State Approval: “Cease & Desist” and “Teach Out”

“It is illegal for you to offer classes in this state.”

Stay Outta My State

That was the essence of a call that a WCET member institution received last week.  A state regulator from another state called the registrar’s office and told the institution that it could no longer register students in the state.  The state regulator added that to do so would be in violation of federal regulations and that it certainly was in violation of state regulations.

The institution is a regionally-accredited, medium-sized state institution offering extensive distance education courses and programs.  It enrolled fewer than ten students in the other state.  Those students were in various levels of completion of an academic program.

“This is terrible for the students,” said the institutional representative.  Course registration was only a few days away and students would need to be notified.  How do you explain this to them?

Together, the institutional representative and I explored the costs of applying to the state.  Approval  to operate in the  state would be by program, not institution-wide.  If the institution decided to get just one program approved, the cost would be around $6,000 in fees plus the cost of a site visit to review the program.  This does not include the many hours to be spent in researching the nuances of the regulation and preparing the application. Meanwhile, approval would take months to accomplish.

A Parachute Emerges – Teach Out

Another representative of the institution contacted the state regulator and was able to negotiate:

• The institution would no longer enroll students from the state until it had the proper authorization.
• The institution could “teach out” (allow the student to continue until completion), as long as the students do not change their major.

At least, this would hold the students harmless.  It also is informative to many of you who asked what to do about students in states where your institution will not apply.  In addition to this story, I have heard encouraging feedback that states will consider a “teach out” proposal.   There is no a guarantee that they will agree to do so.  But you should check the “teach out” requirements of your accrediting agency.  Also, ask the state regulators.  They are more willing to work with those who are open about their institution’s current status and respect the compliance process.

How Did the State Learn about the Infraction?

A potential student learned about the program from a fellow resident of the state in question.  Unlike the handful of students already admitted to the program, the potential student called the state authorization office to see if all was copacetic with the state.  That’s a logical question if you are unfamiliar with the institution. That call prompted the state regulator to do some investigating and to learn about the program.

I hope you noted the potential irony in this story.  State regulation is about protecting consumers wishing to lodge a complaint.  In this case, the regulator probably learned about the program because it had been recommended by a colleague.  Oh well, you can’t blame the state regulator who is charged with upholding the laws of the state.

Reality Hits Home

The administrator from the institution called me with this story.  While the state authorization discussion had been ‘academic’ to this point, the reality of the impact on students became all too clear.

“We are all going to have to make serious decisions.  The only institutions that can afford to be in some states are the for-profits,” said the institutional administrator.  “The way we perceive education must change.  It will be hard to accept a black-and-white business model, but it’s not our call any more.   That’s the hardest part to accept.”

The federal issue has raised the awareness of state regulators about the number of institutions that are operating in their states.   Even if the federal regulation is rescinded or delayed, distance education has entered a new reality.

ADDENDUM (Added April 14, 2011): I received a heartfelt comment from a person whose office has state regulatory responsibilities.  This person thought that this post put state regulators in an extremely bad light.  Since the state was not identified, all state regulators would be covered with the same negative stereotype.  Let me assure you that it was not my intention to do so.  On the contrary, I think it is wonderful that the state regulator depicted in this post was very quickly willing to negotiate a “teach out” agreement that had the students’ best interest in mind.  The lesson for institutions is that while the regulators most uphold their duty, they are also thoughtful people who are willing to work with you within the constraints of their regulations.

Russ Poulin
Deputy Director, Research & Analysis
WCET – WICHE Cooperative for Educational Technologies
rpoulin@wiche.edu
State Approval page:   http://wcet.wiche.edu/advance/state-approval
Twitter:  @wcet_info      State Approval Hashtag: #stateapp

Photo credit:  The Morgue File – http://www.morguefile.com/archive/display/86232