DISCLAIMER
• The Views Expressed In This Presentation Are Those Of The
Speaker(s) Only.
• The Contents Of This Presentation Does Not Constitute
Legal Or Regulatory Advice. No One Should Act Or Refrain
From Acting On The Basis Of This Presentation Without
Seeking Individualized, Professional Counsel As
Appropriate.
2
OUTLINE OF DISCUSSION
1. Department of Education State Authorization Rule - 34 C.F.R. § 600.9
A.
B.
C.
D.
Purpose and Statutory Basis
Legal History
Interpretation of the Current Federal Rule
Implementation Timeline and Enforcement
2. Ongoing Negotiated Rulemaking - Distance Education and Correspondence
Courses, Foreign Locations
3. SARA and State Exercise of Jurisdiction Over Distance Education
3
STATE AUTHORIZATION RULE – PURPOSE
TO ADDRESS DEPARTMENT OF EDUCATION CONCERNS THAT–
• Under the Higher Education Act, States have an important role in the
Federal/Accreditor/State triad of gatekeepers of institutional eligibility standards for
Title IV funding, yet some States have been delegating their role to accreditors by, for
example, providing State law exemptions that function as waivers of State oversight.
• As a result, the Department of Education believes there is a need to establish certain
minimum requirements for State oversight of postsecondary education as a
condition of Title IV institutional eligibility only.
• The Department does not view the regulation as an impermissible federal directive to
States (and the D.C. Circuit agrees), because States are free to act or not act in a
manner that will ultimately impact only a school’sTitle IV eligibility.
See Preamble, Final Rule, 75 Fed. Reg. 66832-66975 (Oct. 29, 2010)
4
STATE AUTHORIZATION RULE – STATUTORY
BASIS
The Higher Education Act requires that, as a condition of
participation in Title IV student financial aid programs, an
institution of higher education (whether public or nonprofit,
vocational or proprietary) must be “legally authorized within
such State to provide a program of education beyond
secondary education” (20 U.S.C. §§1001, 1002)
5
STATE AUTHORIZATION RULE – LEGAL HISTORY
The D.C. Circuit Court reversed the district court decision that APSCU lacked
standing to challenge the State authorization regulation and reached a decision
on the merits that the Department’s State authorization rule complies with the
Administrative Procedure Act because it is based on HEA statutory authority and
“reasoned decision-making,” and thus not arbitrary or capricious. D.C. Circuit
accepted the portion of ED’s rationale based on perceived problems to students
caused by the prior California oversight agency lapse of oversight and
“anecdotal” evidence of State-shopping by schools looking to locate in States
with weak oversight.
Upshot: Department of Education has authority to require minimum standards
under State law in order for institutions to be Title IV eligible and is free to fully
implement 34 CFR 600.9(a) and (b).
6
STATE AUTHORIZATION RULE –
LEGAL HISTORY
• The D.C. Circuit upheld the District Court’s decision to vacate the portion of the
October 29, 2010 Final Rule that would have provided authority to the Department of
Education to establish authorization requirements for schools offering distance
education in States where they do not have a physical presence (i.e, the State in
which the student, not the institution, is located) .
• The D.C. Circuit agreed with the District Court that the regulation violated the
Administrative Procedures Act because the Department failed, by not including the
issue in the negotiated rulemaking or proposed rule, to provide adequate notice of
the distance education portion of the rule to regulated parties. See APSCU v. Duncan,
681 F.3d 427 (D.C. Cir. 2012)
Practical Effect: 34 CFR 600.9(c) is vacated and cannot be enforced. As a result, ED
initiated the current Negotiated Rulemaking session on distance education to reestablish a distance education /correspondence course State authorization rule.
.
7
STATE AUTHORIZATION RULE –
LEGAL HISTORY
Vacated 34 CFR 600.9(c) –
“If an institution is offering postsecondary education through distance or
correspondence education to students in a State in which it is not
physically located or in which it is otherwise subject to State jurisdiction as
determined by the State, the institution must meet any State requirements
for it to be legally offering postsecondary distance or correspondence
education in that State. An institution must be able to document to the
Secretary the State’s approval upon request.”
