Author: Russ Poulin

Before we get to some great resources from SHEEO, NCHEMS, Ohio Learning Network, and UMassOnlne, we’ll address a question we have received often.  Since the release of the second ‘Dear Colleague’ letter by the U.S. Department of Education, we have been asked about the meaning of the new deadlines.  Can we wait?

Of course the answer is a simple “yes”……..and “no”…

For the U.S. Department of Education…

• Enforcement of the regulation has been delayed until July 1, 2014.  This allows time for institutions to comply and for the creation of reciprocal agreements.
• Beginning July 1, 2011, institutions are supposed to demonstrate a ‘good faith’ effort to reach compliance in states in which they serve students. The elements of ‘good faith’ need further definition.  The penalty, if any, for not demonstrating ‘good faith’ is unclear.

For the states…

• They expect that you are in compliance with their laws and regulations prior to enrolling the first student in that state.  The actions of the federal government have no impact on the laws and regulations of the individual states.

So…on the one hand you have some time to research the regulations and comply.  On the other hand…you are probably already out of compliance somewhere according to state laws.

In future blogs, look for more information about myths surrounding state authorization, recent changes to state regulations, and an update on reciprocal agreements. Meanwhile, below are several new and developing resources that we think will help you.

New State Regulator Contact List from SHEEO

Paul Lingenfelter, president of the State Higher Education Executive Officers, recently announced the completion of the updated “Preliminary Contact List of State Regulators.”  (NOTE: as they update that link, it might change. If that happens to you go to SHEEO’s state authorization web site.)  The new list improves upon the previous work of our “Starter List” (created by WCET, SREB, ADEC, and the University of Wyoming) by including:

• Complete contact information, including the postal address for each agency.
• Updated information on which institutions each agency authorizes.
• Information on Puerto Rico.
• Preliminary information on the other territories, protectorates, and government entities where students are eligible for U.S. federal financial aid is being researched.

Additional information from SHEEO can be found on their new state authorization web site.

Marianne Boeke (Marianne@nchems.org) and Stacey Zis (stacey@nchems.org) of the National Center for Higher Education Management Systems are performing the work for SHEEO.  They said that they have received several updates since publishing this list.  If you have corrections or updates to the list, please send that information to them.  They will update the list about once a week.

SHEEO Survey under Development

SHEEO is developing a comprehensive survey on state authorization issues.  According to Lingenfelter, the survey will ask “a variety of questions concerning state authorization including when authorization is required for each state and territory (e.g., private; public; not-for-profit; for-profit; degree; non-degree; institution wide; and/or by program).”  It also includes several other questions that will be helpful to institutions seeking authorization.  Megan Raymond and I are on the advisory board that is currently reviewing the questions and providing feedback.

Resources from Ohio and Massachusetts

George Steele, executive director of the Ohio Learning Network, and Ken Udas, chief executive officer of UMassOnline, recently shared great state authorization resources that their organizations have created:

• From Ohio, SAN-O:  https://sites.google.com/site/stateauthorizationnetworkohio/
• From UMassOnline:  https://confluence.umassonline.net/display/OBS/Higher+Education+Act+-+State+Authorization

This is great work by both organizations.  I think you will find the information that they’ve collected to be very helpful.

Russell Poulin
Deputy Director, Research & Analysis
rpoulin@wiche.edu

Megan Raymond
Events Coordinator
mraymond@wiche.edu

State Approval page:   http://wcet.wiche.edu/advance/state-approval
Twitter:  @wcet_info      State Approval Hashtag: #stateapp

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The first two organizations will be working on a new list of state regulators and regulations. The last organization is comprised of state regulators, who met in Denver this week. It was interesting to get their take on the ‘state authorization’ regulations.  There is promising work underway to ease the application process in the future and a we received a verbal clarification on ‘good faith’ efforts

A New Comprehensive and Updated List of State Regulations

The State Higher Education Executive Officers (SHEEO, pronounced “she-oh”) recently announced that they plan to make a director of state regulators and compendium of state regulations. The ‘Starter List‘ partners (WCET, the Southern Regional Education Board, American Distance Education Consortium and the University of Wyoming) originally created that document to help institutions begin the journey down the path to authorization.  We welcome SHEEO’s announcement and have already shared all of our information with them, so that they could get a quick start on this work.

