ED Proposes New Rules for Distance Education and Foreign Locations

On July 25, the Department of Education published a notice of proposed rulemaking (NPRM) introducing new regulations for distance learning and correspondence courses and recognizing, for the first time, state authorization reciprocity agreements. The proposal also would require colleges and universities with branch campuses or additional locations outside the United States to obtain appropriate authorization from the host country and their state.

Comments on the proposed rules are due August 24. After reviewing comments, ED will aim to publish final rules by November 1 in order for them to take effect July 1, 2017.

Background

State authorization for distance education programs has been a contentious issue since the department included the topic in its 2010 program integrity rules. In the latest version, ED’s stated goals are to increase the transparency and access of distance learning programs, update and clarify requirements for state authorization of such programs, and provide a process for students to access complaint mechanisms both in the state in which they reside and in the state in which the institution’s main campus is located.   

In 2012, the United States Court of Appeals for the District of Columbia upheld a lower court ruling that struck down part of the state authorization requirement in ED's program integrity rulemaking on procedural grounds. The original rule had required institutions to obtain authorization for distance education programs from states in which students reside, if required by state law, to remain eligible for Title IV student assistance.

NACUBO joined many other higher education associations expressing concerns about the 2010 state authorization requirements, arguing that the regulation allowed significant state intrusion into academic decision-making and created significant and unnecessary burdens for institutions. The previous version also would have put the federal government in the position of enforcing state distance education laws.

ED included state authorization in its negotiated rulemaking efforts in 2014 (along with its cash management rules), taking an even tougher stance on distance education programs than it had in the 2010 rules. The new proposal, while based on those negotiations, scales back that hard line position. ED also recognizes the higher education community’s efforts to build a more rational system for state authorization of distance education by recognizing reciprocity agreements. The National Council for State Authorization Reciprocity Agreements (NC-SARA) has established national standards for interstate offerings of postsecondary distance education courses and programs. To date, 40 states have joined the effort.

Distance Education

ED would require institutions seeking eligibility to participate in Title IV for distance education or correspondence courses to be authorized by each state in which the institution enrolls students. 

The proposed regulations would define a state authorization reciprocity agreement (SARA) as an agreement between two or more states that authorizes an institution located in a state covered by the agreement to provide postsecondary education through distance learning or correspondence courses to students in other states covered by the agreement. Participation in a reciprocity agreement for any pertinent state would be compliant.

The institution would need to document the state process for resolving complaints from students enrolled in programs offered through distance education or correspondence courses.

Institutions would be required to make general disclosures about their distance learning or correspondence courses to current and prospective students. A compliant statement listed on the institution’s website or in the advertising materials or program descriptions for distance learning or correspondence courses would suffice. The proposed required general disclosures are as follows:

1. How the distance education program or correspondence course is authorized and if (and how) it is authorized by each state in which students enrolled in the program reside.
2. How to submit complaints to the appropriate state agency or authority (if the institution participates in a SARA).
3. How the student can submit complaints to the appropriate state agency or authority in the student’s state of residence.
4. Any adverse actions taken by a state or accrediting agency against an institution’s distance education or correspondence course program and the year that the action was initiated for the previous five calendar years.
5. Refund policies that the institution is required to comply with, including those in the institution’s home state as well as in any state in which enrolled students reside.
6. The applicable prerequisites and licensure or certification requirements for a career the program purports to prepare a student for, and whether the program meets those requirements, for all states in which enrolled students reside.

Additionally, ED lists three triggering events that would require institutions to make direct disclosures to enrolled and perspective students (via email or mailed letter). These events are:

1. When a distance education program or correspondence course does not meet the licensure or certification requirements for a state to all prospective students.
2. When an adverse action is taken against an institution’s postsecondary education programs offered solely through distance education or correspondence to each enrolled and prospective student.
3. Any determination that a program ceases to meet licensure or certification requirements to each enrolled and prospective student.

Foreign Campuses or Locations

The proposed rules also address another instance where ED has been concerned about a lack of an equivalent to state authorization: branch campuses or additional locations of domestic institutions that are located in foreign countries. The 2014 negotiated rulemaking committee came to tentative agreement on this issue and ED has largely stuck to that version.

For branch campuses and locations where a student can complete 50 percent or more of an educational program, institutions would be required to show that they are legally authorized by the appropriate government agency of the country where it is located. They must also be approved by the institution’s accrediting agency and be reported to the state where the institution’s main campus is located at least annually. 

Foreign additional locations offering less than 50 percent of an educational program would only have to comply with requirements for authorization established by the relevant country.