Author: Russ Poulin

The long-awaiting ‘Dear Colleague’ letter is now here.  The letter is meant to answer outstanding questions on this regulation.  Sometimes it succeeds and sometimes it fails.

Eduardo Ochoa, Assistant Secretary for Postsecondary Education, reminds us that:  “this guidance is provided to assist institutions with understanding the changes to the regulations in these areas, and does not make any changes to the regulations.  Affected parties are responsible for taking the steps necessary to comply by the effective dates established by the final regulations.”

I advise that you read the complete language for all ‘state authorization’ responses.  In this posting, I briefly describe what is said in each distance education question and response.   I will also provide my own analysis and additional context based upon my conversations with others about each issue.

Question 15: State-by-State List of Regulations

In brief: The Department repeats its previous stance that it will not publish a list of State authorizing methods or agencies for distance education.

Analysis: This is not surprising and might be better handled by an entity that has more flexibility in what it can publish.  The State Higher Education Executive Officers has said that they “intend” to work on such a list, but possible funders have wanted to wait until this ‘Dear Colleague’ letter was released before proceeding.  WCET staff have meetings with SHEEO and with others who have created lists (Dow Lohnes, Eduventures, Presidents Forum) next week to discuss next steps.  Somebody has got to do this.  Meanwhile, WCET released an addendum with new information from Arkansas, Mississippi, Oklahoma, and significant updates from Oregon.

Q 16: Definition of a ‘Good-Faith’ Effort to Comply by July 1, 2011

In brief: The response expands upon the wording about ‘good –faith effort’ that was released in this blog in January.  For the 2011-2012 award year alone, if it does not already have approval, the institution must apply for approval in each state it is required to do so.  It must also have documentation of the submitted application

Analysis: The expansion upon the earlier wording released in my blog is more procedural than substantive.  Even so, it is welcomed.  It still appears that to me that all institutions are required to either have or to have applied for approval (where required) by July 1.  While, I’m glad to see this, read my worry near the bottom of this post.

Q 17: Military Personnel

In brief: On whether an institution needs approval from states in which military personnel are stationed, “this question is a matter of state law…”  Institutions will need to find out what each state requires regarding approval in serving military personnel

Analysis: The question about how do military personnel count was asked at our December 7 webcast with Fred Sellers from the Department.  Since then I’ve told people that my expectation (and fear) was that they had no choice but to rely on the laws of each state.  That’s what they are doing.  I’d hoped for an exception, but wondered how it could be justified.  For those institutions serving military personnel, life just became more difficult.  Given the transient nature of those in our armed forces, institutions with a military focus will need to apply (if required) in every state with a base, post, or other installation.

Q18:  Notifying Students of Complaint Processes

In brief: Yes, institutions must notify their distance students of complaint processes for both: a) the institution’s accrediting agency and b) any state process or processes (yes, there could be more than one) for filing third-party complaints about your institution.

Analysis: I thought that Fred Sellers was very clear about this in our December 7 webcast, so it was not a surprise to me.  I know that others chose to belief that it was not a requirement or questioned it.  The impact brings us back to the state-by-state list.  We tried to find any complaint processes that we could and reported those.  It becomes important to have an updated list of complaint processes.

Q 19: The Penalties for Non-compliance

In brief: If an institution is found to be non-compliant in a state, the Department expects that Title IV funds will be returned for students in states where the institution does not have authorization.  The Department reserves the right to impose harsher penalties.

Analysis: Again, Fred Sellers was clear about this in our December 7 webcast.  The proposed penalties seem to be in line with actions the Department has taken on instances of non-compliance for other Title IV infractions.

Q 20: Institution Be in Compliance When It Enrolls the Student and Re-evaluated if Student Moves

In brief: A student is eligible for Title IV funds only if the any required State approval (pertaining to that student) has already been obtained at enrollment.  If a student moves, the student’s aid eligibility must be re-evaluated.

Analysis: This has been an open question since the release of the regulations and it is helpful to finally have the answer.  Along with the answer about military personnel, this response leaves the institutions with some very, very tough decisions in the short term:

• In the states where we need to apply, in which states can we afford (both in fees and staff time) to apply?
• For those states where we decide not to apply:

o   Will we decline to further enroll students?  Is that legal?  What happens to students in mid-program?

o   Can we enroll students without aid?

o   Are we willing to continue to serve students in that state and hope that a court mandate or Congressional pressure saves us?

