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Non Distance Ed State Authorization Regs Still Impact Distance Ed

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Summary: U.S. Department of Education (ED) regulations governing the state authorization that institutions have to have to participate in federal student aid programs took effect on July 1, 2015. Those regulations only address authorization by states in which an institution is physically located; regulations specific to state authorization of distance education remain on hold. The regulations now in force still have implications for distance education, though; they require an institution to provide its students, including distance education students, with information on where they can go in their states of residence (not just the state in which the institution is physically located) to file a complaint against the institution if needed.

On July 1, 2015, U.S. Department of Education (ED) regulations on the type of state authorization institutions have to have to participate in federal student aid programs took effect. ED originally established the rules in 2010, but repeatedly suspended them until this summer. The department issued those suspensions to give states time to adjust how they authorize institutions to serve as postsecondary education providers, as well as to allow institutions time to make sure they had secured the appropriate state authorization. (A recent post from my colleague at WCET, Russ Poulin, highlights the confusion that institutions still have to navigate in determining if they have the “right” state authorization.)

Distance education providers got some good news, though – only the “regular” state authorization regulations (those that apply to a state authorizing an institution physically located within its boundaries) took effect. The “distance education state authorization” regulation also proposed by ED remains off the books; a court overturned the original version a few years ago, and ED continues to hold in abeyance its potential replacement. (As Russ comments, all signs point to this regulation not surfacing any time soon. The great progress made by states and institutions in addressing the relevant issues via the state authorization reciprocity agreement (SARA) process likely plays at least some part in this decision.)

So, the ability of an institution’s distance education programs to participate in federal student aid still isn’t impacted by whether the institution has secured state authorization in every state in which it delivers those programs. (State law, however, still applies – federal student aid eligibility isn’t specifically at stake, but state enforcement of state laws remains very much on the table, along with any associated penalties.) An aspect of the “regular” regulations does apply, though – the provision of information to students on filing a complaint against the institution with state regulators.

As illustrated by the relevant sections of the ED Q&A on state authorization (please see below), implementation of the “regular” state authorization regulations means that institutions have to provide their students with information on where students – including distance education students - can file a complaint against the institution with the relevant state agency or agencies. In the case of distance education students, this means with the relevant agency or agencies in their state of residence, not where the institution is physically located.

Institutions generally don’t have to worry about ED officials rushing to check their web sites for a listing of student complaint information. As the latest “Dear Colleague Letter” [http://www.ifap.ed.gov/dpcletters/GEN1510.html] makes clear, ED will check for compliance with its state authorization regulations when it conducts standard institutional reviews for federal student aid purposes. The state authorization Q&A also notes that institutions can meet the complaint information requirement by linking to an authoritative listing maintained by a third-party (see the State Higher Education Executive Officers (SHEEO) Association’s state authorization resources site for a possible example). But the burden on an institution providing distance education across state lines is clear – the institution must provide students with reliable information on where they can file a complaint against the institution with the oversight agency or agencies in the state where the student is located.

From “Program Integrity Questions and Answers – State Authorization,” U.S. Department of Education (http://www2.ed.gov/policy/highered/reg/hearulemaking/2009/sa.html)

STA-Q17: Is an institution required to provide consumer information to all students, including students enrolled in distance education?

STA-A17: Yes, an institution must make sure that all of its students are provided with the applicable information that corresponds to their enrollment. The information must be for every State in which the institution is operating, including every State where students are enrolled for distance education.

STA-Q18: If an institution offering distance education in a State has only one student in that State, must it still provide the contact information for that State?

STA-A18: Yes.

STA-Q19: If a student taking a program by distance education moves to another State, must the institution list the contact information for that State in its consumer information? What if the student is temporarily taking the program in another State because, for example, the student is visiting a friend?

STA-A19: Institutions determine that students are still enrolled as a part of the normal disbursement process each payment period. To the extent an institution is aware a student taking distance education has moved to another State, it must make sure the student has access to the State contact information for filing complaints in that State.

C-Q5: Can an institution offering distance education in multiple States satisfy the provisions of 34 CFR 668.43(b) that it provide State contact information for filing complaints by providing a link to a noninstitutional Web site that identifies the contact information for multiple States?

C-A5: Yes, so long as the link is accessible from the institution’s Web site and the link is prominently displayed and accurately described. The institution is also responsible for ensuring that the link is functioning and accurate.

Key Higher Education Act Regulations (CFR: Code of Federal Regulations):

34 CFR 600.9 – State authorization. (a)(1) An institution described under §§ 600.4, 600.5, and 600.6 is legally authorized by a State if the State has a process to review and appropriately act on complaints concerning the institution including enforcing applicable State laws, and the institution meets the provisions of paragraphs (a)(1)(i), (a)(1)(ii), or (b) of this section. (http://www.gpo.gov/fdsys/pkg/CFR-2011-title34-vol3/xml/CFR-2011-title34-vol3-sec600-9.xml)

(For full 34 CFR 600, “Institutional Eligibility,” regulations, see: http://www.gpo.gov/fdsys/pkg/CFR-2011-title34-vol3/xml/CFR-2011-title34-vol3-part600.xml )

34 CFR 668.43 – Institutional information. (b) The institution must make available for review to any enrolled or prospective student upon request, a copy of the documents describing the institution's accreditation and its State, Federal, or tribal approval or licensing. The institution must also provide its students or prospective students with contact information for filing complaints with its accreditor and with its State approval or licensing entity and any other relevant State official or agency that would appropriately handle a student's complaint. (http://www.gpo.gov/fdsys/pkg/CFR-2011-title34-vol3/xml/CFR-2011-title34-vol3-part668.xml#seqnum668.43)

(For full 34 CFR 668, “Student Assistance General Provisions,” regulations, see: http://www.gpo.gov/fdsys/pkg/CFR-2011-title34-vol3/xml/CFR-2011-title34-vol3-part668.xml)