8
STATE AUTHORIZATION RULE – LEGAL HISTORY
• NOTE WELL:
• Institutions are still, for Title IV purposes, required to comply fully
with current State laws applicable to their institutions and Title IV
eligible programs, including State laws applicable to distance or
correspondence education. See DCL GEN-12-13.
• 34 CFR 602.28(a)– An institutional accrediting agency may not
accredit or pre-accredit institutions that lack legal authorization
under applicable State law to provide a program of education
beyond the secondary level.
9
FEDERAL STATE AUTHORIZATION RULE – LEGAL
HISTORY
• NOTE WELL: The legal decision vacating the distance education portion of
the rule actually energized, in many cases, State exercise of jurisdiction over
non-resident schools providing educational services (often defined as credit
bearing courses or programs) to students residing in that State. As a result,
notwithstanding the absence of a federal State authorization rule for
distance education, institutions of higher education have had to take steps
to assess the status of law in the States in which their students reside and,
where necessary, come into compliance with current State law. It has
become a necessary cost of doing business to know and monitor changes in
State law that may affect an institution’s legal obligations, at least until a
critical mass of States agree to reciprocity for a uniform measurement of
State oversight for distance education purposes that reduces cost and
burden.
10
Meets State Authorization Requirements*
CURRENT FEDERAL STATE AUTHORIZATION
RULE – REQUIREMENTS
Legal Entity
Entity Description
Approval or Licensure Process
Educational
Institution
600.9(a)(1)(i)(A)- A [public, private nonprofit, or forprofit institution] established by name as an
educational institution by a State through a charter,
statute, constitutional provision, or other action
issued by an appropriate State agency or State entity
and is authorized to operate educational programs
beyond secondary education, including programs
leading to a degree or certificate.
600.9(a)(1)(i)(B) – The institution must
comply with any applicable State approval or
licensure requirements, [and be approved or
licensed by name;] except that the State may
exempt the institution from any State
approval or licensure requirement based on
the institution’s accreditation or being in
operation at least 20 years, [or use both
criteria].
•
•
Bracketed language contained in DCL GEN-12-13 (7/27/2012)
Does not apply to Federal, tribal and religious organizations
11
Meets State Authorization Requirements*
CURRENT FEDERAL STATE AUTHORIZATION
Legal Entity
Entity Description
Approval or Licensure Process
RULE – REQUIREMENTS
Business
600.9(a)(1)(ii) –
If an institution [for-profit entity] is established
by a State on the basis of an authorization [or
license] to conduct business in the State [to
conduct commerce or provide services], but
not established by name as an educational
institution under 600.9(a)(1)(i).
Query: Do all for-profits = business entities?
•
•
600.9(a)(1)(ii)(A) – [The State must
have a State approval or licensure
process and] The institution must by
name be approved or licensed by the
State to offer programs beyond
secondary education, including
programs leading to a degree or
certificate; AND
600.9(a)(1)(ii)(B) – An institution in
this category may NOT be exempt from
State approval or licensure
requirements based on accreditation,
years in operation, or a comparable
exemption.
Bracketed language contained in DCL GEN-12-13 (7/27/2012)
Does not apply to Federal, tribal and religious organizations
12
Meets State Authorization Requirements*
CURRENT FEDERAL STATE AUTHORIZATION
Legal EntityRULE – REQUIREMENTS
Entity Description
Approval or Licensure Process
Charitable Organization
600.9(a)(1)(ii) –
If an institution [non-profit entity] is
established by a State on the basis of an
authorization [or license for the public interest
or common good], but not established by
name as an educational institution under
600.9(a)(1)(i).