My suggestion…you better get busy applying in states where you have the most risk.  Get busy contacting your Congressional delegation for relief (remember that few in Congress or the Department think this is a big deal).  Figure out what you can and will do in those states where you do not apply.

Q 21:  No Minimum Number of Students

In brief: The minimum number of students in a state to trigger compliance is left to the laws and regulations of each state.

Analysis: I know others hoped for another answer, but there’s no real surprise here.  The federal regulation is all about following and enforcing the approval rules and regulations of each state. In our review of state laws, the number of students served was seldom or never a consideration in whether an institution needed to comply or not.

Just as the Department defined how it would enforce its regulations in the ‘good-faith effort’ definition, there’s hope that we can work with state regulators on this issue.  I know it may be a pipe dream, but I can envision a common understanding among state regulators that (under certain conditions to be created later) an institution would not be required to seek approval if it is serving only a small number of students in each state.  Unfortunately, it will take more than a year to get such agreements in place.

Q22:  No State Documentation is Required from States Where the Institution Need Not Apply

In brief: If a State has no requirements or does not require an institution to apply, the institution does not need a letter from the State detailing that fact.  However, the institution must demonstrate that it did not need to seek approval.

Analysis: On the one hand this makes perfect sense.  Why are we bothering states with few or no regulations that they are not regulating an institution?  I have already heard that states with no regulations are being beset with requests for letters saying there’s no need to apply.  Some of those states are now considering regulations or fees to write these letters.  We are being our own worst enemies in this case.  On the other hand, without a single, trusted list, how will institutions be able to provide the requested proof?

Q23:  Aid Eligibility is Not Lost if a State Does Not Act on an Application

In brief: An institution will not lose eligibility if a state has not acted on the institution’s application by July 1, 2011.

Analysis: This response goes hand-in-hand with Question 16 on ‘good-faith efforts.’  While the language in the October 29 release of regulations said that this regulation would put no burden on state regulatory agencies, it is heartening to see that there is recognition that these agencies are being overwhelmed.   As I stated earlier this year in my “Eight Things You Can Be Doing Now” blog, you institution should document all correspondence with each state.  This could someday be very important in demonstrating your attempts at compliance.

Highlights from Other Questions and Responses

The bulk of the language in the ‘state authorization’ regulations is dedicated to institutions seeking approval in their own state. The distance education regulation is just one paragraph.  Questions 1-14 in the ‘state authorization’ section of this ‘Dear Colleague’ letter address the in-state issues, but some of those responses could have a big impact on distance education, as well:

• Question 5 says that institutions must be in compliance with all State laws, including any requisite licenses.  For example, a nursing program might need additional licensure by the State’s board of nursing.  If this is true in-state, why would this be any different for distance education programs?
• Question 9 seems to indicate that tribal colleges are no longer exempt from regulation once they educate students outside their tribal lands.
• Question 13 adds more detail to the requirement for a third-party (not internal to the institution) complaint process. It also says that it would not be acceptable for a board or central office to handle complaints for other institutions in the State.  That might require some changes in processes in some states.
• Question 14 addresses changes in state laws.  The Department understands that it will take time to handle changes in state laws and will observe institutional responses to those changes on a case-by-case basis.

Hey, What About?

Some questions that I would have been addressed:

• What about Reciprocal Agreements? On page 66867 of the October 29 regulation is the statement: “We continue to believe that we do not need to regulate or specifically authorize reciprocal agreements. If both States provide authorizations for institutions that comply with § 600.9 and they have an agreement to recognize each other’s authorization, we would consider the institution legally authorized in both States as long as the institution provided appropriate documentation of authorization from the home State and of the reciprocal agreement.”  I think I understand, but it leads to all sorts of questions.  I know that Bruce Chaloux asked about the Southern Regional Education Board’s Electronic Campus.  Does it comply?  What about interstate financial aid consortium agreements?  Do they now need the state approval agencies to review and approve?  A better understanding of reciprocal agreements could have had a big impact on how institutions respond to these regulations.  This was a major omission.
• What about Programs that Don’t Offer Federal Aid? Given the wording, I firmly believe that state laws need to be followed for correspondence and other non-credit offerings.  But, it would be nice for someone from the Department to say this.
• What about Blended Programs or Programs that Require a Practicum? I have had many people ask me about this.  Again, I firmly believe that if you are operating in a state that you are subject to the laws of that state, but it would be nice for the Department to clarify.

