Proposed Federal State Authorization Language: Provide Your Input

March 20, 2014

As you may know, I was selected to the U.S. Department of Education’s Program Integrity Negotiated Rulemaking Committee.  One of the regulations that we are considering is the federal rules regarding the state authorization of institutions offering distance education.  First issued in October 2010, that regulation (§600.9(c)) was vacated by the federal courts and that ruling was upheld on appeal.  Based on those actions, the Department agreed that it would not enforce the state authorization regulation

It is important to note that the regulation was vacated because it was found that the Department did not follow the proper processes in implementing it.  The Negotiated Rulemaking Committee is the next step in remedying that error.

Provide Your InputThe words "state authorization surrounded by all the state names.
The Department released its new proposed language last night.  In this blog post, I provide both the original language and the proposed new language.  Beginning next Wednesday (March 26), the Committee will begin discussing and debating this language.

Marshall Hill (a fellow negotiator) and I would like your input.

The language in the proposed regulation is often difficult to follow.  You may want to look especially at the text in the “Summary of Change” section to understand what they are trying to accomplish.

Provide feedback in the comment space on this blog or email me.

 

Original Language from §600.9(c) that was Vacated by the Courts

(c) If an institution is offering postsecondary education through distance or correspondence education to students in a State in which it is not physically located or in which it is otherwise subject to State jurisdiction as determined by the State, the institution must meet any State requirements for it to be legally offering postsecondary distance or correspondence education in that State. An institution must be able to document to the Secretary the State’s approval upon request.

 

Proposed New Language from the Department of Education

Note:  The following is the issue paper provided by the Department of Education.  The first part is an explanation of the proposed changes. Everything after the word “Change” is the proposed new regulatory language.

Issue Paper 2

Program Integrity and Improvement Issues

Issue:                          State authorization of distance education providers as a component of institutional eligibility

Statutory cites:           §§101(a)(2); 102(a)(1); 102(b)(1)(B); 102(c)(1)(B) of the HEA

Regulatory cites:        34 CFR §§600.4(a)(3); 600.5(a)(4); 600.6(a)(3); 600.9

Summary of Change:  Section 101(a)(2) of the HEA defines the term “institution of higher education” to mean, in part, an educational institution in any State that is legally authorized within the State to provide a program of education beyond secondary education.  For purposes of title IV of the HEA, section 102(a) of the HEA provides that the term “institution of higher education” means, in part, an educational institution (including proprietary institutions of higher education and postsecondary vocational institutions) in any State that is legally authorized within the State to provide a program of education beyond secondary education.

The previously vacated regulations under §600.9(c) had provided that, if an institution is offering postsecondary education through distance or correspondence education to students in a State in which it is not physically located, or in which it is otherwise subject to State jurisdiction as determined by the State, the institution would be required to meet any State requirements in order to legally offer postsecondary distance or correspondence education in that State.  Furthermore, an institution was required to be able to provide, upon request, documentation of the State’s approval for the distance or correspondence education to the Secretary.

Proposed §600.9(c)(1) provides the conditions under which an institution is considered to be legally authorized by a State to offer any postsecondary education through distance or correspondence education to students in a State in which the institution is not physically located or otherwise subject to State jurisdiction.  An institution is considered to be legally authorized by a State if (1) the State has a process to review and appropriately act in a timely manner on complaints about the institution where the final authority to resolve complaints and enforce applicable State law is with the State; and (2) the institution is legally authorized to offer distance or correspondence education in at least one of three ways:  State-by-State, under a State-to-State agreement, or under a State authorization reciprocity agreement.

Proposed §600.9(c)(2) requires an institution approved  under a State-to-State agreement to notify students  in writing and by prominently posting on its website that it participates in a State-to-State agreement as well as the student complaint process available to the student.  Proposed §600.9(c)(3) requires an institution approved under a State authorization reciprocity agreement administered by a non-State entity to notify students  in writing and by prominently posting on its website that it participates in a State authorization reciprocity agreement as well as the student complaint process available to the student.