SHEEO has contracted with the National Center for Higher Education Management Systems (NCHEMS, pronounced “en-chems”) to conduct this work and has created an advisory board to help guide the process.  They also created a web page where updates and new resources will appear.

Lessons from the NASASPS – State Regulators’ Meeting

The National Association of State Administrators and Supervisors of Private Schools (NASASPS, pronounced “nass-asps”) held their annual conference in Denver this week. The mission of NASASPS is to improve and promote effective state regulation of private postsecondary education.

Russ could attend only one day.  However, Marianne Boeke and Stacey Zis of NCHEMS attended all three days.  Marianne and Stacey are the chief researchers from NCHEMS working on the new state regulations list.  We agreed to each submit lessons that we learned at the conference to this posting.

The U.S. Department of Education on ‘Good Faith’.  Fred Sellers from the US Department of Education (star of the WCET webcast on this issue) spoke about the federal regulations concerning state authorization, the dear colleague letters, and the concept of “good faith” effort.  On ‘good faith’ he echoed a statement made at the Presidents’ Forum meeting last month by Assistant Secretary Eduardo Ochoa.  Both indicated that institutions are expected to do what’s next in moving the process forward.  Therefore, if you send a letter to a state and you are informed of the next steps for your institution (further clarification, filling out an application, paying fees, etc.), then you are expected to take those next steps.  You cannot wait until the deadline.  Document your steps.

Creating a Common State Application.  Sharyl Thompson, Capella University, and George Roedler, Minnesota’s state regulator, presented on efforts to create a common (or as common as possible) application among states.  Six states (AR, KS, MN, MO, OH, WI) are piloting this effort.  They started by examining similarities in the information required for renewing approvals.  They also demonstrated the very early steps of a web-based tool that an institution could use to submit its information.  While this was encouraging news, several of the questions centered around states wondering how they could add addenda for information particular to their own states or how to articulate with local databases.  Meanwhile, the pilot states were looking for more states to join them and for a funding a model to take the next steps in this work.

Update on Creating Model State Compacts.  Earlier this year Paul Shiffman, Excelsior College, wrote about the project that he heads that is creating a model state compact. This work is intended to make the state authorization process more efficient for states participating states.  The Council of State Governments, which partners in the project, provided background on elements of a successful state compact.  Alan Contreras recently retired as state regulator in Oregon and is working on the project.  He was optimistic that several states would be interested in joining this voluntary arrangement to set common standards without giving up regulatory oversight.  He felt the agreement would create greater efficiencies, save on costs, and work both from an enforcement perspective and in easing the burden on institutions. Funded by a two-year grant from Lumina Foundation for Education, the project seems to be accelerating its timeline as best it can. Once the model compact is created, participating states will need to be solicited and approvals (sometimes meaning legislation) will need to be obtained.

Another Way to Think about the Issues around State Authorization.  We tend to think that states cluster regionally.  At the NASASPS conference, there was discussion of the great need for distance education in some states to serve rural students.  States with large rural areas have different needs and often have different regulations regarding state authorization.  These states don’t want to make operating in their state too difficult because this would impact the rural population in a negative way.  It would be interesting to look at states’ regulations through a rural, suburban, and urban lens and see if there is a pattern in this regard.

What the Foundations are Saying about Quality.  Both Lumina Foundation for Education and the Bill & Melinda Gates Foundation spoke about what efforts are being made for quality assurance.  Lumina is looking at quality with what they are calling the “new triad”.  This triad is Completion, Employment, and Learning.  Meanwhile, Gates is focusing on Completion, Cost-per-Degree, and Return-on-Investment per Student.

In Conclusion

We had a great time meeting our state regulator friends.  It helped to hear their concerns.  Upon reflection, the interesting part of Fred Sellers’ talk was his gentle reminder that the federal regulations are there to protect students and taxpayers.  And as important as taxpayers are, we (as members of the higher education community) need to remember that students are, and should be, our primary focus.  Since state authorization is part of our future, we need to shift our focus on how we can use this opportunity to best help students – in our own states and across state lines.

