Colleges Get More Time to Comply With New Rule on State Authorization

April 20, 2011

Under heavy pressure from distance-education providers, the Education Department has agreed to give colleges three years to come into compliance with its controversial "state authorization" rule.

The new rule, which takes effect July 1, reminds colleges that enroll students through online and distance-education programs that they must seek state approval if the state requires it. Colleges that fail to do so may lose their eligibility to award federal student aid to that states' students.

Though the approval requirement is not new, many colleges have sought state authorization for their bricks-and-mortar institutions only. The new rule has left many institutions scrambling to meet a patchwork of state requirements by the deadline.

To give states and distance-education programs "some breathing room," the department will give colleges until July 1, 2014, to obtain all necessary state approvals, so long as they are making a "good faith effort" to do so before then, an administration official told reporters on Wednesday. Evidence of such an effort could include an application to a state or documentation from a state that an application is pending, among other actions.

"The department recognizes the value of distance education," said Eduardo M. Ochoa, assistant secretary for postsecondary education, in a "Dear Colleague" letter sent on Wednesday. "We are eager to help create an environment that allows innovative approaches to flourish and grow."

In the letter, Mr. Ochoa says the department will work with colleges and other groups to develop a directory of state laws and standardize state requirements.

The extension was welcomed by colleges, which have warned that the rule could make it difficult for them to offer distance-education programs across states. Last month, a group of 60 higher-education associations sent a letter to the department urging it to rescind the rule.

"What we need is a multistate compact or model law," said M. Peter McPherson, president of the Association of Public and Land-Grant Universities. "This gives us a little time to work together to find out a better way to do this."

The department also released a letter on Wednesday that offered guidance to colleges on how to comply with new "gainful employment" reporting requirements.