Regulation Woes

Online educators convene in Washington to discuss ways to avoid having to apply for approval in every state.
October 14, 2009

WASHINGTON -- A group of Web-based education administrators, consultants, government officials, and researchers gathered here Tuesday to talk about how to streamline the process by which states approve distance education programs, at a time when more adults need postsecondary degrees and many want to get them online.

“Our big goal is to increase the percentage of Americans with high-quality postsecondary degrees from 40 percent to 60 percent” by 2025, said James L. Applegate, senior vice president of the Lumina Foundation for Education, in his keynote address at the Presidents’ Forum, an association of adult-serving education providers that met at the U.S. Chamber of Commerce here. Lumina's "big goal" is largely aligned with a similar push by the Bill and Melinda Gates Foundation, the Obama administration and others.

Applegate noted that Presidents’ Forum institutions are “key to what we are trying to do” -- that is, improve access to “high quality” higher education. Indeed, many of the institutions represented were here to talk about how they might be able to enroll students from across the country without having to contend with 50 different state-based approval agencies. Regulators from those agencies, meanwhile -- some of whom were also present at the conference -- remain concerned about maintaining the “high quality” aspect, especially since the online-only format, they fear, can leave people vulnerable to fraud at the hands of “diploma mills.”

While a new report by the Presidents’ Forum acknowledged that fraud protection was a noble and worthwhile pursuit, its authors called on regulators to trust other states’ judgments and exempt online colleges that had been approved elsewhere from the bureaucratic rigmarole normally required of new higher education institutions. Ed Klonoski, president of Charter Oak State College (tagline: “Degrees Without Boundaries”), a public college in Connecticut, compared the current system to requiring truckers to acquire license plates for every state they want to drive in.

“It’s that whole free-trade thing,” Klonoski told Inside Higher Ed, referring to the popular argument that states are trying to block interlopers that might threaten their own public institutions. “Do you protect your own industries, or do you open the state up to low-cost providers?”

Alan Contreras, administrator of Oregon’s Office of Degree Authorization, offered another view of why state authorities are so reluctant to rubber-stamp online colleges that have been okayed by other states. “A state is legally responsible for the degrees

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issued under its jurisdiction,” Contreras said. The problem posed by distance education is that a Web-based college that has its physical presence in, say, Connecticut, might be granting degrees to Oregon residents. It is unclear whether Connecticut or Oregon must vouch for the legitimacy of that degree and the programs and actions of the college that issued it, he said.

Contrary to popular belief, Contreras said, regulators that enforce redundant approval are as worried about being had by diploma mills as they are about being held responsible for addressing complaints about administrative misbehavior or unqualified faculty. These “host” states might be more willing to demand oversight, he said, if the online colleges’ “home” states formally assumed responsibility for the degrees those colleges were awarding all over the country.

As some attendees pointed out, one thing that has made state-based regulation such a complicated issue is that authorization policies do not just operate differently depending on the state; they are enforced differently depending on the institution.

So said Russell S. Kitchner, associate vice president for regulatory and governmental relations at American Public University System. “I have found this to be the case in a number of states, where, confronted with the question, ‘If I were an online institution, and I wanted a presence in your state, and my name was Stanford, or Cal-Berkeley, or the University of Notre Dame, would you be asking me to get some form of prior approval before I sent representatives to a career fair?’ the answer would be sometimes an unambiguous ‘Yes, we would’ -- which, quite frankly, I find difficult to believe -- or, ‘Well, I’m not sure.’

“In some states you’ll find people who are just going to decide to interpret the legislative intent of the laws under which they are operating in a way that is convenient or consistent with their own personal opinions,” Kitchner added. “…That’s not good for the industry, it’s not good for the agency, and it does not breed the kind of cooperative environment which I think is going to be necessary in the longer term."

And then there is the question of colleges' offering online courses that transcend not just state borders, but international ones. Dennis Cheek, a senior fellow at the Kauffman Foundation, said that several members of his family are taking distance ed courses from institutions outside the United States. “In our interactions with those programs, we’ve been finding lots of other students like ourselves -- Americans,” he said. “I know for a fact that none of these institutions are being regulated in any way by any of these states.”

“It may be easier to come in from overseas and operate in the U.S. than it may be for an institution in the U.S. to operate in the U.S.,” said Michael Goldstein, a lawyer at Dow Lohnes, a Washington law firm. Goldstein added that he has seen even top-tier American institutions put "through the wringer" of state regulation.

As far as progress toward a more palatable system, Bruce Chaloux, director of the Southern Regional Education Board’s Electronic Campus, said there is cause for optimism. He pointed to SREB’s example, wherein most universities from the association’s 16 states have agreed on a system by which each “home” state would take responsibility for online institutions headquartered within its borders, freeing those virtual colleges from the burden of having to seek approval in each of those states.

“So the question is, can we take this 16-state approach and apply it broadly?” Chaloux said. “I make the argument that we could, if we engaged in other regional [associations]. There are three others -- that would get us I think up to all but four, five states in the country…. So the elements are there.”


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