600.9(a)(1)(ii)(A) – [The State must
have a State approval or licensure
process and] The institution must by
name be approved or licensed by the
State to offer programs beyond
secondary education, including
programs leading to a degree or
certificate; AND
600.9(a)(1)(ii)(B) – An institution in
this category may NOT be exempt from
State approval or licensure
requirements based on accreditation,
years in operation, or a comparable
exemption.
•
•
Bracketed language contained in DCL GEN-12-13 (7/27/2012)
Does not apply to Federal, tribal and religious organizations
13
ADDITIONAL GUIDANCE – DCL GEN-12-13 (JULY
2012) – “ESTABLISHED BY NAME”
600.9(a)(1)(i)(A)- A [public, private nonprofit, or for-profit
institution] established by name as an educational institution by
a State through a charter, statute, constitutional provision, or
other action issued by an appropriate State agency or State
entity and is authorized to operate educational programs beyond
secondary education, including programs leading to a degree or
certificate.
Q2/A2: Articles of incorporation that establish the institution by
name and identify its purpose as offering postsecondary
education can meet the “established by name” requirement “if
the institution can demonstrate that the State played an active
role in authorizing the entity to provide postsecondary
education.”
14
ADDITIONAL GUIDANCE – DCL GEN-11-05
(MARCH 2011) – “ESTABLISHED BY NAME”
•
Under 600.9(a)(1)(i)(A), articles of incorporation may meet the
requirement for an institution to be “established by name” as a
postsecondary educational institution “if the articles are for the
establishment of a postsecondary institution and the institution is
incorporated by name” but not if “the articles of incorporation are
the same as articles of incorporation for a business or nonprofit
entity in the State.” This goes to the “active role” requirement.
A letter issued by a State naming an institution would not satisfy the
“other action” requirement in 600.9(a)(1)(i)(A). The legal
instrumentality in the State with authorization over the institution’s
existence must take the “other action.”
15
ADDITIONAL GUIDANCE – DCL GEN-13-20
(AUGUST 2013) – “OTHER ACTION”
Under 600.9(a)(1)(i)(A), an educational institution must demonstrate that it has
been established by name as an educational institution by a State through a
specified method or by “other action issued by an appropriate State agency or
State entity.” Institution must provide acceptable documentation to ED including
but not limited to:
•
Documentation that names the institution as a participant in a State Grant
Program where its students receive State funds that are provided only to
students attending postsecondary institutions in the State.
•
Documentation from an in-State institution that it has an articulation
agreement with a public postsecondary institution in the State for transfer
students from the institution to receive credits at the postsecondary level for
courses completed at the institution. Must include both articulation
agreement and credit transfer policy of the public postsecondary institution.
16
ADDITIONAL GUIDANCE – DCL GEN-13-20
(AUGUST 2013) – “ACTIVE ROLE”
34 CFR 600.9(a)(1)(ii)(A) – An institution established to conduct business in the
State or to operate as a nonprofit charitable institution must show that the State
took an “active role” in approving or licensing the institution. Examples -• An institution simply paying a fee to a State agency to receive an approval or
license without an additional process to evaluate the institution to offer
postsecondary educational programs is not an “active role”.
• State approval for a GED program would not meet the requirement for State
approval of a postsecondary program.
• Agencies issuing licenses for both secondary and postsecondary programs
may not meet this requirement if it not apparent to the public that the
institution has been authorized to provide postsecondary programs.
17
ADDITIONAL GUIDANCE – DCL GEN-13-20
(AUGUST 2013) – POSTSECONDARY
PROGRAMS
For an institution not established by name as an educational institution in the
State, but instead established to conduct business or operate as a nonprofit
charitable institution, the State must approve or license the entity as an
educational institution “to offer programs beyond secondary education” under
34 CFR 600.9(a)(1)(ii)(A).
•
“If an institution’s documentation of State approval to offer educational
programs does not show that the programs it provides are postsecondary,
the institution can show that the State agency is only authorized to resolve
applications from postsecondary institutions.”
