Summary from WCET on State Authorization Reciprocity Agreement

For any online program in the US that enroll students from more than one state, the issue of the Department of Education’s State Authorization proposed regulations is a major issue. WCET has played a leading role in raising awareness on the issue as well as pushing for a solution. From their summary page (read the whole page for a summary of the timeline, pushback, state regulations, etc):

On October 29, 2010, the U.S. Department of Education (USDOE) released new “program integrity” regulations.  One of the regulations focused on the need for institutions offering distance or correspondence education to acquire authorization from any state in which it “operates.”  This authorization is required to maintain eligibility for students of that state to receive federal financial aid. Institutions have until July 1, 2014, to have obtained the appropriate approvals. Meanwhile, institutions are required to demonstrate a ‘good faith’ effort to comply in each state in which it serves students. While the regulation has been ‘vacated’ by court order, we believe it will be reinstated.

To give an idea of the issues, consider that Missouri charges institutions $5,000 – $25,000 fees to register in the state, and there is a burdensome process. While not all states are as expensive as Missouri, the costs and overhead add up quickly, and there are conflicting and inconsistent requirements from state to state. According to a survey from UPCEA, WCET and Sloan-C, one third of online programs have not applied to any states outside their home, despite the serving a median of 37 states. Furthermore State Authorization rules would stifle online education programs and is already causing many programs to reject students in certain states.

Despite losing in court (the ruling was vacated), the Department of Education still plans on pushing forward and planning to revive State Authorization.

The most promising approach to dealing with this situation is the State Authorization Reciprocity Agreement (SARA).

The backbone of the Commission’s recommendations is a system of interstate reciprocity based on the voluntary participation of states and institutions to govern the regulation of distance education programs. Participating states will agree on a uniform set of standards for state authorization that ensure that institutions can easily operate distance education programs in multiple states as long as they meet certain criteria relating to institutional quality, consumer protection, and institutional financial responsibility (further described below). Participating institutions must be authorized by their “home state” (which is, presumptively, the institution’s state of legal domicile).Once designated, the home state should have responsibility for authorizing the institution for purposes of interstate reciprocity and be the default forum for consumer complaints.

WCET has a summary post up by Russ Poulin that describes the latest report and commission meeting on SARA.

A national meeting on next steps in state reciprocity was held in Indianapolis on April 16 and 17. The purpose of the event was to serve as an initial introduction to representatives from each state about next steps in reciprocity.

The session focused on the report: Advancing Access through Regulatory Reform: Findings, Principles, and Recommendations for the State Authorization Reciprocity Agreement (SARA) that was recently released by the Commission on the Regulation on Postsecondary Distance Education. The Commission, which is a committee formed by APLU (the land-grant universities) and the State Higher Education Executive Officers, built upon the work of previous efforts of the Presidents’ Forum/Council of State Governments and the regional higher education compacts. You can see a short history of state authorization and the reciprocity efforts on our web page.

Russ goes on to describe support from ACE and even Hal Plotkin from the Department of Education:

While the Department of Education cannot formally endorse the work, he brought a two-word message from the Secretary Arne Duncan and  Under Secretary Martha Kanter:  “thank you.”

There is also a summary of the key questions being considered, including accreditation affects, fees for institutions participating in SARA, determination of Home State, and impact of the 25% rule (more on that one in a future post).

In short – this is an important issue to track, and WCET has some excellent resources to help online programs stay up-to-date.

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About Phil Hill

Phil is a consultant and industry analyst covering the educational technology market primarily for higher education. He has written for e-Literate since Aug 2011. For a more complete biography, view his profile page.
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One Response to Summary from WCET on State Authorization Reciprocity Agreement

  1. Don Allen says:

    It seems to me that SARA is an effort to create regulatory boards on the basis of a single anecdote (Missouri). It seems to be both required and voluntary. Moreover, if a student in WI attends a campus on NY, there is no such reciprocity required. But somehow, when a student takes a course outside his/her home state, this requires regulation. All this amounts to a regulatory board created with inherent contradictions and conflicts within the broad scope of higher education.