State Authorization for Distance Ed Federal Regulation to be Implemented 07/01/2018

Frequently Asked Questions: Overview and Direction of the Regulations

The U.S. Department of Education is scheduled to implement state authorization for distance education regulations on July 1, 2018. There is still some uncertainty about whether the Department will implement the regulation and, if they do, what institutions need to do to comply. WCET and its State Authorization Network (SAN), the National Commission for State Authorization Reciprocity Agreements (NC-SARA), and the Distance Education Accrediting Commission (DEAC) have asked for clarification from the Department more than once and through different channels.

This Frequently Asked Questions Document provides an overview of the status and a few recommendations on how to proceed on the following topics:

1. 1. The Status of the Regulations – As Best We Know It.
   2. The Federal State Authorization Regulation – What are the Big Outstanding Questions? And What Should We Do?
      • Reciprocity.
      • Complaints.
      • Residence vs. Location.
      • Notifications.

More detailed information will be provided to State Authorization Network members.

1. Topic Area: The Status of the Regulation – As Best We Know It

Q: Will this regulation go into effect?

• The Department and Congress have had numerous opportunities to kill this regulation. We thought they would have done so by now, if that was their intent. We have received mixed signals about the future of the regulation in recent weeks. On March 30, Politico had a convincing report that “state authorization” was one of a handful of regulations that could be “under review” soon. That would likely delay implementation and result in a rulemaking panel to rewrite the regulation. We think this is a likely outcome, but we also predicted they would have acted on it – one way or the other – by now.
• To clarify, neither WCET nor WCET/SAN are recommending a review. We have long believed that complying with state laws and regulations is reasonable.
• As an institution, it is important to remember our mantra for the last year, that: “A regulation is a regulation until it is not a regulation.” Until we are told otherwise, institutions should expect to comply.

Q: What about the bill in the House of Representatives, the PROSPER Act? Won’t that bill do away with this requirement?

• The PROSPER Act will not pass, as is.
• For a bill to go into effect, it must pass the House, the Senate, and be signed by the President. The House Bill is the product of one party. The PROSPER Act is a first attempt at reauthorizing the Higher Education Act, which covers the basic federal regulations for the higher education / federal government relationship. An update (or “reauthorization”) is long overdue. The Senate is working on a bipartisan version of the reauthorization of the Higher Education Act that will likely differ greatly from the PROSPER’s provisions.
• Since it is an election year and summer Congressional breaks are coming, many pundits believe that if reauthorization does not happen by June or, maybe, July, that it is probably dead for this year. Such action is appearing to be unlikely, but this Congress has had a tendency to suddenly produce bills and hurry them through.
• Our current thinking is that reauthorization probably will not happen this year, therefore Congress will probably not change the state authorization regulation.

Q: If Congress does cease requiring federal state authorization, can I stop worrying about state authorization and drop my SARA and WCET/SAN memberships?

• No.
• Regardless of what the federal government does, the states will still have their regulations and will expect you to comply.

2. Topic Area: The Federal State Authorization Regulation – What are the Big Outstanding Questions? And What Should We Do?

WCET, NC-SARA, and DEAC have submitted to the Department of Education a list of questions that would need to be answered and recommendations on changes that should be made. For some of these items, we have heard trusted experts provide opposing opinions on what colleges are supposed to do to comply with the regulatory language. IF the regulation goes into effect on July 1, below are some of the top issues that should have been addressed long before now…because compliance takes time:

2.a. Reciprocity – Will reciprocity be recognized by the Department of Education as a path to demonstrate compliance in a state?

• When the regulation was originally released, it seemed to recognize reciprocal agreements that did prohibit states from enforcing their own laws. Essentially, that would have negated reciprocity since the agreement would lack any enforcement capacity. Shortly after we released our analysis of the new regulation, Department of Education personnel told WCET and NC-SARA staff that we had misinterpreted the meaning of the regulatory language. Instead, they said that their intention was that a reciprocal agreement would not be recognized if there was a “conflict” between state law and reciprocity agreement requirements. Since states joining SARA agree to its provisions, “conflict” is removed before it can join. A letter from the Undersecretary of Postsecondary Education describing this clarification of the Department’s intent was sent to WCET and NC-SARA. While this letter does not hold the force of rule, it is our understanding that Department personnel fully support NC-SARA and, if the regulation goes into effect, that this clarification will be codified. It is highly unlikely that the Department would undermine the will of 48 (soon 49) states, the U.S. Virgin Islands, and the District of Columbia.