•
If the State agency that issues the license does so for both secondary and
postsecondary programs, it must be clear to the public, and supported by
agency regulations and the licensure process, that the institution has been
authorized by the State to provide postsecondary educational programs.
18
LICENSE BY MEANS OF ACCREDITATION
Department of Education approved Florida Commission for Higher
Education’s LBMA process and requirements as compliant with the
State authorization rule because the State provided evidence that:
• Approval process is not simply a waiver of State requirements based
on accreditation.
• Florida retains an active role in authorizing institutions and there are
numerous other requirements in addition to submission of
accreditation materials.
• Therefore, LMBA is an alternative licensure process under State law,
not simply a waiver of State law.
• Institutions licensed by means of accreditation had access to the CIE
complaint process.
19
EXEMPT EDUCATIONAL INSTITUTION
600.9(a)(1)(i)(A)- A public, private nonprofit, or for-profit institution established by name by a
State through a charter, statute, authorized by the State to offer postsecondary education in
its articles of incorporation, or other action by an appropriate State agency or State entity.
•
Department has significant backlog of inquiries pending about status of exempt institutions
•
Appears to be a very fact-specific, case by case analysis by the Department.
•
Possible problem States based on exemption rules: AK, CA, GA, HI, MT, NM, OR, SD, TX, UT
•
The Department has given some signals that it may not consider for-profit institutions
to meet this definition.
• Case by case determination.
• Uncertainty remains regarding any non-public institution operating under a
State-granted exemption based on accreditation, years in operation, or similar
criteria.
20
OTHER OPEN ISSUES/QUESTIONS
•
State Agencies Where Secondary/Postsecondary Jurisdiction is Blurred
• Trucking, cosmetology – can State approval body show/does State
approval body want to take the position that their authority includes
specifically authorizing “postsecondary institutions to offer programs
beyond secondary education”?
21
STATE AUTHORIZATION RULE – COMPLAINT
PROCESS
• 600.9(a) –
“An institution is legally authorized by a State if the State has a
process to review and appropriately act on complaints concerning
the institution including enforcing applicable State laws.”
• This is a separate, stand-alone requirement that must be met to
satisfy the rule.
22
STATE AUTHORIZATION RULE – COMPLAINT
PROCESS
March 17, 2011 (DCL GEN-11-05):
• Regarding a State complaint process, the Department will only
recognize a delegation of responsibility for handling
complaints where the State remains the final authority, such
as through a State Attorney General’s office, or a more
specialized State entity. After considering a complaint, that
State entity may refer it to other appropriate entities for final
resolution.
23
STATE AUTHORIZATION RULE – COMPLAINT
PROCESS - CONSUMER DISCLOSURE
• 668.43(a) – Added in Final Rule “The institution must provide its students or prospective students with
contact information for filing complaints with its accreditor AND with its
State approval or licensing entity AND any other relevant State official or
agency that would appropriately handle a student’s complaint.”
• DCL GEN 12-13 states that: the information may be provided on
school website if prominent and accurate, you may use a link to a 3rd
party list or site that contains the information, and that all students
taking any course or program from the institution must be provided
with the State agency that would handle complaints for that student,
including the State agency information applicable to students taking
a portion of their program from an institution located in another
State.
24
IMPLEMENTATION TIMELINE – STATE
AUTHORIZATION RULE
October 29, 2010 Final Rule (75 Fed. Reg. 66863):
An institution’s State authorization must meet requirements of rule by
July 1, 2011 but recognizes a State may not be able to provide
appropriate State authorizations by that date. For institutions unable
to comply by July 1, 2011, the Department permitted a one-year
extension until July 1, 2012 and a second extension until July 1,
2013, where necessary. “To receive an extension of the effective date
of the rule for institutions in a State, an institution must obtain from
the State an explanation of how a one-year (and second year)
extension will permit the State to modify its procedures to comply with
amended 600.9.
