Final Regulations for State Authorization

Posted Date: December 19, 2016

Author: Gail McLarnon, Acting Deputy Assistant Secretary for Planning, Policy, and Innovation

Subject: Final Regulations for State Authorization

Today, December 19, 2016, the Department published in the Federal Register final regulations (PDF copy attached) to improve oversight and protect students at degree granting institutions.  These regulations clarify the State authorization requirements for postsecondary distance education and State authorization requirements for branch campuses and additional locations in foreign locations. State authorization requires institutions to be authorized in the State in which they are located as a condition for eligibility to receive Title IV aid. Prior to the publication of these new regulations there were no regulations for distance education in circumstances where the institution enrolls distance education students who are not located in the institution’s home state.  These final regulations will become effective July 1, 2018.

The final regulations strengthen State authorization requirements in several ways, including:

  • Multiple Routes to State Authorization for Distance Education:  The final regulations require institutions offering distance education or correspondence courses to be authorized by each State in which the institution enrolls students, if such authorization is required by the State. The regulation recognizes authorization through a state’s participation in a State authorization reciprocity agreement, as long as the agreement does not prevent a state from enforcing its own laws.
  • State Complaint Process Documentation:  The final regulations require institutions to document the state process for resolving student complaints regarding distance education or correspondence courses in States in which the institution enrolls students.
  • Disclosure Requirements:  The final regulations mandate certain public and individualized disclosures to enrolled and prospective students in distance education or correspondence courses, including the disclosure of adverse actions taken against the institution, the institution’s refund policies, and whether each program meets applicable state licensure or certification requirements.  The regulation also requires institutions’ to explain to students the consequences of the student moving to a state where the institution is not authorized, which could include loss of eligibility for federal student aid.
  • Branch Campuses or Additional Locations in a Foreign Location Authorization:  The final regulations make clear that foreign branch campuses or additional locations be authorized by the appropriate foreign government agency and, if at least half of a program can be completed at the foreign location or branch campus, be approved by the accrediting agency and reported to the state where the main campus is located.

Attachments/Enclosures:

Federal Register: State Authorization Final Regulations in PDF Format, 337KB, 32 Pages

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