CAPPS - Avocacy and Communication Professional Development

California Association of Private Postsecondary Schools

Problem with Title IV Eligibility Under State Authorization Rule

04/02/2013

INSIDE HIGHER ED. APRIL 1, 2013.  Many colleges in Florida — and potentially other states, including California and Texas — could lose eligibility for their students to receive federal financial aid under a new interpretation of the Education Department's "state authorization" rule. While the rule will not be enforced for distance education, it still requires colleges to be licensed in their own state. The Education Department is currently interpreting the rule in a way that disqualifies state licensure by means of accreditation — a process that allows colleges to bypass the ordinary licensure process and be granted state approval based on their accreditation status.

The Education Department sent letters to several Florida colleges in recent weeks, warning them that licensure by means of accreditation is not sufficient to comply with the state authorization rule. The states and the Education Department have until July 1 to resolve the dispute. At that time, all colleges must be in compliance with the department's program integrity rules, including state authorization.