ED sticks by controversial rule; online college officials concerned

ED's regulation could shrink online education, officials say.

The Education Department (ED) said in a March 17 letter that it would not rescind a controversial new rule requiring online schools that operate nationwide to register with every state in which they have students.

Educators and ed-tech officials said the regulation—known as the state-authorization rule—will mandate the burdensome task of state-by-state certification, imposing a financial strain on web-based colleges that could be passed down to students.

The federal rule, unveiled in October, was scheduled to go into effect July 1. ED officials would now be satisfied with a “good-faith effort” from colleges and universities.

ED said in its letter that online colleges must prove they are working toward certification in every state in which they operate by July 1 after many in higher education said it wouldn’t be possible to meet the deadline for state-by-state registration.

ED’s open letter was in response to a March 2 request from 60 higher-education organizations asking federal officials to rescind the rule before its implementation date.

While the “good-faith effort” provision was a welcomed relief for many online colleges, campuses will still have to head the massive undertaking of registering in all 50 states.

“Indeed, it is a delay in the enforcement and lessens the burden on [ED] over the coming … year,” said Russell Poulin, deputy director of WICHE Cooperative for Educational Technologies (WCET), an organization that advocates for online instruction. “For the institutions, it is not a delay.”

Poulin said colleges are still left with the “monumental burden” of identifying where their web-based students are located, deciphering the often unclear state regulations, and deciding if they need to apply to each state.

Complicating the federal requirement is ED’s mandate to register every online program in every state. In other words, the same school might have to seek registration for its nursing, computer science, and business programs in the same state.

John Ebersole, president of New York-based Excelsior College, said during a House Education and Workforce Committee hearing March 10 that Excelsior staffers recently spent about 400 hours completing applications for two programs in one state.

“It really is mountains of paperwork that they’re going to have to fill out,” Poulin said.

Robert Larson, director of the North Dakota University System’s (NDUS) online education program, said that if compliance with the state-authorization rule proves too pricey, NDUS might cease its online courses out of state.

That would mean NDUS would operate without tuition from about 5,000 out-of-state web-based students.

“To not have those students enrolled in our schools, would we survive? Probably,” he said. “Would it be as good? No.”

A well-known expert on education regulation wrote a March 15 blog post that reaction to the state-authorization rule was overblown.

Alan Contreras, head of the Oregon Office of Degree Authorization, pointed out that the recent ED decision didn’t create any new regulations.

“The rule didn’t create [state authorization], but merely called attention to it — which is a good thing,” he wrote in a blog from New America Foundation, a nonprofit group that advocates for major shifts in U.S. educational policy.

Contreras said he recently fielded a call from an institution “appalled that it might have to contact multiple states.” Contreras’s advice for the online program: “Get over it — you operate in multiple states, don’t you? Welcome to the internet age!”

“These schools have now awakened to find forty-nine wide-awake horses in their beds and no farriers on staff,” he wrote.

Schools won’t be federally mandated to get permission from states that do not have regulations for out-of-state institutions, according to ED’s letter.

The state-authorization regulation would not apply to colleges that run programs that only require online classes. But if a school requires occasional live, proctored tests on physical campuses, the school would have to comply with the rule.

Officials who have tracked ED’s state-authorization rule said the regulation would have most impact on nonprofit, public institutions that run web-based courses attended by students across the country.

For-profit schools such as Kaplan University or the University of Phoenix obtained certification from states years ago, so ED’s rule won’t affect them.

Colleges and universities recently detailed the procedures and costs necessary for schools to comply with the state-authorization rule.

Wyoming University (WU), for example, sometimes does not have enough in-state students to make a distance education course “financially viable.” Many of those courses would be eliminated if the university couldn’t enroll out-of-state students to fill available seats in the virtual classroom.

“We can’t offer many classes that lose money—thus the need in some programs for out-of-state enrollments,” WU said in a report published by WCET.

An analysis conducted by Minnesota State College and Universities showed that it would cost about $5.5 million for 32 Minnesota campuses to seek approval in 49 states.

And Connecticut’s Charter Oak State College, a small school beset by recent state funding cuts, projected that it would not afford to operate outside of Connecticut if forced to comply with the state-authorization rule.

The 40 percent of Charter Oak students take online courses outside Connecticut would no longer be served by the school, according to the WCET report.

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