Russ Poulin, Marianne Boeke, & Stacey Zis

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   <== UPDATED!
Twitter:  @wcet_info      State Approval Hashtag: #stateapp

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Photo credit:  Withheld to protect the guilty.

WCET: Many people have asked for advice on the steps to take in researching state regulations and applying to states for approval.  When WCET and our partners were creating the ‘Starter List’ of state regulatory agencies, Sharyl Thompson of Capella University was very generous in helping us. We asked her to share what she and her team have learned in their years of experience in working with states.

The new federal regulations for higher education have caused the subject of state authorization to explode across the country. Many institutions were unaware of state regulations that have been in place for years – unaware until recently. The federal regulations mandate that an institution must have authorization to operate in any state whose regulations say they must do so. Although there is still a lot of confusion among the many stakeholders, the fact remains that states have regulations for institutions to be aware of and comply with.

Knowing what to do and how to do it in each state can be overwhelming for any institution. However, it is possible to be successful and here are some tips for doing so.

1. Select the right person to lead

It is critically important that the individuals overseeing and/or preparing the state applications are very detail oriented, multi-taskers, and have good project management skills. Some states require that forms be submitted in a particular font style or size; others require that tabs in the 3-ring notebook be labeled in a particular manner. The devil is in the details – in all respects of state regulatory issues.

2.  Read the state regulations

Once you have your person in place, the first step any institution should take is to read the state regulations (and save them electronically for easier reference in the future). There is no ONE resource to go to for the all the information needed to be successful. Various organizations (like WCET and its partners) have provided resources and it is wise to look at several of them.

Once you find the regulations for a state, start with the introduction because sometimes that section will describe the kinds of institutions that are subject to approval. Next, go to the definitions. Individual states will have different definitions of a single term, like “operate”, “postsecondary institution”, “proprietary institution”, “physical presence”, “agent”, and “educational services” – just to name a few. Don’t assume you know the definition of a word.  For example, some states define out-of-state institutions as “private” institutions for the purpose of the regulation; even though it might be a publicly-funded college.  Keep in mind that each state is uniquely different.

The focus of the discussions regarding state authorization has been on distance education and in which states an institution has students.  For many states, there are multiple “triggers” (activities that you might be conducting in that states) that determine your need to seek approval to operate. Examples of these “triggers” include: local advertising, including direct marketing, recruiting (including trade shows), where faculty reside, practica and internships, and testing sites. That is why it is so important to read the regulations and know what kinds of activities trigger the need for an institution to be authorized by a state. Each state is different.

3. Develop relationships across your institution

A successful regulatory department will be aware of and in contact with numerous other functions within the institution, including the library, finance department (for audited financial statements), curriculum development, faculty hiring and qualifications, assessment, admissions, policies, catalog, recruiting and advertising (how and where), and enrollment agreement, just to name a few. Initially, you will need to determine if any of the activities of your institutional units are setting off a “trigger” in a state.  If you find you will need to apply in a state, individuals from all of these areas may need to provide information to include in the applications.

4  Develop a relationship with regulators based on knowledge of that state’s requirements

A successful regulatory function at any institution will first be based on the relationship built with the state regulators. Feel free to contact them – but do so after reading the regulations. Contact the regulators from a knowledge base of the regulations and triggers in that state.  Prepare specific questions. Approach the regulators with an attitude of wanting to be in compliance, not with an attitude of trying to get out of having to comply. State regulators will work with you, as everyone’s goal is to ensure that students and potential students are protected from fraud and that they receive a quality education to help prepare them for a successful future. Note: some states have more than one regulatory agency.  Also, if your institution offers programs leading to a professional license, you may be required to contact the state licensing boards in advance of submitting an application to a state regulatory office.

