Important Notice on State Authorization of Distance Education Programs
State Authorization Rules for Distance Education Providers Officially Took Effect on May 26, 2019
In an unofficial Federal Register notice published yesterday, the Department of Education explained that as a result of the April 26, 2019 decision in National Education Association v. DeVos, No. 18-cv-05173-LB (N.D. CA April 26, 2019), which went into effect on May 26, 2019, the final state authorization regulations, published December 19, 2016 (81 FR 92236), took effect. These regulations contain important changes to Sections 600.2 (Definition of a “State authorization reciprocity agreement”), 600.9(c) (State authorization); 668.2 (Definition of “Distance Education”) and 668.50 (Institutional disclosures for distance or correspondence programs).
As the Department noted in a guidance document published yesterday (ed.gov/announcement), one of the key changes in these regulations is that “If an institution of higher education offers distance education or correspondence courses to students residing in a State, and the institution is not physically located in that State, the institution must document that the State has a process for reviewing and taking appropriate action on complaints against the institution by those students (or that the State participates a State authorization reciprocity agreement which addresses the issue).”
The Department goes on to explain that, “if the State does not have a complaint process that applies to an out-of-State institution providing distance education to students in that State (or participate in an appropriate reciprocity agreement), the institution cannot comply with the requirement with regard to those students.” This was the interpretation provided when the regulation was published in December 2016.
Critically, the Department adds that it “has been informed that the State of California has a registration process for out-of-state for-profit institutions that provide distance education programs, but does not have a process to manage complaints for out-of-state public or non-profit institutions serving students at a distance in the State.” As such, because California does not participate in a state authorization reciprocity agreement that addresses the issue, “until California establishes such a process for out-of-state public and non-profit institutions or enters into an appropriate reciprocity agreement,” “students residing in California receiving distance education or correspondence courses from out-of-state public or non-profit institutions are ineligible for Title IV programs” until California rectifies the situation (by creating a complaint process or it entering into a reciprocity agreement).
The Department recognizes that it has reconsidered this policy “based on the harm it will cause to students and institutions alike” and “proposed a new regulation based on a consensus reached during negotiated rulemaking that eliminates the complaint documentation requirement.” However, while the Department intends to file a motion for clarification with the Court “in an effort to seek and obtain protection for students in California”, “until a new regulation is implemented or the Court rules otherwise, the 2016 regulation applies as written.”
Needless to say, if your institution has students in online classes that reside in California, you need to review this matter carefully and should strongly consider alternatives for affected students.