States maintain the authority to regulate out-of-state postsecondary institutions that offer or participate in activities located in their state to protect students as consumers, the general public, and other interests of the state. Institutions must follow the State laws and regulations of the state where an institution’s activity takes place.
State institutional approval for out-of-state activities can be obtained either through individual authorization by the states where activities occur or by institutional participation in a reciprocity agreement. Members of the State Authorization Reciprocity Agreements (SARA) currently include 49 states, Washington, D.C., Puerto Rico, and the U.S. Virgin Islands. Institutions that participate in SARA may offer distance education related activities in other SARA member states as directed by SARA Policy.
Federal regulation 34 CFR 600.9(c) ties state authorization compliance to participation in Title IV HEA programs.
Institutions may also be subject to statutory and regulatory obligations in the state where the activity occurs overseen by other state agencies and do not fall under reciprocity through SARA. Additionally, state oversight and compliance may be required for programmatic approvals for specialized programs as well as employment law related requirements for out-of-state staff and faculty.
Institutions that offer courses and activities outside of the United States should determine if the activity is regulated in the country where the activity occurs. Distance Education may be regulated in some countries. Institutions should also be aware of the many nuances of tax laws and institution oversight when the institution wishes to provide online courses to students located outside of the United States.
Military students, dependents, and veterans are subject to the same state oversight of institutional activity as other students in a state, although there are a few exceptions subject to state law. Institutions may also be subject to the laws of other countries for military students posted outside of the United States.
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