The U.S. Department of Education released its final version of the its long-awaited regulations on “State Authorization of Postsecondary Distance Education, Foreign Locations” earlier today.  They will be published next week with an effective date of July 1, 2018.

What is proposed may be bad for the State Authorization Reciprocity Agreement, but the regulations may be all for naught. It is highly likely that these regulations will be killed in the next few months.

This post will provide some initial highlights and reactions. Additional analyses will be forthcoming.

The Concept of Using Authorization for Federal Financial Aid Purposes

Although our opinion had not been popular in some higher education circles, we have been consistent (see our joint comments with eight other organizations to the Department from August 2016) in supporting the concept that being approved in each state should be a condition to obtaining federal financial aid funds. It is logical that institutions should follow state laws governing institutions serving students in a state. Since authorization laws focus on geography and not modality, focusing on distance education was a mistake. But, that’s a discussion for another time.

The Reciprocity Definition Curtails Reciprocity

A container with several (maybe 47) lumps of coal in it.
47 lumps of coal for the SARA states. Merry Christmas, Your friends at the Department of Education

One of our big worries was that the definition of reciprocity would be changed to meet the needs of a small number of attorneys general who wanted to enforce their own state laws despite being part of a reciprocity agreement. From p. 17 of today’s announcement:

“We have revised the definition of State authorization reciprocity agreement by deleting the words “consumer protection laws” and adding in their place “statutes and regulations, whether general or specifically directed at all or a subgroup of educational institutions.” In addition, we have replaced the word “participating” with reference to a participating State with the word “any” so that a State authorization reciprocity agreement does not prohibit any State from enforcing its own statutes and regulations, whether general or specifically directed at all or a subgroup of educational institutions.”

So, each state agrees to reciprocity as long as it can still do whatever it wants. Imagine a similar reciprocity for driver’s licenses. If you have out-of-state plates you could be stopped at the border and required to take a driver’s test. Not good. This is BAD policy.

Marshall Hill and the NC-SARA staff are examining this language and preparing a statement. Meanwhile, I’m very disturbed that the Department decided to override the judgement of the governors and legislatures of 47 SARA states. Whether through legislation or regulatory rule, states have already made this determination. The attorneys general of a few states loss the battle at home and went to the Department.

This change makes no sense to us. SARA has done more to protect students than anything in recent memory. Harming SARA will merely roll back these gains. Students will be harmed.

The Idea of Forcing States to Conduct an “Active Review” is Dead

The main sticking point of the 2014 Negotiated Rulemaking Committee was that the Department was trying to dictate regulations to the states. Because they would not remove that provision, what was proposed died. In response to a commenter suggesting that the regulations include this requirement, the Department replied:

“We decline to revise the regulations. It is a State’s discretion as to how it may choose to regulate by establishing requirements that exceed the minimum requirements for title IV program eligibility. An institution is responsible for meeting any State requirements and should maintain the applicable documentation.”

Arrrrgh. If they would have agreed 2.5 years ago, they could have had this published then and made it far tougher for the new administration to remove the regulation. Oh well.

The Focus on “Residence” is Not Helpful

The Department’s staff forgot all our discussions from the Negotiated Rulemaking Committee about focusing on “location” and not “residence.” On p. 27 of this regulation, they say:

“For purposes of this rulemaking, a student is considered to reside in a State if the student meets the requirements for residency under that State’s law.”

In defining military residence, they wrote this headscratcher:

“…when determining the State in which the military student resides, the institution may rely on the student’s self-determination unless the institution has information that conflicts with that determination. “

Using the term “residence” will cloud the picture. Their new definition will be confused with the legal residence of the student. Most state laws focus on “location” and those who are inside the state whether they are legal residents or not. As Cheryl asks: “can’t they ask someone who does this work when they write the regulations?”

A New Disclosure on the Consequences of Students Moving

A new disclosure requirement is added on p. 178:

“An explanation of the consequences, including ineligibility for title IV, HEA funds, for a student who changes his or her State of residence to a State where the institution does not meet State requirements or, in the case of a GE program, as defined under 34 CFR 668.402, where the program does not meet licensure or certification requirements in the State.”

More clarification is needed on this one. We can imagine a rather general statement with specific examples that would inform the student that significant harm (loss of aid, inability to qualify for a licensure program exam) if the student moves to another state. We hope that this requirement does not imply the need to explain EVERY possible permutation for EVERY program in EVERY state. We’re not sure the Internet is large enough for this statement.

Complaint Process: Think Twice about Enrolling Students in California

In our comments to the proposed regulations, we worried about states (like California) without complaint processes for students enrolling in out-of-state distance education providers. We worried that those students would be ineligible for Title IV financial aid. They confirmed that worry on p. 38:

“…if a State does not provide a complaint process as described in a State where an institution’s enrolled students reside, the institution would not be able to disburse Federal student aid to students in that State.”

We opined that out-of-state institutions lobbying to implement such a complaint process in California would be fruitless given the state’s penchant to ignore higher education consumer protection demands from its own residents.

All for Naught?

Our guess is that this regulation will be killed very soon. The Congressional Review Act provides a very convenient method for doing so. You can read more about it in a recent post of ours. Rep. Foxx mentioned state authorization as one of many rules the House Committee on Education and the Workforce will seek to overturn.

Again, it’s too bad that we’re caught between those who wish to deregulate everything and those who have never seen a regulation that did not like. The consumer protection folks are losing their regulatory friends. Perhaps they would like to come play with us???

What Should I Do as a Distance Education Professional?

State laws exist either way. You should follow those laws. If you are a member of SARA, keep following the SARA rules.

If future posts, we will give you additional advice on how to proceed (or not).

Most importantly….have a great holiday season and a joyous new year!! You’ve had your lump of coal already.Cheryl Dowd

Cheryl Dowd
State Authorization Network



Russ Poulin
Director, Policy and AnalysisPhoto of Russ Poulin with a bat.
WCET – WICHE Cooperative for Educational Technologies

If you are not a WCET member, come join us!

10 replies on “A Lump of Coal for SARA and Other Goodies in the State Authorization Regulations”

Content aside, this is a very perplexing strategic move by the Department.

As noted above, State Authorization has been a target for Congressional Republicans since 2010 and with CRA you have the added wrinkle that any overturned regulation cannot be re-implemented down the road without new statutory language preceding it.

And then the fact that the actual language will likely alienate whatever allies they did have seems to make the whole thing woefully ill-conceived.

Peter –
We had exactly the same reaction. We have heard that the long-knives are already being wielded on this regulation. Too bad the good is thrown out with the bad.
Cheryl and Russ

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