Changes In Federal Regulation And State Authorization

Concurrent Session 5
Streamed Session OLC Session

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Brief Abstract

The Department of Education’s 2019 Negotiated Rulemaking came to consensus and provided new proposed rules related to state authorization. What happened next? Our discussion will cover new regulations, effective regulations, lawsuits, and the impact all of these have on institutions that offer out-of-state activities, programs leading to professional licensure by all modalities, and institutions that participate in a reciprocity agreement. We will also address how to provide effective and accurate communication of the responsibilities for compliance management to key stakeholders of the institution.


Jennifer Mathes, Ph.D serves as the Chief Executive Officer at the Online Learning Consortium. In this role, she provides the strategic direction for the organization and supports the development of key projects and programs to support OLC members. Dr. Mathes has 25 years of experience in both public and private education where she has continuously supported digital learning initiatives. In addition, Dr. Mathes is the author of the ICDE Report Global Quality in Online, Open, Flexible and Technology Enhanced Education: An Analysis of Strengths, Weaknesses, Opportunities and Threats (2019) and co-editor of the OLC Quality Scorecard Handbook: Criteria for Excellence in Blended Learning Programs (2017). She continues to write and present on key topics in online, blended and digital learning.

Extended Abstract

Federal State Authorization Regulations for distance education have been in erratic disarray for almost ten years. I have often called this crazy road to regulation the Federal Regulations Groundhog Day, in reference to the Bill Murray movie. It has been a long road, but we will see in this session if we finally have reached the end of the Groundhog Day loop.

We have seen stops and starts to the discussions, releases, and effective dates of federal regulations for state authorization. You may wonder why the Department wishes to regulate the activities of the institution that occur in other states. The main purpose is consumer protection. Federal State Authorization Regulations for distance education are intended to tie Title IV HEA participation by the institution to state oversight and institutional compliance with states. When the first release of a federal regulation occurred in 2010, it awakened the states to realize that activities of out-of-state institution were occurring in their states. Many states began to be more intentional in their enforcement of state regulations or they developed new regulations to provide oversight related to the surge of online courses that were being provided across state lines. The states wish to protect the students located in their states to ensure that the institutions follow their state’s requirements.

It is often lost on some institutional staff members, that States have the right to exercise control over the activities that occur within their State. Thanks to the Tenth Amendment of the U.S. Constitution, States generally control educational policy. Therefore, it has always been within the purview of the States to provide oversight of activities that occur in their State including online courses, field experiences, marketing, recruiting, etc. etc.

It is because of the understanding of the important role of the States for institutional oversight, that the State Authorization Reciprocity Agreements (SARA) were developed. Years prior to their ultimate creation, key stakeholders developed plans to meet the needs of students, institutions, and the states to provide oversight and flexibility to offer certain out-of-state activities in a consistent manner rather than by varied state processes. States voluntarily joined SARA to provide opportunities for their institutions in exchange for managing compliance in a consistent plan across member States. Most States required legislative action to join SARA.

Since the first release of final Federal regulations on this issue, that were ultimately vacated on procedural grounds, there has been almost ten years of confusion. The first regulations were vacated by the Federal courts due to procedural error by the Department, the Department attempted, in 2014, to proceed with negotiated rulemaking to develop new regulations. The rulemaking did not end in consensus. Therefore, the Department could write the rules. In the summer of 2016, in the last year of the Obama administration, the Department released proposed regulations that were full of ambiguities and misalignment with state regulation for which the Federal regulations were intended to support. Final regulations were not released until December 19, 2016 causing the effective date of the regulations to be July 1, 2018. The effective date was to be 18 months into a new Presidential administration. Many higher education institutions and organizations submitted comments and requests for information and guidance at every opportunity. The Department released the announcement of the delay of the 2016 Federal regulations on July 3, 2018 for the purposes of review and revision.

In August 2018, the Department announced its intention to enter into negotiated rulemaking to review and revise more than 20 different issues related to innovation, accreditation, state authorization, and distance education. Meanwhile in August, the National Education Association and California Teachers Association filed a lawsuit in the U.S. District Court in the Northern District of California regarding the illegal delay of the 2016 regulations.
Beginning in January, the Accreditation and Innovation negotiated rulemaking committee met through the winter months of 2019 along with the unprecedented addition of three subcommittees to provide research and advise the main committee. It was a surprise to all that on April 3, 2019 the main negotiated rulemaking committee came to consensus on all issue presented to the committee. State Authorization related regulations as well as professional licensure disclosures were review and revised in the consensus regulations. Based on the consensus language, the Department released proposed regulations for public comment on June 12, 2019.

To add to the drama, on April 26, 2019 the U.S. District court ruled for the plaintiff and directed that the delay of the 2016 regulations be vacated but stayed the ruling for 30 days. On May 26, 2019, Memorial Day weekend, the 2016 Federal regulations for state authorization and distance education disclosures became effective. WCET and SAN shared with institutions that if they are following SARA requirements for disclosures that they are well on their way to compliance. The Department filed a notice of appeal of the U.S. District Court ruling on June 24, 2019.

The session will provide the final chapter of Federal Regulations Groundhog Day and sort out the responsibilities of the institution for Federal state authorization regulation compliance while also providing reminders regarding state and SARA compliance.