My Worry about the Spin around ‘Good-Faith Effort’

Here’s my worry…I have heard some (not all) Department spokespeople refer to this as a ‘delay’ in the regulation.  Indeed, it is a delay in the enforcement and lessens the burden on the Department over the coming award year.

For the institutions, IT IS NOT A DELAY.

Institutions are still left with a monumental burden of doing the following by July 1.

• Identifying where their students are located (that should be relatively easy),
• Deciphering the regulations for each state in which they serve students (more difficult than one might think),
• Determining if they need to apply for each state (again not easy),
• Applying in each state in which they are required.  John Ebersole, president of Excelsior College testified as to the difficulty of this step to House Education and Workforce Committee last week.  He said that it took 400 staff hours to complete the application process for just two programs in one state.  That does not sound easy.  See our collection of impact statements regarding this regulation.  Institutions are struggling.

All of this has to be done by July 1 and at great cost.  I know that institutions were “always required to have determined whether State Approval was necessary and to have sought approval.”  But, we have had a triumvirate of neglect on this issue for DECADES.  For the most part, public institutions have not applied, state regulators have not looked for them, and the federal government has not checked for compliance.  Why does this all need to be rectified by July 1?

Bottom Line (Lines?)….

• Yes, institutions should have been applying all along, but they did not and NO ONE CARED.  I include the author of this post about “hysteria over state authorization.”
• It is confusing and expensive to apply.
• Students will ultimately pay.  Increased costs will be passed along.  Institutions will withdraw from some states.
• Since it took DECADES for us to get to this point, it is unrealistic that is will be resolved in eight months.
• Reciprocal agreements could help, but they will take more than a year to develop.

Let’s follow state and federal laws, but give us the time to do it right.

A TRUE delay of two years is needed.

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.
Join our State Authorization Network.

House to Investigate ‘State Authorization’

Tomorrow, the U.S. House Subcommittee on Higher Education and Workforce Training will hold a hearing titled “Education Regulations: Federal Overreach into Academic Affairs.”  We’ve heard that ‘state authorization’ is one of the issues that they will be addressing.

John Ebersole, president of Excelsior College, and Ralph Wolff, president of the Western Association of Schools and Colleges, are among the witnesses.  Both of them are well-versed on this issue.  We’ve sent both of them and the chief staffer for the Subcommittee additional information on this issue. Inside Higher Ed will probably run an opinion piece by John Ebersole on Friday morning.  While they will be great representatives on this issue, I wish they would have included a public institution on the witness list.

Call to Action!

Check to see if you have a representative on the Subcommittee or on the larger Committee on Education and the Workforce.   If you do, I’d suggest giving them a call or sending them a note prior to the hearing, if possible.  If you can’t contact them prior to the hearing, then do so soon, while the issue is fresh in their minds.

Impact Stories

Last month I asked for short stories about the possible negative impact that implementing the state authorization regulations on July 1, 2011 will have on students.  Thank you to those of you who responded.  We compiled and categorized the responses.  To summarize, if implemented on July 1, likely impacts include:

• Decreased access to programs – as institutions will choose not to serve students in states with high fees or complex processes.
• Increased costs will be passed along to students – due to increased staffing needed to meet requirements and increased fees. The Minnesota State Colleges and Universities estimate that it will cost $5.5 million in fees alone to meet the requirement in the first year.
• Decreased access to faculty – rules in some states require approval if you have an adjunct faculty person in the state.  If the institution decides not to seek authorization in one of those states, it will no longer be able to employ faculty from those states.
• Adverse impact for students in select workforce areas – Some colleges offer programs that are targeted to specific industries (Huntington Junior College in Captioning for the Deaf & Bismarck State College in Power Plant Technology).

Do you have more stories?  More impacts?