5.  Determine where you will apply  

The relationships that were created earlier with institutional leadership will be key.  Based upon the number of students served, the costs (and effort) to comply, and other factors, your leadership will need to make the final decision whether to seek authorization or cease the activity(ies) that trigger the need for approval to operate in a particular state.

The cost of state authorization can be high, depending on the state and depending on the institution. Often there is a fee for the initial application. There may be additional fees for licensing recruiters (“agents”) going into a state. A surety bond or student tuition recovery funds may be required. The fees are calculated in various ways, again, depending on the state. There are also fees for renewals, new program offerings, or other activities that require a notification be sent to a state.

6.  Apply!

The applications need to be well organized, provide direct responses to the questions (not marketing language), written with one “voice”, and include all of the required materials. It is important to follow the directions given by the states. Doing so will build your credibility, but also cut down on the length of time it takes to receive approval.

Be mindful of deadlines for state applications. Some state regulating boards meet quarterly, and applications for approvals to operate (or renewals) must be submitted by a certain deadline in order to be on the agenda for the next meeting. Missing deadlines will only delay receiving the approval to operate.

7. Determine post-approval steps and timelines

Once your institution has an approval to operate, the activity is not over. In many states there are annual renewals and/or annual reports. If your institution changes or adds a location, some states need to be notified. If your institution adds a new program offering, or retires an existing one, the states need to be notified. Tracking all of this activity is very important. It can be challenging to keep track of which states were notified of which activities when, and then when the state responded back to those notifications. Starting a tracking system early on will save an institution many hours of work in the future.

Conclusion

This is an over-simplification of a complex process, but I tried to give you some advice from my experience.  In conclusion, here are some things I have learned over the years of working in the state regulatory field.

1. The work is interesting, complicated, ever-changing, and the devil is in the details.
2. The work is sometimes frustrating and/or stressful, but also rewarding.
3. State regulations don’t always make sense.
4. Many types of schools fall under same set of state regulations. Career schools (like truck driving or massage therapy) may fall under the same state regulations as a degree-granting institution.

Be persistent.  Watch the details.  Good luck!

Sharyl Thompson
Senior Regulatory Specialist
Capella University
sharyl.thompson@capella.edu

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Around 5:00 Eastern Time today (April 20), the U.S. Department of Education (USDOE) released a new ‘Dear Colleague’ letter on the ‘state authorization’ regulation.  After a quick review, below are immediate thoughts on the new language.

The USDOE is to be commended for demonstrating that it heard the distress of the distance education community.  The letter seems to go about as far as it could in trying to assist institutions on this issue.  Even so, it leaves the institutions with much work to do.

Extending the Enforcement Date to July 1, 2014

This is very positive as institutions will receive some relief from the pressure of trying to comply in such a short timeframe.  That’s the good news.  However, as noted in my blog regarding the previous ‘Dear Colleague’ letter, this should not be confused with a delay.  A true delay would mean that no party (the institution, the USDOE, the states) would need to do any more about complying now.  Institutions are still expected to show a ‘good faith’ effort.  It appears that the USDOE will still be tracking that you are making progress toward complying.

Evidence of ‘good faith’

It is helpful I am glad that they expanded upon their definition of ‘good faith.’  The wording of this section might still cause some confusion.  Prior to the release of this letter, institutions have told us that all that is required is to write a letter to the state and that demonstrates “good faith.”  From how this is written, one could make that interpretation.  However, my guess is that the USDOE will probably expect the institution to act upon any responses it receives from a state and continue to move forward in the application process.  Note the last paragraph of the “Clarification of Enforcement” section.  It implies a higher standard.  If you know what to do, you are expected to do it. We’ll seek further clarification on this issue.

Developing a Comprehensive Directory

Hooray!  Kudos to the USDOE on reversing its previous position and will work with others to create a list of state-by-state requirements.  It was hard to see how they could ever enforce this regulation without such a directory.  The State Higher Education Executive Officers announced last week that it will begin working on such a list.  I imagine that SHEEO and USDOE will work together to help us all.

Supporting State Coordination

Their support of work that will lead to reciprocal agreements and other efforts to ease compliance is most welcomed.  It would have been nice to get further clarification on this issue, but we note that the USDOE has always been supportive of such efforts.  WCET would love to be part of the conversation.

