Department of Education proposes new rules for schools providing online courses

Consumers Union urges DOE to strengthen proposal by requiring programs to be accredited in all states where they are marketed.

The Department of Education proposed new rules today for schools providing distance education, such as online courses, in order to get the state authorization needed to qualify for federal financial aid dollars.

The proposal will help ensure students get a quality education and that taxpayer dollars aren’t wasted on schools that fail to deliver, according to Consumers Union, the policy and advocacy division of Consumer Reports.

“Online courses have become an increasingly popular option for students seeking a higher education, especially for vocational training” said Suzanne Martindale, staff attorney for Consumers Union, who participated in the Department of Education’s negotiated rulemaking process which led to the proposed reforms. “Today’s proposal represents an important step towards creating baseline federal standards for distance education programs that will help protect students from poor quality schools that do little more than burden them with debt.”

Under the proposal announced today, the Department would require a school offering distance education programs to get authorization in each state where it wants to market its programs to students. It also requires any reciprocity agreement between states to leave room for states to enforce their own consumer protection laws.

However, the rule stops short of requiring schools offering distance education programs to obtain programmatic accreditation in all states where they want to do business. The rule requires disclosures, and an “acknowledgement” from the student that they received the disclosure, but in practice the disclosure could be buried in an enrollment contract. This means that students could sign up for programs with little actual notice that it won’t make them eligible to sit for an exam to obtain a professional credential, such as a nurse’s license, in their home state.

“Some for-profit career colleges have a history of enrolling students in online courses that mire them in debt without providing the education they need to get a license in the state where they live,” said Martindale. “The Department of Education should strengthen its proposal by requiring accreditation for all specific programs offered to ensure students aren’t pushed into signing up for programs that won’t meet their needs.”

In addition, the proposed rule doesn’t give a student’s home state clear and final authority to resolve complaints. It lets the reciprocity agreement determine which state has authority to resolve complaints, which could undercut states with stronger consumer protections. Consumers Union called on the Department to make clear that a student’s home state always has final authority to resolve complaints, as well as generally apply their consumer protection laws.

Material from a press release was used in this report.

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