25
IMPLEMENTATION TIMELINE – STATE
AUTHORIZATION RULE
•
•
August 22, 2011 (ED electronic announcement): Describes the steps required to
obtain a one year extension to July 1, 2012 and, if necessary, second extension
until July 1, 2013 to comply with the rule:
Institution must obtain from the State a written explanation of how the one-year
extension will permit the State to modify its procedures so that the institution is
able to comply with the rule. The explanation may apply to multiple institutions in
a State. If the institution needs a subsequent one-year extension until July 1,
2013, the institution must obtain a further written explanation of how the
additional one-year will permit the State to modify its procedures so that the
institution can comply.
Institutions should obtain and maintain this documentation without the
involvement of the Department as an intermediary and should have it on hand if
the Department asks for it.
26
IMPLEMENTATION TIMELINE – STATE
AUTHORIZATION RULE
January 23, 2013 (DCL GEN 13-04) – The Department reminded institutions
of their obligation to comply by July 1, 2013. Language addressed States’
need to work with licensed institutions to meet the requirements of the rule.
May 21, 2013 (78 Fed. Reg. 29652) – Provides for an additional one-year
delay, until July 1, 2014, in implementation if an institution can demonstrate
that the extension will allow it to come into compliance with the regulation by
July 1, 2014. The institution is required to obtain an explanation from the
State regarding “how an additional one-year extension will permit the State
to modify its procedures to comply” and the institution must have that
document on file to provide to Department staff upon request.
27
IMPLEMENTATION - ENFORCEMENT
• Title IV Certification
• Title IV Re-Certification
• Program Review
• OIG Audit
• Change of Ownership
• Accreditation Reviews – 34 CFR 602.28(a)
• Complaints to ED or copied to ED
28
IMPLEMENTATION - ENFORCEMENT
• Students/Public – 34 CFR 668.43(b) – State authorization
documents must be made available to students and
prospective students for review. Misrepresentation rule
requires truth and accuracy.
• Professional Licensure: Must be vigilant as to State
requirements for institutional authorization for professional
licensure in the State.
• Gainful Employment Program Certifications (NPRM version)
- must certify that program meets all State licensing
requirements (State program approval may be necessary)
29
CONSEQUENCES
STATE
•
If a State refuses to act to come into compliance with the rule, students attending
affected postsecondary institutions in the State will not be eligible for Title IV funds.
•
Agency action via cease/desist letter – stop enrollments, advertising, etc.
•
Graduate professional licensing issues if institution is deemed out of compliance with
State law
•
Unfair/deceptive practices – advertising in State
FEDERAL
•
Department of Education – Institutional Eligibility determination
• Liability for Title IV funds disbursed during time that institution was ineligible due to
faulty State authorization
30
ONGOING STATE AUTHORIZATION RULEMAKING
Meetings Held:
Session 1: Session 1: February 19-21, 2014
Session 2: March 26-28, 2014
Session 3: April 23-25, 2014
Session 4: May 19-20, 2014 -- ADDED **
Next Steps:
After negotiations are concluded, a Notice of Proposed Rulemaking will be
published announcing an open public comment period before a Final Rule is
published.
If Final Rule published by November 2014, a July 1, 2015 effective date is
possible.
31
ONGOING STATE AUTHORIZATION RULEMAKING
Scope of Discussions:
1. Revising vacated 600.9(c) regarding
requirement for State authorization for
institutions providing distance education or
correspondence courses to students in
another State.
2. Authorization of Foreign Locations of U.S.
institutions.
