Final Push for State Authorization Rule

Education Department will push to finalize rule on state approval of online programs before the end of the year.

June 6, 2016

The U.S. Department of Education will make one last effort in the Obama administration to finalize rules governing how colleges become authorized to offer distance education programs to students in other states.

The department last week submitted the rule to the Office of Budget and Management, a procedural first step on the path toward the rule taking effect. Many observers had expected the department to leave the issue of state authorization for the next administration to sort out, given its previous unsuccessful attempts and the myriad other items on its to-do list -- not to mention the impending presidential election and transition.

“We thought this had been put on indefinite hold, with ‘indefinite’ meaning next to never,” said Russell Poulin, director of policy and analysis for the WICHE Cooperative for Educational Technologies, who participated in the last attempt to reach consensus on the rule.

The proposed language of the rule is not yet public, but it is sure to cause a flare-up in a debate that has smoldered for nearly six years. The Education Department first proposed in the rule in 2010, but a federal court struck it down less than a year later on procedural grounds. After delaying the rule from taking effect, the department in 2014 convened a negotiating committee tasked with reaching a compromise, but no consensus emerged. The department shortly thereafter said it would halt work on the rule.

If the rule is to take effect July 1 next year, the department needs to move fast. The final rule has to be issued before the end of October, which means the department needs it to quickly pass OBM review so it can be opened up for public comment -- a period that must last for at least 30 days.

Daniel T. Madzelan, a former acting assistant secretary for postsecondary education who now serves as an assistant vice president for the American Council on Education, called the timeline “ambitious,” but said, “if it’s really something these guys want to get done before Mr. Obama walks out of office, then they’ll get it done.”

A spokesperson for the department did not respond to a request for comment.

Given the time constraints, both supporters and critics of the rule said they expect it not to differ significantly from previous drafts.

“I would imagine that it probably does not stray very far from what they proposed at the negotiated rule making,” said Poulin, whose organization works with member institutions to improve their online programs.

That means the department may still seek to include a provision in the rule that would require states to conduct an “active review” of out-of-state colleges. Distance education groups have previously criticized that provision, saying it will “circumvent local judgment and add review costs” that will be passed on to students. Proponents of the requirement say it can protect students from predatory institutions.

But that requirement could be softened by a recognition of initiatives that aim to simplify the process by which colleges become authorized to offer their programs in other states, such as the State Authorization Reciprocity Agreement, or SARA. Instead of a college navigating 50 sets of state-level regulations to become authorized to offer programs to students across the U.S., membership in SARA clears colleges to offer programs to students in states that also have joined (at the moment, SARA has 37 member states).

“I would expect to see a provision in the rule, which acknowledges interstate reciprocity agreements,” said Marshall A. Hill, executive director of SARA’s national council. “I will be really surprised if there’s anything much in there that causes a problem for what we’re trying to do.”

Hill said he has not spoken about SARA with Education Secretary John B. King Jr., but said other senior officials in the department have previously said they do not want the rule to interfere with SARA’s work. The organization is expected to pass 40 member states and 1,000 member universities (most of them public or private nonprofits) in the coming weeks, he said.

ACE was among the many higher education associations that opposed the state authorization rule. Madzelan declined to say how the organization intends to respond to the department, saying it needs to see the proposed language of the rule.

“We expect something that does not look terribly different from the provision that the court struck down, but maybe with some additions -- maybe the SARA piece,” Madzelan said. “We’ll just have to see what their thinking is.”


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