State Authorizations Tied to Distance Education Funding

The recent hot button concerning Title IV student financial aid funding and distance learning is causing higher education institutions to sit up and take note.  The regulation states “If an institution is offering postsecondary education through distance or correspondence education to students in a state in which it is not physically located, the institution must meet any State requirements for it to be legally offering postsecondary distance or correspondence education in that State.  We are further providing that an institution must be able to document upon request by the Department that it has the applicable State approval.” – Oct. 29, 2010 Amendments to the Higher Education Act Program Integrity Issues, State Authorization, Section § 600.9.

Riddled with controversy, the regulation effective July 1, 2014, is requiring schools to obtain state approval from every state in which an institution has out-of-state distance learning students who receive federally-funded financial aid.  Some suggest this may cause schools to withhold education to some out-of-state online learners to avoid having to deal with these issues.

A time-consuming and expensive endeavor, heads are spinning as schools begin to acknowledge the magnitude of the requirement.  For smaller community colleges that serve a tri-state area it may be less time-consuming but many times those schools have limited personnel and resources to complete tasks associated with new regulations.  Next in line are the larger universities that may serve distance students spanning many states and in some cases other countries. This will require a lot of leg work and continued follow up as new students from other states are added.

As this news hit the fan a few months ago, I was in San Antonio, TX at the TxDLA conference.  I had a chat with a distance learning administrator (who shall remain anonymous) from a local community college who was absolutely outraged about the new regulation!  She spoke with passion, disgust, and anger about how the “powers that be”, as she put it, sat in their chairs in the sky and dreamt up regulations that seem impossible to abide by.  I remember walking away and thinking…the hot button has been turned on!

The new regulation was originally reported (although possibly a rumor) to be in effect as of July 1, 2011.  However, it was then announced to be in effect as of July 1, 2014, giving schools time to wrap their head around the requirements and get it done.