32
STATE AUTHORIZATION RULEMAKING – AS OF
APRIL 2014 MEETING
600.9(c)(1)(i)(A)(1) - Legal authorization for an
institution that offers or will offer 50% or more of a
postsecondary program through distance or
correspondence education to students in that State
must be based on the following:
• The State has a process to review and
appropriately act in a timely manner on
complaints concerning the institution, including
enforcing applicable State law, and has final
authority to resolve complaints and enforce
applicable law; AND
33
STATE AUTHORIZATION RULEMAKING – AS OF
APRIL 2014 MEETING
600.9(c)(1)(i)(A)(2) - The institution meets State
requirements that it be approved or licensed by name –
(i) By the State to offer postsecondary distance or
correspondence education, including programs leading
to a degree or certificate, in that State; OR
(ii) To offer postsecondary distance or correspondence
education, including programs leading to a degree or
certificate, in that State under a State-to-State
agreement administered by the participating States, OR
34
STATE AUTHORIZATION RULEMAKING – AS OF
APRIL 2014 MEETING
600.9(c)(1)(i)(A)(2) The institution meets State
requirements that it be approved or licensed by
name –
(iii) To offer postsecondary distance or
correspondence education, including programs
leading to a degree or certificate, by a State that
approves and annually reviews the administration of
a State authorization reciprocity agreement
administered by a non-State entity.
35
STATE AUTHORIZATION RULEMAKING – AS OF
APRIL 2014 MEETING
600.9(c)(8)(i) – An institution is not considered legally authorized to offer distance
education for Title IV purposes if it is exempt from State approval or licensure
requirements solely based on accreditation, years in operation, or other comparable
exemption. EXCEPT -•
State is not considered to have exempted the institution under this section if the
State has an active process that examines the institution and its programs [last
draft removes specific criteria that the agency must review]
•
Grandfather clause for currently exempt institutions for Title IV purposes for
students enrolled on or before June 30, 2018 in an eligible distance or
correspondence program, for the duration of the student’s program.
•
One year additional extension possible if school can present evidence the State
has initiated but not completed the process of replacing the exemption with an
“active” process or the school’s application remains pending.
36
STATE AUTHORIZATION RULEMAKING – AS OF
APRIL 2014 MEETING
600.9(c)(1)(i)(B) – The requirements in
paragraph (c)(1)(i)(A)(2) are deemed satisfied if
an institution’s total enrollment of students who
have commenced attendance in distance or
correspondence education in a State does not
exceed 30 students during the prior award year,
excluding any member of the armed forces (or
spouse or dependent child) who receive Title IV
under 600.9(c)(11).
37
STATE AUTHORIZATION RULEMAKING – AS OF
APRIL 2014 MEETING
600.9(c)(1)(ii) – Notwithstanding paragraph (c)(1)(i) of
this section, the institution meets the additional
requirements for legal authorization in that State as the
State may establish.
600.9(c)(2) – Institution under (1) must meet consumer
complaint process disclosure requirements under
668.43(b) [current law]
600.9(c)(3) – Institutions providing 100% distance
education must demonstrate they are legally authorized
in their home State (principal office) and must provide
Secretary documentation of State authorization if it
moves its home State.
38
STATE AUTHORIZATION RULEMAKING – AS OF
APRIL 2014 MEETING
600.9(c)(5) – An institution with legal authorization
under applicable provisions of 600.9(c) is
considered legally authorized to provide Title IV
funds to a student located in a foreign country.
600.9(c)(6) – If a State offers approval for distance
education programs on a program-specific basis, the
institution is legally authorized to provide funding to
students in that State who are enrolled in that
program only.
39
STATE AUTHORIZATION RULEMAKING – AS OF
APRIL 2014 MEETING
600.9(c)(12), (13), (14) – Contains notice
requirements to students (including prominent
posting on website) when an institution loses its
State authorization to offer distance education
or under certain circumstances when a State
within a reciprocity agreement withdraws from
that agreement or the organization overseeing
reciprocity terminates.
40
STATE AUTHORIZATION RULEMAKING – AS OF
APRIL 2014 MEETING
600.9(d) – Institution not considered legally
authorized for programs in a State if those
programs do not meet the educational,
programmatic or institutional accreditation
requirements for graduates of those programs to
receive certification or sit for the licensure or
certification exams required in the State in the
occupation for which the program is intended to
prepare a student UNLESS
41
STATE AUTHORIZATION RULEMAKING – AS OF
APRIL 2014 MEETING
UNLESS the institution obtains written acknowledgment
from each student in that State before enrollment that
graduation from the program –
(i) Will not fulfill educational, programmatic or
institutional accreditation requirements to receive
certification or to sit for the licensure or certification
examinations in that State AND
(ii) That additional coursework, field experience, or
other academic requirements must be completed to
fulfill the requirements to receive certification, or to
sit for the licensure or certification examinations in
that State.
