ED Issues State Authorization of Distance Education NPRM

By Jill Desjean, NASFAA Policy & Federal Relations Staff

On July 25, the Department of Education (ED) released a Notice of Proposed Rulemaking which proposes amendments to the State Authorization sections of the Institutional Eligibility regulations issued under the Higher Education Act (HEA) of 1965, as amended, with an aim toward clarifying the requirements for institutions of higher education to obtain state authorization for distance education, correspondence courses, and foreign additional locations and branch campuses. Included in these proposed regulations is a definition of state authorization reciprocity agreements as well as language permitting states to meet state authorization requirements using state authorization reciprocity agreements for offering distance education outside of the state in which the institution’s main campus resides. The proposed regulations also add several institutional requirements for documenting processes for student complaint resolution as well as a number of institutional disclosures for distance education students in the interest of transparency and consumer protection.

This proposal offers some changes and additions to the 2010 regulations. Where the negated section of the 2010 regulations required distance education programs to meet the legal requirements for offering postsecondary distance education in the state(s) in which they operated, the 2014 proposed regulations add that those requirements are considered to have been met if state authorization reciprocity agreements are in place. Currently forty states plus the District of Columbia have entered into a State Authorization Reciprocity Agreement (SARA) administered by the National Council for State Authorization Reciprocity Agreements.

Also added in the proposed regulations are consumer protections requiring institutions providing distance education to document that there is a state process for review and appropriate action on student complaints, either for each state from which the institution enrolls students or via a state authorization reciprocity agreement.

Under the new regulations institutions with an additional location or branch campus in a foreign location would be required to obtain legal authorization to operate by an appropriate government authority in that country. Those institutions whose foreign additional campuses or branches offer at least fifty percent of an educational program would also be subject to at least annual reporting of the establishment of any foreign additional locations or branch campuses to the state where its main campus resides.

Finally, the proposed regulations update the General Provisions with a total of 10 new institutional disclosures for programs offered solely through distance or correspondence education, seven of which are public disclosures and three of which are individual.

The public disclosures, whose form and content are to be determined, would require institutions to make available:

  1. Whether they are authorized to provide an educational program in each state in which that program’s students reside or whether they are authorized through a state authorization reciprocity agreement;
  2. A description of either the process for submitting consumer complaints in the state the institution’s main campus is located or the process described in the state authorization reciprocity agreement (where applicable);
  3. A description of the process for submitting consumer complaints in each state where enrolled students reside;
  4. Adverse actions initiated by a state entity for the five preceding calendar years;
  5. Adverse actions initiated by an accrediting agency for the five preceding calendar years;
  6. All state refund policies by which the institution is bound; and
  7. For each state in which enrolled students reside, the licensure or certification requirements for the occupation the program is intended to prepare students and whether the program satisfies those licensure or certification requirements.

Disclosures to individual students include:

  1. For prospective students only, if the program does not meet his or her state’s licensure or certification prerequisites;
  2. For both enrolled and prospective students, if the program has been subject to adverse state or accrediting agency action; and
  3. Determination that the program no longer meets state licensure or certification prerequisites.

Institutions would be required to collect acknowledgement of receipt from students receiving the individual disclosure that their program does not meet state licensure or certification requirements.

Comments on these proposed rules are due August 24, 2016.


Publication Date: 7/29/2016

Crystal B | 8/11/2016 3:56:30 PM

Could NASFAA share what level of advocacy efforts are happening regarding this proposed regulation?

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