Final ‘Starter List’ Released

On March 8^th we posted this document.  We’ve already heard from a few states giving us EVEN MORE updates.  Ugh!  You can see why we’re getting out of this business.  We’ll post an addendum on the ‘starter list’ page periodically, but we will not be updating the document.  Thank you again to the Southern Regional Education Board, American Distance Education Consortium, and the University of Wyoming for partnering with WCET in creating the list.

State Authorization Network Moving Forward

I invite you to check out our plan for a State Authorization Network.  We have seven systems or institutions committed to participate.  We opened membership to institutions, as they were keen to join us.

Online Education Being Lumped In with ‘For-Profits’

As I was writing the blog this morning, I was watching the tweets coming from the Senate Hearing titled:  “Bridgepoint Education, Inc.: A Case study in For-Profit Education and Oversight.”  At times it appears that “online education” is being seen as synonymous (in a negative way) with the “bad actors” in for-profit education.  An unfortunate trend that we’ve previously seen in these hearings.

Good luck!

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.

As of today, there are 119 days remaining until July 1, when the ‘state authorization’ regulation takes effect.  With less than four months to go, we are forced to split our attention in two directions.

The first direction is “advocacy.”  We are working with many higher education organizations to advocate either a rescission of the regulation or a two-year delay in its implementation.

The second direction is “compliance.”  If we are not successful in our efforts to alter the course of this regulation, institutions will need to be approved or to have applied to all the states that require them to do so by July 1.  We must keep busy on this front.

It’s difficult to give clear direction to institutions asking about what they should be doing.  Some are tempted to wait because they are sure that a change will come.  I’m hopeful.  Although, everyone’s tolerance for risk is different.  Regardless of where you are, here are important updates on both directions.

Compliance

• State Authorization Network. Expecting each institution to research, interpret, and act upon the approval and licensure regulations of each state is a highly inefficient use of staff time and misinterpretations could put an institution at risk. Some systems and consortia are centralized ‘Coordinators’ to research the federal and state regulations and assist the institutions. WCET’s State Authorization Network will assist the ‘Coordinators’ by providing training on the regulations, enabling access to experts on the issue, and networking among participants so that they can share what they uncover.  Learn about the State Authorization Network and how your system or consortium can join.
• State Approval ‘Starter’ List – Watch for the Next Final Version. On February 28^th, the “final” version of the document “State Approval Regulations for Distance Education: A Starter List” was released.  Forty states responded to our request to review and correct the draft version of this document.  Within 24 hours of releasing it, seven states contacted us with further revisions and we are waiting on a few more.  On Friday, we will release the NEXT final version of the list.  We don’t plan on doing this forever, which leads us to the next item.  Thank you again to the Southern Regional Education Board, American Distance Education Consortium, and the University of Wyoming for partnering with WCET in creating the list.
• SHEEO ‘Intends’ to Publish the List. The State Higher Education Executive Officers are researching what it will take to create an expanded state-by-state list of regulations that will be continually updated.  While SHEEO ‘intends’ to assume this role, the decision has not been finalized.  We will share all information that we have collected with SHEEO to help them get started in their work.
• Dear Colleague. No new word on when the U.S. Department of Education’s (USDOE) ‘Dear Colleague’ letter will be released.

Advocacy

• ACE Request ‘State Approval’ Regulation Be Rescinded. The American Council on Education wrote a letter to U.S. Secretary of Education Duncan citing problems with the ‘state authorization’ regulations.  The letter called for the USDOE to rescind the regulation.  WCET was one of 21 higher education associations and 38 accrediting agencies to co-sign the letter.  The letter states: “We believe the best course of action would be to rescind the new state authorization regulation in its entirety. This is a conclusion we have not reached lightly and only after determining that our concerns cannot be addressed through modification. As finalized, the regulation…threatens the ability of both public and private institutions to serve students through effective distance education programs.”
• APSCU Lawsuit. The Association of Private Sector Colleges and Universities (APSCU) filed a lawsuit against the USDOE (pdf file is slow to load) regarding ‘state authorization’ and two other regulations released last October.  Someone asked me what impact the lawsuit might have on implantation of the regulation.  I did not know, so I called them.  Since filing the suit, APSCU asked for a summary judgment on February 25.  A response from USDOE is due on March 18, APSCU can again respond by April 1, and the final response from USDOE is due on April 15.  Some people were hoping for a quick decision on this lawsuit. Given this timeline, no decision will come before April 15.  APSCU invited me to determine if WCET and other organizations would be willing to file briefs in support of their motion.  If anyone is interested in this, let me know.
• Congressional Letters. I’m still working with several organizations to create sample wording that institutions can use in contacting their Congressional delegations.  I’m hoping that we can get these letters to you soon.