Proposed §600.9(c)(4) provides that an institution that solely provides distance education must be also authorized in the institution’s home State.  Proposed §600.9(c)(5) provides that an institution authorized under §600.9(a) or (b) is considered to be legally authorized to offer distance or correspondence education to students physically located in that State.  Proposed §600.9(c)(6) requires an institution to document its State approval or license to the Secretary upon request.

Proposed §600.9(c)(7) provides that institutions exempted from State approval of distance or correspondence education occurring in that State based on accreditation, years in operation, or other comparable exemption would not be considered to be legally authorized.  Proposed §600.9(c)(8) provides that an institution authorized by name to offer distance or correspondence education beyond secondary education by the Federal Government, or under certain conditions, an Indian tribe, is considered to be legally authorized.  Proposed §600.9(c)(9) provides the conditions under which a religious institution that is exempted from State authorization due to an exemption for religious institutions under that State’s law is considered to be legally authorized.

Proposed §600.9(c)(10) provides that an institution that loses its State approval to provide distance or correspondence education in a State becomes ineligible to disburse Federal student aid to distance or correspondence education students in that State, and it would require the institution to provide notice of the loss of eligibility to students and on the institution’s Web site.  Lastly, proposed §600.9(c)(11) sets forth requirements for the case in which a non-State entity administering a State authorization reciprocity agreement ceases to operate.

 

Change:

600.9  State authorization.

*  *  *  *  *

(c)  State authorization of distance or correspondence education providers.  (1)  Subject to paragraphs (c)(2), (c)(3), and (c)(4) of this section, an institution described under §§600.4, 600.5, and 600.6 that offers any postsecondary education through distance or correspondence education to students in a State in which the institution is not physically located, or in which the institution is not otherwise subject to State jurisdiction as determined by the State, is considered to be legally authorized in that State if–

(i)  The State has a process to review and appropriately act in a timely manner on complaints concerning the institution, including enforcing applicable State law, and has the final authority to resolve complaints and enforce applicable State law; and

(ii)  The institution meets State requirements that it be approved or licensed by name–

(A)  By the State to offer postsecondary distance or correspondence education, including programs leading to a degree or certificate, in that State;

(B)  To offer postsecondary distance or correspondence education, including programs leading to a degree or certificate, in that State under a State-to-State agreement administered by the participating States; or

(C)  To offer postsecondary distance or correspondence education, including programs leading to a degree or certificate, by a State that approves and annually reviews the implementation of a State authorization reciprocity agreement administered by a non-State entity; and

(2)  An institution described under paragraph(c)(1)(ii)(B) of this section must inform current and prospective students in writing and by prominently posting on the institution’s website that–

(i)  The institution is participating in a State-to-State agreement; and

(ii)  If the student is not satisfied with the result of the student complaint process provided for under the State-to-State agreement, the student may utilize the student complaint process for distance or correspondence education providers in the State in which the student legally resides.

(3)  An institution described in paragraph(c)(1)(ii)(C) of this section must inform current and prospective students in writing and by prominently posting on the institution’s website that–

(i)  The institution is participating in a State authorization reciprocity agreement administered by a non-State entity; and

(ii)  If the student is not satisfied with the result of the student complaint process provided for under the State authorization reciprocity agreement, the student may utilize the student complaint process for distance or correspondence education providers in the State in which the student legally resides.

(4)(i)  An institution described under §§600.4, 600.5, or 600.6 that solely provides distance education must additionally demonstrate that it is legally authorized to operate in its home State consistent with paragraphs (a) and (b) of this section.  For purposes of this section, the institution’s home State is the State in which the institution’s principal office is physically located.

(ii)  If such an institution changes the State in which its principal office is physically located, the new State in which the institution physically locates its principal office becomes the institution’s home State.  The institution must provide the Secretary with documentation demonstrating that it is legally authorized in its new home State under paragraph (a) or (b) of this section to be considered an eligible institution.