42
THE RISE OF THE STATE AUTHORIZATION
RECIPROCITY AGREEMENT (SARA)
How it works:
• Home State of institution maintains primary jurisdiction.
• Participating States agree to uniform definitions of physical
presence and offer reciprocity to institutions in other SARA States
to allow them to advertise, offer distance education courses and
programs, employ faculty and other employees in the State,
conduct proctored exams in the State, offer externships and
engage in other activities under a set of uniform rules.
• The purpose is to promote predictability and uniformity of State
law and, ideally, reduce cost of compliance.
43
THE RISE OF THE STATE AUTHORIZATION
RECIPROCITY AGREEMENT (SARA)
•
•
•
•
The uniform standards are developed and managed by regional
compact organizations coordinated with a national board.
Legislation will need to be passed by many of the States that join
SARA to bring State statutes into line with uniform standards.
Some SARA States are still requiring filing of documents and, in
some States, assessing significant application fees.
Specialized professional licensure issues are still being worked out.
However, institutions cannot establish an office or location in a SARA State
without proper State approval outside the scope of SARA.
44
REGIONAL SARA ORGANIZATIONS
• Western Interstate Commission for Higher Education
(WICHE) – www.wiche.edu
• Midwestern Higher Education Compact (MHEC) –
www.mhec.org
• New England Board of Higher Education (NEBHE) –
www.nebhe.org
• Southern Regional Education Board (SREB) –
www.sreb.org
45
STATE AUTHORIZATION RECIPROCITY
AGREEMENT
Eligible Institutions:
• Nationally or Regionally Accredited
• Degree-granting
• Public, non-profit or for-profit
• Offering distance education and
• Located in a State participating in SARA
46
STATE AUTHORIZATION RECIPROCITY
AGREEMENT
March 2013 WICHE Cooperative for Educational Technologies (WCET) report finds
among institutions surveyed that:
•
Most are participating in a State-wide, system-wide, or consortium approach to
share information to come into compliance with State authorization rules, but only
13% were participating so far in a reciprocal agreement with another State.
•
One third are choosing not to apply to every State for authorization and deciding
not to enroll students from some States based on cost: AR, AL, MD, MA, MN, KS
and WI are increasingly avoided.
•
Reasons for waiting to apply to any State for authorization is based on cost, lack of
staff, not a priority , awaiting further clarification from State or Department of
Education, or relying on an existing State exemption.
47
STATE BASES FOR ASSERTING JURISDICTION
State license or exemption requirement based on --
•
Physical presence- most States still rely on this traditional basis for asserting
jurisdiction which can mean under State law -• Local physical or mailing address, telephone or fax, or call center
• Advertising in the State targeted to State residents
• Faculty meets with students in the State or deliver course from State
• Credit bearing externships/clinics offered in the State
• Recruiting, including State licensed recruiters in the State
• Offering credit through courses or programs to State residents
• Often case by case, need State guidance.
48
STATE ASSERTION OF JURISDICTION
• A degree-granting Institution is 100% on-line (including AK, AL,
AR, IA, IL, ND, MD, MN, MT, OR, UT, WI, WY)
• Programs as well as institution may need to be authorized
• Some States require institutions to file as a foreign corporation
as part of the State authorization process including: AL, DC, IA,
KY, MD, MT, NC and WA
* Some of these States also require surety bonding in connection
with the foreign corporation filings.