Good luck!

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.

I learned an important fact this week…institutions offering distance education in other states will need to meet the regulations (if any) of those states by July 1, 2011.  There are no extensions.  But, keep reading for some good news.

In my webpage, “2010 Federal Regulations on State Approval of Out-of-State Providers,” and other writings, I may have misled people on these two issues.  Conversations over the past week have helped to clarify this issue and I think we made an important step forward.

No Extensions for Distance Education…

The federal regulations on “state authorization” released in late October included language about “extensions.”  See page 66863 (column 2) of the Federal Register for more details. Like many others, I saw these “extensions” as an opportunity for distance education institutions to act on these approvals later in states that were not ready to meet the regulations. Not so.

Fred Sellers, U.S. Department of Education (USDOE), informed me of my error in thinking.  The extensions are only for state agencies regulating institutions located in their own state.  The extensions are not for institutions offering education at a distance from other states.  He assured me that distance education institutions are expected to meet state regulations (if any) in all states in which they serve students by July 1, 2011.  No extensions.

In talking with people from several colleges, it was clear that many institutions have not begun to address this issue.  In looking at the state regulations, the regulations are complex and some of the agencies take many months (if not years) to act on applications.

I wrote back to Fred:  “There is no way that many hundreds of institutions will meet this deadline…isn’t there a process/timeline that we can develop that is actually possible for institutions to achieve?”

But ‘Good-Faith’ Efforts are Rewarded

Here is the response from Fred…

If an out-of-State institution is offering distance education in a State that regulates distance education offerings, including online or correspondence study, these activities by the out-of-State institution must comply with the State’s requirements as determined by the State if the institution’s activities in that State are to be considered legally authorized in the State for Federal purposes.

We can approach this issue from the point of view of enforcement in the initial award year of implementation as we often do with new regulations and look to whether the institution is making a good-faith effort to comply with State requirements.

For the 2011-2012 award year, we will consider an institution to be making a good-faith effort to comply with the distance education regulations for State authorization, if–

• The institution has applied for approval of its offerings in such a State, and
• The State confirms that the out-of-State institution is trying to meet the State’s requirements.

If a State does not regulate such activities by out-of-State institutions, the institution is considered to be legally operating in that State.

As you may recall, an institution is expected to be in compliance at all times and may be required to demonstrate compliance upon request  but will not otherwise need to provide any documentation to the Department for this requirement regarding distance education.  A request might be made, for example, due to a student complaint, during a program review, or as part of an institution’s recertification to participate in the title IV, HEA student assistance programs.

I am very glad that we were able to work with Fred and his colleagues at the U.S. Department of Education to get this clarification on behalf of all distance education institutions.  Many thanks to Fred for being so responsive on this issue.

So, What’s Next?

I continue to have conversations with many people about how to interpret and improve this situation. I will continue to update you.  A couple highlights:

• In talking to Fred Sellers, he said that the USDOE’s “Dear Colleague” letter (which will further interpret issues around the regulations released in late October) will actually be multiple letters covering this and other regulations released in late October.  He expects the first letter to be issued in February and he is pushing to have the state approval issue addressed in the February letter.
• WCET (in partnership with the Southern Regional Education Board, the American Distance Education Consortium, and the University of Wyoming) is working on a list of approval agencies in each state.  This list will provide very basic information…and we’re finding even that is not easy to do. We hope to have that list to you soon.
• Several states do not regulate distance education, but we are finding that blanket statements don’t work very well.  Whether your institution should be approved by a state may depend on factors including physical presence (no standard definition), advertising in the state, and whether you require students to take proctored tests in their home state. Regulations and interpretations resemble shifting sands a bit more than we thought they might.

More to come!!

Russ Poulin
Deputy Director, Research & Analysis
WCET – WICHE Cooperative for Educational Technologies
rpoulin@wiche.edu
Twitter hashtag on this issue: #stateapp
http://wcet.wiche.edu/advance/state-approval