Court Rejects ED Rule on Distance Education
July 15, 2011
The United States District Court for the District of Columbia has thrown out the Department of Education’s new rule requiring institutions that offer distance education to be licensed in the states where their students reside, if state law so requires. Ruling on a suit brought by the Association of Private Sector Colleges and Universities (APSCU, formerly known as the Career Colleges Association), the Court found that ED had not provided sufficient notice and opportunity for comment on the provision, which was added at the final rule stage in response to comments received from the public on its proposed rule (which did not mention distance education). At the same time, the Court upheld ED’s rules on incentive compensation and misrepresentation.
The vacated provision, part of ED’s program integrity regulations, has created a great deal of angst among higher education institutions that offer distance education programs. Many were unaware that some states have laws on the books requiring licensure of institutions located in other states if students reside in the state under various circumstances. Even states were taken by surprise when they were inundated with inquiries from colleges and universities about their requirements. In April, ED announced that it would delay enforcement of the provision until 2014 for institutions that could demonstrate a good faith effort to comply.
The practical impact of the court’s ruling is unclear. ED’s regulation had tied the eligibility of distance education programs for Title IV student aid to state licensure, but the state laws and regulations are still in force. Those states with stringent requirements and, in these times of tight state budget outlooks, those with significant fees attached to licensure, may now be more inclined to enforce their rules. Further, ED is free to re-propose its regulation. The judge did not find that there was anything inherently wrong with the rule, but only that it was too different from the proposed rule as published to be imposed without providing an additional opportunity for comment.
Vice President, Regulatory Affairs
- Affordable Care Act: Final Rules on Coverage for Adjuncts and Students
- Administrative Jobs and Benefits Costs Drive Higher Ed Labor Costs
- OMB Super Circular Makes Changes to Audit Requirements
- 2014 Higher Education Accounting Forum
April 27-29, 2014
- ON-DEMAND: Understanding the Results of the 2013 NACUBO-Commonfund Study of Endowments, and a Look to 2014 and Beyond
- ON-DEMAND: How Behavioral Changes Helped Cut Energy Usage in Half
- ON-DEMAND: Developing a Market-Informed Approach to Tuition Pricing
- ON-DEMAND: Responsibility Center Management: The Process Necessary to Complete a Successful Implementation
- ON-DEMAND: OD: Responsibility Center Management: How Innovations Have Changed the Nature of RCM
- A Guide to College and University Budgeting: Foundations for Institutional Effectiveness, 4th ed. - by Larry Goldstein
- NACUBO's Guide to Unitizing Investment Pools - by Mary S. Wheeler
- Managing and Collecting Student Accounts and Loans - by David R. Glezerman and Dennis DeSantis