(5)  An institution described under §§600.4, 600.5, or 600.6 that meets the requirements under paragraph (a) or (b) of this section for a State in which the institution is physically located is considered to be legally authorized to offer distance or correspondence education to students physically located in that State. 

(6)  An institution must provide documentation of each applicable State approval or license to the Secretary upon request.

(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.

(8)  The Secretary considers an institution to meet the provisions of paragraph (c)(1) or (c)(5) of this section if the institution is authorized by name to offer distance or correspondence education beyond secondary education by–

(i)  The Federal Government; or

(ii)  As defined in 25 U.S.C. §1802(2), an Indian tribe, with respect to students who legally reside on tribal lands, if the tribal government has a process to review and appropriately act on complaints concerning an institution and enforces applicable tribal requirements or laws.

(9)(i)  Notwithstanding paragraphs (c)(1), (c)(2), (c)(3), (c)(4), and (c)(5) of this section, an institution is considered to be legally authorized to operate educational programs beyond secondary education in a State if it is exempt from State authorization as a religious institution under that State’s constitution or State law.

(ii)  For purposes of this paragraph (c)(9)(i), a religious institution is an institution that meets the requirements of  paragraph (b)(2) of this section.

(10)  An institution described under paragraph (c)(1) or (c)(5) of this section that loses its State approval to offer distance or correspondence education is considered to be an ineligible institution in that State and must immediately inform current and prospective students in writing that it is prohibited from disbursing Federal student aid to students participating in distance or correspondence education in that State because the institution is no longer considered to be legally authorized by that State.  This information must also be immediately posted prominently on the institution’s website.

(11)(i)  If an institution was considered to be legally authorized to offer distance or correspondence education by a State under paragraph (c)(1)(ii)(C) of this section and the non-State entity administering the State authorization reciprocity agreement ceases to operate, the institution is considered an ineligible institution in that State and must immediately inform current and prospective students in writing that it is prohibited from disbursing Federal student aid to students participating in distance or correspondence education because the institution is no longer considered to be legally authorized by the State.  This information must also be immediately posted prominently on the institution’s website.

(ii)  Notwithstanding paragraph (c)(11)(i) of this section, the Secretary considers an institution to remain legally authorized in that State for such additional time as the Secretary determines to be reasonable based on ongoing review of documentation submitted by the institution of steps taken and to be taken by the institution and the State to enable the institution to meet the requirements of paragraphs (c)(1), (c)(2), (c)(3), (c)(4), and (c)(5) of this section, as applicable.

= = = = = = = = = =

As always, regardless of what the U.S. Department of Education does, states still expect you to follow their laws.  Those laws were not vacated.

Thank you!!

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

If you like our work, join WCET!

11 Comments

  1. Tom Dolan
    Posted March 24, 2014 at 8:30 am | Permalink | Reply

    Russ,

    Like Patricia James with California Community Colleges, much of what Texas Tech University does in other states is 100% online with no advertising, recruiting etc. Therefore when Texas Tech seeks authorization for students in states who find us in those states, we communicate by email, letter, etc. saying that since Texas Tech has no ‘physical presence’ triggering activity we do not fall under their review process and no official exemption or authorization documentation will be forthcoming.

    The way I’m reading the proposed wording is that states must review every Institution (program? activity?) regardless of physical presence triggers. And I think it’s saying states must provide proper documentation to each and every institution. Am I right or wrong about each of these? If I’m right about both, then is it correct that my current set of emails/letters saying our institution (in effect) is not going to be reviewed is not sufficient documentation under this new wording?

    I’m also concerned that states may take longer to change policy than DE is willing to allow. And I’m concerned the ‘documentation’ requirement is unclear (extremely unclear in my mind) and therefore institutions will expend unnecessary amounts of efforts for perhaps no reason or simply do nothing. And again states will be reluctant or take a long time to produce documentation.

    Am I correct in saying that the rules are put into effect a quality assurance and improvement plan for Title IV funds for institutions with distance programs and that students have a complaint process for when things go wrong?