What Should You Do? Don’t’ Panic. The Department is very supportive of reciprocity. We expect clarification to be positive for SARA.

2.b. Complaints – Institutions are required to “document” the complaint processes for students in each state, what do we do about states (like California) that do not have a compliant process? Should we stop enrolling students from California?

• If a state has joined SARA, then SARA has processes to handle complaints. California will not join SARA this year and might not next year. California has complaint and oversight processes for out-of-state for-profit institutions, but not out-of-state publics or non-profit institutions. They are aware of the issue, but it will take legislative action to fix it. Such action does not appear to be imminent. This could be a problem if you enroll students in California at a distance.
• If you are at an institution that is not a SARA member, there are other states that do not have a complaint process for you. That could be a problem for enrolling students in those states, as well.

What Should You Do?

• Some have recommended citing the California Attorney General’s office as the handler of complaints. Since that office has openly declined this responsibility, the action might not withstand a financial aid review by the Department of Education.
• Both the Department and California officials are aware of the issue. It is our hope and belief that (if the regulation goes into effect) that they will create some type of accommodation so as not to harm students. If they don’t we should all scream loudly…very loudly.
• We can’t give you an absolute answer on this one as too many possible scenarios. We suggest that you:
  • Count how many distance students that you have or will have in California.
  • Communicate with your institution’s legal counsel.
  • Determine the level of risk that your institution is willing to assume.
  • Act accordingly.
  • Be prepared to act.

2.c. Residence vs. Location – Since state authorization is based upon the location of the student, why does the regulation use “reside” or “state of residence” so often in the regulation?

• This is another one on which state authorization experts have differed in their advice. Some have suggested that institutions need to collect the student’s official state of residence in addition to location. That’s lots of extra work.
• During the 2014 Negotiated Rulemaking Marshall Hill (NC-SARA), Leah Matthews (DEAC), and Russ Poulin (WCET) all served as negotiators or alternates. We made sure that all references in the regulations being developed at that time referenced location and not residence. It is too bad that our work was forgotten. We see this as an error in the current regulation and are urging them to correct it.

What Should You Do? 

• Again, we cannot give you a definite answer, but we should have more clarity soon…we hope.
• Assess the amount of work this would take.
• Determine the level of risk that your institution is willing to assume.
• Act accordingly.

2.d. Notifications – How do we implement the new required notifications?

• Institutions are expected to make several public (via websites) or individualized (direct) communication with the student notifications. There are several details that need to be clarified, such as “what exactly is an adverse action,” “do SARA institutions report state refund policies,” and several questions about notifications for programs that lead to professional licensure or certification.

What Should You Do?

• For programs that lead to professional licensure or notification, the requirements are close to those already required by SARA. Also, the lack of proper notifications on these programs has been the leading cause of student lawsuits against institutions, protect yourself.
  • For SARA institutions, you should review SARA requirements, proceed in determining your program’s applicability in any state you will enroll students at distance for that program. Comply with state regulations. Notify students of your status for that program in his/her state.
  • For institutions that are not a member of SARA, we still think that the threat of lawsuits makes this work worthwhile.
• For the other notifications, if you have not implemented them yet, you may wish to wait for clarification. Again, determine the level of risk that your institution is willing to assume.

Finally…

To be clear, institutions should be preparing for the July 1, 2018 regulations, to the best of their ability, until we hear further information. To that end we have attempted to summarize the aspects of the regulation into somewhat of a check list of requirements for you to download. WCET and WCET|SAN are committed to providing information as soon as it becomes available and guiding institutions through whatever we learn in the upcoming months.

Cheryl Dowd
Director,State Authorization Network
WCET
cdowd@wiche.edu

 

 

Russell Poulin
Director, Policy & Analysis
WCET – The WICHE Cooperative for Educational Technologies
rpoulin@wiche.edu | @russpoulin

 

 

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