Conclusion (for Now)

There is more to be learned about the interpretations of this letter, but it appears to be a positive step forward. The Department does not want to reopen the regulation process, so it is doing all it can to ease-up on the enforcement side.

Some of you have already sent us some troubling interpretations and we’ll follow-up on any scary implications, whether intended or unintended.

Institutions should not lose site of the expectation by states that you follow their regulations.  There is no postponement or delay there and states have an increased awareness that there are institutions operating in their jurisdictions without the proper authority.  Remember, what states do is outside of the control of the USDOE.

It’s never simple, is it?

Russ

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

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Photo Credit:  Morgue File – http://www.morguefile.com/archive/display/6975

“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

Rumors

There are rumors, hints, innuendos, and whispers floating around about the federal ‘state authorization’ regulation…

A leader of a national organization (who had been in contact with the Department of Education on this issue) said that he thought there would be some changes in the regulation coming in the next month.

At last week’s Presidents’ Forum meeting, Eduardo Ochoa, Assistant Secretary for Postsecondary Education, and David Bergeron, Deputy Assistant Secretary for Postsecondary Education, seemed fairly intractable on this issue.  Since then, I’ve heard that there have been feelers put out for more information.

A few people have forwarded emails to me with rumors that something is in the works. Everything is touted from it will just go away to there could be a substantial delay in enforcement.  One person even seemed to indicate that we don’t need to worry about this regulation any more. Woohoo!

Note that in the grand tradition of “unnamed sources,” I did not attribute these rumors to anyone.  I’m not saying who they are because I want to keep their trust. I am hearing enough of these stories from trusted people that I’m thinking that there is something to them.

My Take on It

From putting the pieces together, I think that there may be some good news coming.  I think the Department of Education will probably review this regulation.  Rescinding seems unlikely; a delay is possible.  In the past, we’ve recommend that more time is needed.  The bad news is that there may be a government shutdown today, which would make it hard for them to do this work.

Does It Matter?

I was in a call a few weeks ago with a state regulator who made the observation that it does not matter whether the federal regulations are rescinded or not.  The state laws still stand.  You are expected to comply.  And they are now aware that there are hundreds or thousands of institutions that are out of compliance.

I also fear that some institutions would take a delay and not worry about the issue until the deadline is upon them once again.  It takes time to seek approval. It takes time to create the types of reciprocal agreements that will make life easier for all of us. If given the gift of time, let’s not allow it to fritter away.

Russ

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

Join WCET!  Support our work on this issue.

On Monday, the Presidents’ Forum of Excelsior College held a meeting in Washington, DC addressing the “Federalization of Higher Education.”  Other topics arose, but the main focus of the discussion was on the ‘state authorization’ regulation.

While I was on the closing panel, by far the most interesting session was one that included Eduardo Ochoa, Assistant Secretary for Postsecondary Education, and David Bergeron, Deputy Assistant Secretary for Postsecondary Education, from the U.S. Department of Education.  I applaud both of these leaders for their willingness to state their case and to take questions from a “not-so-happy” audience. While I did not get exact quotes all the time, here are my best attempts at recreating what they said…in their own words…or as close as I could get:

Our Motivations

1.       Completion Goals. Ochoa:  We are totally focused on supporting the President’s 2020 goals for increasing college completion.

2.       Why Does this Regulation Exist? Bergeron:  During the rule-making process, we received public comments, so we needed to address it.  Institutions need to be in compliance with local laws.  There is an Executive Order saying that we can’t preempt state laws.

3.       On the State of Institutional Compliance. Bergeron:  Our assumption that institutions were already in compliance was “ummmm…probably off.”  <This brought a chuckle from the crowd.>

The Problems with the Regulation are Overblown

4.       F.U.D. Ochoa:  There is much F.U.D. (Fear, Uncertainty, and Doubt) out there.  I am optimistic this can be cleared up. Many of the perverse consequences are hypothetical and assume a narrow a rigid view in interpreting the regulations.  “Certainly, we will not do something that makes no sense!”