    Tom Dolan

  2. Kelley Brandt
    Posted March 22, 2014 at 7:26 pm | Permalink | Reply

    I would like to request that 600.9 (c)(1)(i) be removed from the regulation.

    The distance education teaching institution should not be denied the ability to offer distance or correspondence education to residents in another State if that State does not have “a process to review” complaints and/or does not “appropriately act in a timely manner on complaints.”

    If 600.9 (c)(1)(i) stays in the regulation, the distance education teaching institution would be required to confirm that another State has “a process to review” complaints and/or “acts in a timely manner on complaints.” The teaching institution could also be asked to document how they verified another State has “a process to review” complaints and/or “acts in a timely manner on complaints.” There is no definition of “process to review”, “appropriately act”, or “timely manner” which means the teaching institution could be asked to define these three elements and hope they match the USDOE’s definition during the process of state authorization verification. To assume that every State handles complaints against a higher education institution in the same manner would be foolish. Therefore, a “Dear Colleague” letter may provide some guidance regarding a best case scenario for defining “process to review”, “appropriately act”, and “timely manner” but the teaching institution will most likely find not every State or territory matches the best case scenario and will still need to justify how the teaching institution defined these three elements in each State they claim to be authorized in.

    I would like to request that 600.9 (c)(7) be removed from the regulation.

    If 600.9 (c)(7) stays in the regulation, some States or territories will be required by USDOE to change their laws or regulations in order to create a process for approving or licensing a distance education teaching institution outside of the home State. In addition, every State or territory must provide the teaching institution with a document indicating approval or licensure that includes the teaching institution’s name. The distance education teaching institution should not be denied the ability to offer distance or correspondence education to residents in another State if that State does not have an approval or licensure process.

    Distance education teaching institutions do not have the ability to comply with 600.9 (c)(1)(i) and 600.9 (c)(7). Obviously, change is required at the State government level and there is no guarantee change will occur. Therefore, the teaching institutions would need to stop providing distance education to the States or territories that do not conform with 600.9 (c)(1)(i) and 600.9 (c)(7).

  3. lreburn
    Posted March 21, 2014 at 12:42 pm | Permalink | Reply

    Russ,

    Thank you for keeping us informed and involved.

    If the committee discussion/debate that is set to begin on Mar. 26th doesn’t culminate in any significant changes, do you have any idea of an approximate date that we would have to have APPROVAL from a state as opposed to AUTHORIZATION (which has included exemption)?

    If they don’t give us a significant amount of time to adjust for this change, it seems to me that many institutions and students will be hurt.

  4. Pat Book
    Posted March 21, 2014 at 10:10 am | Permalink | Reply

    “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.”

    What does this mean?

  5. Kathleen Farrell
    Posted March 21, 2014 at 9:14 am | Permalink | Reply

    Is the following language intended to mean that if a state determines that a school does not require authorization for the reasons stated (accreditation, years in operation etc.) that ED will not deem the school to be authorized in that state? That would be concerning.

    “(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.”

    Also, the following requirement can be tricky if the state agency charged with authorizing distance education determines that it does not have jurisdiction over a school (usually for techinical reasons), meaning that its complaint resolution process would not be available to students of that school:

    “(i) The State has a process to review and appropriately act in a timely manner on complaints concerning the institution, including enforcing applicable State law, and has the final authority to resolve complaints and enforce applicable State law;”

    Would ED find the out of state school not to be authorized in that state?

    • Posted March 21, 2014 at 10:24 am | Permalink | Reply

      My reading of what this means….
      For section 7, it is my read that those states that currently exempt certain types of institutions offering distance education in their state could no longer do so. The state would have to perform some type of review.