49
GE II NPRM - CERTIFICATION
668.403(a) and 668.414 - An institution must establish the eligibility of a GE program
through:
● Certification In Good Faith and After Appropriate Due Diligence
→For Each Program Through PPA
→By Institution’s Most Senior Executive Officer
● That a GE Program is included in the Institution’s Accreditation (or for public
vocational institutions is approved by a recognized State agency), and
● That a GE Program satisfies any applicable State or Federal program-level Accrediting
or Licensing requirements for the occupations for which the program prepares the
student (for each State in which institution is located or any State within the institution’s
Metropolitan Statistical Area)
50
QUESTIONS
1.
What is the strategy for using the State Attorney General for the complaint process in a
State? According to available guidance, the AGs office can serve this purpose so long as
there is a process in place to accept, review and act on postsecondary education and State
law is enforced. The AG process can refer matters to other State agencies for final resolution,
so long as there is a meaningful initial review of the complaint by the AGs office;
2.
How do institutions handle State authorization requirements for out-of-State clinical
placements, such as for nursing students where the student earns credit in that State? Case
by case. Need to check with State.
3.
What if our school only has a few students in one State? Even one requires appropriate State
authorization (but pending Neg Reg on distance education may included a minimum student
trigger)
4.
Is State authorization required for locations where an institution offers less than 50 percent
of a program? No – but State law may require approval for these sites even if the federal rule
does not. (DCL GEN-12-13 – Q4/A4)
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QUESTIONS
5.
6.
7.
What happens if CA BPPE legislation sunsets again? One of the
purposes provided by ED for the State authorization rule is to
prevent States from allowing this situation to re-occur. Presumably,
the threat of a cut off of Title IV aid to students in the State will be
the necessary incentive for the CA legislature to act to avoid any
interruption in agency oversight.
What types of penalties to States impose for not being authorized?
Cease and desist letters have been sent. Fines possible. Depends
on State statutory penalties.
Which States are currently not in compliance and have not
contacted ED for resolution? There is an absence of
communication between States and ED – institutions must
facilitate the answer.
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PETER LEYTON
Peter is co-founder of the Washington, D.C. area law firm of
Ritzert & Leyton, P.C. and head of the firm’s education practice
group. Since 1980, Peter has represented many institutions of
higher education, publicly traded companies, private
investment groups and others with respect to resolving
regulatory/compliance matters as well as with respect to
achieving desired transactional results through mergers,
acquisitions and reorganizations. The firm has eight attorneys
involved in work involving the postsecondary education sector
and is regularly involved with the U.S. Department of Education
(DOE), national, regional and programmatic accrediting
agencies, state licensing and other regulatory agencies and
other third parties. Peter has served three two-year terms on
the Association of Private Sector Colleges and Universities and
predecessor board of directors. He received his law degree
from Catholic University School of Law in 1980, a master's
degree in public administration from American University in
1974, and a bachelor's degree in political science from Antioch
College in 1971.
Ritzert & Leyton, P.C., 11350 Random Hills Road, Suite 400,
Fairfax, Virginia 22030; pleyton@ritzert-leyton.com; (703) 9342660
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KATHERINE BRODIE
 Ms. Brodie serves as Counsel in Ritzert
& Leyton, PC’s Postsecondary
Education Practice Group. She advises
postsecondary institutions and their
partners regarding a wide range of
issues related to compliance with
federal, state and accrediting body
regulations and standards impacting
school operations, including the
regulations governing Title IV student
financial aid programs administered
by the U.S. Department of Education.
 kbrodie@ritzert-leyton.com
O: (703) 934-9829
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CONTACT INFORMATION
Peter S. Leyton
Ritzert & Leyton, PC
Phone: 703-934-9826 (direct)
Email: PLeyton@ritzert-leyton.com
Website: www.ritzert-leyton.com
Jenny Faubert
Career Education Review
Phone: 920-264-0199
Email: jfaubert@careereducationreview.net
Website: www.careereducationreview.net
Katherine D. Brodie, Esq.
Ritzert & Leyton, PC
Phone: (703) 934-9829
Email: kbrodie@ritzert-leyton.com
Website: www.ritzert-leyton.com
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