5.       Terminating Financial Aid Programs. Bergeron:  We terminate, on average, two programs per year.  Accreditors terminate many more. We work with schools to bring them into compliance.  “That’s just what we do.”

Creating a State-by-State List

6.       How Will Auditors Know if an Institution is in Compliance in a State? If there is no list, how would those reviewing financial aid programs know if the institution is in compliance or not?  Response (I did not record who said this): In a particular matter, the reviewers would check with the state to see if the information was correct.

7.       Department Not Creating a Directory. A question was raised about the Department not making a directory.  This implies that each institution needs to compile and create its own directory. Bergeron:  The Department will not make a directory. Initially, they will rely on the publicly available directories produced by WICHE << hey that’s us and our partners >> and others.

On State Regulations

8.       Differences in State Regulations. Cumbersome state regulations are not an argument against the federal rule.  This points to a need for better state rules.  They met with the State Higher Education Executive Officers Executive Officers (SHEEO) on Saturday and it was recognized that some rules are out-of-date.

9.       State Laws are Outdated and States are Not Ready. A question was raised about archaic state laws and the lack of capacity for states to respond to institutional requests about those laws. Ochoa:  In the meeting with SHEEO, there was realization that the states will need to update their rules.  Perhaps this regulation will be an incentive for those states to change their laws.  If a state is revising their regulations and that causes a delay, an institution needs to document that fact in writing from the state.

10.   Why is Documenting State Regulations an Institution’s Burden?  A question was raised about why each institution needs to document that a state does not have regulations or is updating its regulations.  Ochoa:  We have been working with states for a long time to update their regulations.  This will provide an incentive for them to do so.  President Ebersole of Excelsior College responded that the incentive assumes that states want to update their rules and will not seek to protect their own institutions.

Clarifications to the Regulation

11.   Applicability of this Regulation to Non-credit Courses/Programs. This regulation covers only Title IV funds.  Whether an institution’s courses and programs complies with state laws is another issue.

12.   Transient Students. A hypothetical question was asked about a student who goes to an out-of-state home for the summer, but takes all the other courses in person at the institution.  They replied that the Department has a list of questions it does not like being asked and this question might be added to the list.  <<Laughter>>  Bergeron: The Department would expect the institution to be in compliance with state laws.  However, they would not be looking for such instances unless there was a student complaint.

13.   ‘Good-Faith’ Effort and ‘In Process.” A question was asked about further definition of the term ‘in process’ that was used as part of the ‘Dear Colleague’ explanation of a ‘Good-Faith’ effort to comply.  Ochoa: Whatever steps that you have taken to move the process forward, document those steps.

Important Questions on Costs, Innovation, and the Timeline

14.   Stifling Innovation. An impassioned plea was made to update this regulation as it flew in the face of innovation and would run contrary to the President’s completion goals.  Ochoa:  You can’t know the impact of this regulation because it has not come into effect yet.  Most of the perceived consequences are hypothetical.  During the rule-making process the Department received comments that it could not ignore. Our options were to either defer to existing state laws or to create a federal pre-emption of state laws.

15.   Cost of Compliance. John Ebersole, president of Excelsior College, objected to the notion that the consequences are not hypothetical.  His institution will pay in excess of $100,000 to comply.  Ochoa strongly disagreed with the estimate of the costs of complying.  He then made the observation that this was a “cost of doing business that preceded the federal regulation.”

16.   Extended Moratorium. A question was asked if there is anything that prevents a moratorium in enforcement being extended beyond a year.  Bergeron:  An extension would mean temporarily going against state law.  I don’t know how to do this. If a state says that it is not reviewing applications, document it. We want to bring institutions into compliance, we will work with institutions to comply.

In my part of the meeting, I asked for more impact statements.  I extend that invitation to you.  We need more stories about the impact that implementing this regulation will have on students. If you’re institution is deciding not to serve students in some states, is raising the costs to students, or taking other actions that will not benefit students, let me know at rpoulin@wiche.edu.  Please put the phrase “Impact Statement” in your subject line.

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
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