Breaking news! The 2016 Federal regulations for State Authorization of Distance Education have been delayed. Today we are joined by Cheryl Dowd, Director of WCET’s State Authorization Network (SAN), to discuss what we do know about the delay and provide further information. Thank you Cheryl for today’s post!

Enjoy the read and enjoy your day,

– Lindsey Downs, WCET

It’s Like Groundhog Day

The 2016 Federal regulations for State Authorization of Distance Education, initially to be effective July 1, 2018, have been delayed for two years. The Department proposes another round of negotiated rulemaking to amend regulations governing legal authorization of institutions by States and amend regulations for state authorization of distance education.

Bill Murray in the 1993 movie
Bill Murray in the 1993 movie “Groundhog Day” (Photo: Columbia Pictures)

Here we go again! Déjà vu!

Does living through the Federal regulation of State Authorization of Distance Education feel like the movie Groundhog Day to all of you? Phil Connors, the hapless weatherman played by Bill Murray, re-lived the same day over and over again! So, I “googled” the movie to see how long Bill Murray was caught in the loop. The movie’s director, Harold Ramis, said that Bill Murray’s character was trapped for 10 years! We are all Bill Murray, or if you are a fan of the Broadway musical version, like me, we are Andy Karl.

Let’s Start at the Very Beginning

Our story begins about nine years ago. The Department of Education gathers committees of experts to negotiate details of specific regulations. As the result of a “negotiated rulemaking” panel working on new rules related to the administration of title IV funds, the Department of Education released new rules back in June 2010, which included a proposed Federal Regulation for state authorization for institutions being approved by their home states. BUT, the proposed regulation did not contain the language for state authorization of distance education. The additional language (600.9(c)), regarding distance education, was released in the final regulation in October 2010. The result was many institutions found that they must scramble to be in compliance with various states’ laws and regulations for the out-of-state activities of their institutions. States became more aware of their role in oversight of activities of out-of -state institutions that occur in their states. The story goes on…

History of State Authorization

  • 1791 –States have the authority to regulate educational activities in their states. (The U.S. Constitution; Amendment X)
  • 2009 – A negotiated rulemaking committee considered specific mention of distance education in state authorization regulations but did not include it.
  • June 2010 – The Department released the 2010 Proposed Federal regulations for State Authorization for public comment, minus the language about distance education.
  • October 2010 – Final 2010 Federal regulations for State Authorization released, including language about distance education).
  • 2011 – Several Dear Colleague Letters to clarify and help implementation.
  • 2011 – The WCET/State Authorization Network (SAN) was created.
  • 2011 – The U.S. District Court struck down the distance education portion of the regulation on procedural grounds (reason: the public was not able to comment period since the distance education language was not included in the June 2010 proposed regulation.
  • 2012 – The U.S. Court of Appeals upholds the District Court’s ruling to vacate the distance education portion of the regulation. As a result, there is no enforceable Federal Regulation!
  • 2014 – The State Authorization Reciprocity Agreements (SARA) welcomes its first state, Indiana.
  • 2014 – A negotiated rulemaking committee did not come to consensus for a Federal regulation for State Authorization of Distance Education.
  • 2016 – The Department released proposed Federal regulations for State Authorization of Distance Education in July for comment.
  • 2016 – The Department released the Final 2016 Federal regulations for State Authorization of Postsecondary Distance Education, Foreign Locations in December. Effective date: July 1, 2018.
  • 2017 – The new Administration includes state authorization as a target of deregulation.
  • 2018 – The May announcement of a two-year delay of regulation enforcement and a proposed plan for a negotiated rulemaking committee to amend the Federal regulations.

What about 2019-2020?? – What will we see? Negotiated Rulemaking? Consensus?Lines with arrows on each end showing a never ending loop No Consensus? A new regulation? Do you have a scorecard? Can we break out of the loop?

We are awaiting an announcement from the Department, which may provide more details about the delay and proposed negotiated rulemaking.  However, the May 9, 2018, announcement from the Office of Management and Budget (OMB) made the intention of the Department clear.

So, What Does This Actually Mean?

It means that although institutions are legally obligated to be compliant with the state’s laws and regulations for the out-of-state activities of the institution, the effective date of tying that state regulatory obligation to compliance with a federal regulation to participate in title IV HEA programs, has been delayed.

We cannot stress enough that the institution is still under a regulatory obligation to the states in which the institution enrolls students, offers services, or participates in activities. The compliance obligation may be met by individual state compliance or through participation in the State Authorization Reciprocity Agreements (SARA) for SARA participating institutions, as provided in the SARA Manual.

What Do Institutions Need to Do Now?

  1. Know where your institution participates in out-of-state activities (online courses, experiential learning, marketing, recruiting, out-of-state faculty teaching online, face to face classes, brick and mortar locations, servers, etc.).
  2. Be compliant with the state laws and regulations of the states where the activities occur.
    • SARA participation provides uniform compliance for SARA participating institutions for many out-of-state activities in SARA participating states.
    • Activities outside of SARA or activities by institutions not participating in SARA may require compliance through the individual states.
  3. SARA participating institutions must follow the requirements acknowledged in the initial SARA application, renewal application, and SARA manual. (the alternative is individual state applications, fees, reporting, and renewals to obtain individual state compliance).
  4. For courses and programs leading to professional licensure, notify current and prospective students whether the course or program meets licensure board prerequisites in the state where the student is participating in the course or program.
    • Federal Regulations for Misrepresentation: 34 CFR 668.71 and 34 CR 668.72.
    • SARA notification requirements: SARA Manual Section 5.2.
    • Liability mitigation/avoidance to the institution.
    • Moral obligation to the student by the institution.
  5. Stay tuned to WCET and SAN for the latest information about the next steps in rule making by the Department!

quote: the foundation of regulatory compliance for out-of-state activities of the institution is the state.Being stuck in the Federal regulation loop, about whether title IV funds will or will not be tied to state authorization for out-of-state activities of the institution, is a challenge to explain at our institutions. However, we do have a message to share with our institutional leaderships: the foundation of regulatory compliance for out-of-state activities of the institution is the state. Breaking the federal loop is irrelevant to that message. The institutions cannot choose whether they wish to follow the laws and regulations of the state where the institution participates in activity. Institutions must be compliant in the states where their activities occur. So, the message is simple. Keep focused on state compliance including state licensure boards for the courses and programs offered out of state.

Meanwhile, unlike Bill Murray being caught in a continuous loop of 6 more weeks of winter, we are heading into summer and we will wait for the Department to give us our next dose of déjà vu!

– Cheryl Dowd, WCET

Cheryl Dowd


Cheryl Dowd
Director,State Authorization Network, WCET




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