On Friday, November 1, the Department of Education published its final state authorization for distance education regulations in the Federal Register, available here. The rule draws on the 2016 version of the state authorization regulations, ordered into effect by a federal court decision in May of this year, but contains important changes, notably around the scope of professional licensure disclosures and eliminating the requirement for states to maintain an adequate process for reviewing student complaints. The regulations are slated to take effect on July 1, 2020, but as expected, ED will allow institutions to opt for early implementation as of November 1, 2019, which would bypass compliance with the 2016 rules currently in effect.
As background, the new distance education regulations follow ED’s April 2019 negotiated rulemaking, which, to the surprise of many, reached consensus on the two key requirements of the state authorization rule:
- the requirement that institutions obtain any required state authorizations for distance education programs as a condition of eligibility to offer federal student aid to students located in such states; and
- consumer disclosure requirements, particularly around programs that prepare students for professional licensure.
The consensus rule was published in a notice of proposed rulemaking (NPRM) on June 12, 2019, and ED accepted public comments on the rule through July 12. The final rule largely follows the NPRM and consensus rule.
The final rule retains 34 C.F.R. § 600.9(c), initially implemented in the 2016 state authorization regulations, and part of the rule package that became effective in May of this year. Section 600.9(c) mandates that institutions satisfy any requirements under state law to enroll students in distance learning programs in any state in which the institution is not physically located or in which the institution is otherwise subject to the state’s jurisdiction. Satisfying such state requirements is a condition of Title IV eligibility. Alternatively, an institution can satisfy this requirement if it participates in a state authorization reciprocity agreement (as defined in the rule) that covers the institution’s activities in the relevant state or territory.
ED clarified that, under the new rule, a qualifying state authorization reciprocity agreement cannot “prohibit any member State of the agreement from enforcing its own general-purpose State laws and regulations outside of the State authorization of distance education.” The revised definition resolves lingering confusion under the 2016 law definition and clarifies that states may still enforce “general-purpose” consumer protection laws against institutions operating in their jurisdiction under a reciprocity agreement as long as those laws are not specific to out-of-state education providers.
Note also that the final rule eliminates the 2016 rule’s requirement that institutions offering distance education courses to students in any state in which they are not physically located be able to demonstrate that such state has a process for resolving student complaints. Ambiguity around this requirement gained attention in July of this year, when ED announced that California lacked a complaint process and that California residents enrolled at out-of-state public and nonprofit institutions were therefore ineligible for federal student aid funds. In response, California rushed to put in place a student complaint process, and ED has stated it will accept California’s process as meeting the requirements under the 2016 version of the rule currently in effect. However, the incident raised concerns that some states other than California do not have an adequate complaint process in place to satisfy the rule. ED eliminated the complaint process in the new rule entirely, stating that it is not necessary since schools are required to provide students with contact information for filing complaints with its State licensing agency under 668.43(b).
Disclosure Requirements Applicable to ALL Institutions Regardless of Delivery
Under the final rule, institutions offering programs, regardless of mode of delivery, that are either (1) designed to meet educational requirements for a specific vocational license or certification that is required for employment in an occupation or (2) advertised as meeting such requirements must inform both prospective and currently enrolled students of the specific states in which:
- The institution has determined its curriculum meets the state educational requirements for licensure or certification
- The institution has determined its curriculum does not meet the state educational requirements for licensure or certification
- The institution has not made a determination that its curriculum meets the state educational requirements for licensure or certification
The final rule requires institutions to make the required professional licensure disclosures “readily available.” An institution satisfies this requirement by publishing the required disclosures in their catalogs or on their website. However, in certain cases described below, institutions must make