seven Things You Should Know from the State Authorization Session at the NASFAA Conference

By David Futrell, Training & Regulatory Assistance Staff

In the Federal Requirements for State Authorization session at the 2015 NASFAA Conference, U.S. Department of Education (ED) officials reminded schools that it will no longer delay enforcement of the state authorization requirements. Effective July 1, 2015, schools must demonstrate compliance with the state authorization requirements under 34 CFR 600.9(a) and (b) of the Institutional Eligibility regulations. Here are the top seven things you should know from that session:

  1. State Authorization Required: Effective July 1, 2011, to participate in the Title IV programs, a postsecondary institution in any state must be legally authorized by the state to provide postsecondary education in that state. The state must authorize the postsecondary institution by name (through state charter, statute, articles of incorporation, etc.) to operate educational programs beyond secondary education. Certain exemptions apply to federal institutions such as the United States Military Academy, tribal institutions located on tribal lands, and religious institutions that are explicitly exempted by state law or constitution. See GEN-13-20, GEN-12-13, and GEN-11-05 for additional guidance.

  1. State Licensure or Approval Required: Each postsecondary institution must also comply with any applicable state licensing or approval processes. An institution established as an educational institution by a state agency or entity may be exempt from licensure or approval requirements based on is accreditation, or being in operation for at least 20 years; the state decides whether the institution qualifies for this exemption. An institution established to operate as a business or nonprofit charitable institution in the state must show that the state took an active role in its approval or licensure to provide educational programs beyond the secondary level, and all secondary and postsecondary programs must be clearly distinguishable to current and prospective students. See GEN-13-20, GEN-12-13, and GEN-11-05.

  1. Student Complaint Processes: A state must also have a process applicable to all institutions in the state to review and address student complaints about an institution, including enforcement of state laws, directly or through referrals as determined by the state. If the institution has an additional location in another state, that state must also have a student complaint process in place. See GEN-14-04 and GEN-11-05.

  1. Distance Education: While the court vacated the federal regulatory requirements under 668.9(c) related to distance education, an institution is still required to comply with all state requirements related to distance education offered by the institution in its own state or in any other state. This includes consumer information (see below). See GEN-12-13, Q&A 7.

  1. Consumer Information: As part of its consumer information, an institution is required to make copies of its accreditation and state, federal, or tribal approval or licensing documents available to its current and prospective students (including distance education students) upon request. The institution must also provide its current and prospective students with contact information for filing complaints with its accreditor and its state approval or licensing entity, as well as any other state official or agency that would address student complaints. This information must also be on the institution’s website. This information must be provided for every state in which the institution is located and it must include information for each state in which the institution’s distance education students are enrolled. For example, if the institution offers distance education to students in three states, then it must provide the consumer information and complaint processes for all three states, even if the institution has only one distance education student enrolled in each of those states. See GEN-12-13.

  1. Updating Your ECAR and E-App: The school is not required to update its Eligibility and Certification Approval Report (ECAR) or Application for Approval to Participate in the Federal Student Financial Aid Programs (E-App) right away. The school will update its E-App with information showing its legal and state authorization at the time of its next recertification, whenever that is normally scheduled with ED. It must also provide documentation of its compliance with the state authorization requirements anytime an E-App update is required and needs state approval, such as adding new programs or locations, changes in ownership, etc. Remember that too much documentation slows down the ED approval process; be precise with your documentation (e.g., do not send entire sections of state code). The school may also be requested to provide documentation of its compliance with these requirements during an audit or program review. See GEN-15-10 and GEN-12-13.

  1. Contact Your ED School Participation Team for Further Guidance: If you have any questions regarding the state and legal authorization requirements, you should contact your School Participation Team directly, as this may impact your entire institution’s eligibility to participate in any of the Title IV programs. School Participation Team contact information is available on ED’s E-App website at


Publication Date: 8/12/2015

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