      For your second question, the idea is that the state authorizes the institution. The state needs to have a complaint process to handle complaints from any institution in authorizes. The state cannot declare that it has no jurisdiction unless if fits the definitions of federal or tribally-controlled institutions listed elsewhere in the regulation. Yes, if the state does not have an complaint process for an institution, the state may consider it authorized, but the institution would not be eligible for federal financial aid funds. To much consternation and disagreement, the Department has been pushing this position since 2010. See: http://wcetblog.wordpress.com/2014/02/14/untangling-two-state-authorization-rules/
      Russ

    • lsucekathy
      Posted March 21, 2014 at 12:49 pm | Permalink | Reply

      As Greg Ferenbach pointed out in a recent email, the language in section 7 is a significant change from the current rule.

      A lot hangs on the word “comparable” in section 7. In many instances in our state auth process, our program satisfied state regulations for providing distance courses, or did not trip specific provisions (like physical presence rules) that warranted more intensive scrutiny. We were thus ‘exempt’ from an application or review process designed to closely regulate a different kind of educational entity or activity. Some of these states sent us a letter or email confirming the exempt status, but some have not, presumably because they don’t have a process/staff/structure in place for doing this.

      Is the DOE saying that states cannot legislate distinctions between different types of educational providers and academic programs? Or that they cannot exempt any institution except through state-to-state agreements?

      I hope the distance community (and state boards of higher education) give the rulemaking committee plenty of feedback on this change.

  6. Posted March 20, 2014 at 5:25 pm | Permalink | Reply

    Thank you Russ,
    It seems that no matter what we think now, we are required to have authorization from any state from which our students take courses. There seems to be a disconnect, and has been from the beginning of this mess, that some of us advertise in other states and/or set up a recruitment effort in states other than our own.

    For many of us, however, students find us. Public state funded schools that offer online programs rarely advertise out of their own states. It’s too bad that there can’t be come kind of provision for those who advertise/operate in other states to be separated from those of us who don’t advertise or operate in other states, but students find us on their own.

    I say that, because as the Calif. Community Colleges enter into the new arrangement of a online course exchange among ourselves, there will be students who find us as a great alternative when they need a course here or there. Will SERA be the solution for us in that case?

    I am sorry, I don’t have much to offer, but trust that you will use good judgement in representing us, as you have always done.

    Patricia James
    Calif. Comm. Clg. Online Education Initiative Launch Team Member
    WCET Fellow

  7. Edward A. Bachmann
    Posted March 20, 2014 at 5:06 pm | Permalink | Reply

    I may have missed something in the language or recent discussions, but what is the difference between a ‘State Reciprocity Agreement’ and ‘State-to-State Agreements’? Is it technically the same, just a different document/law defining who is a party to the agreement?

    If a college were meeting the State Authorization requirements by using all three types of agreement to cover all the needed states in which they expect to have students, it sounds like they need to post that agreement information listed by the type of agreement. That sounds like it will be confusing to students…and do they care how you are authorized?!

    Thanks, Russ.

    • Posted March 20, 2014 at 5:58 pm | Permalink | Reply

      Good question Edward. Here’s what I think they mean.
      1) A “State-to-State” agreement would be an agreement directly between two (or possibly more) states to recognize each others’ authorizations. For example, I have heard that there is such an agreement between Missouri and Kansas. This includes the language “administered by the participating States.”
      2) The “state reciprocity agreement” includes the language “administered by a non-State entity.” That seems to be aimed at agreements like the State Authorization Reciprocity Agreement being administered by the regional compacts.
      Actually, both are technically state-to-state agreements, but the difference seems to be in scope (few states vs. lots of states) and what entity administers them.
      As for notification, I think the idea is that the student has to be notified about how your institution is authorized in their state.
      Russ

5 Trackbacks

  1. […] Department originally proposed that states could no longer exempt institutions based upon accreditation, years of service, or […]

  2. […] is the new language as released by the Department without track changes.  You can see what they originally proposed in March in an earlier blog […]

  3. […] 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 […]

  4. […] « Proposed Federal State Authorization Language: Provide Your Input […]

  5. […] released an issue paper to help explain the changes, and WCET has posted both the issue paper and the proposed ruling on its site. Emphasis added in all bold text […]

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