New federal rule could have worst impact on small states

Speakers at the Presidents’ Forum cited examples of how the state authorization regulation would force online programs large and small to comply with different sets of rules in every state.

Terry Hartle, senior vice president of governmental affairs for the American Council on Education (ACE), said a community college in Illinois was told by regulators in Tennessee that it would cost the institution about $40,000 to comply with state rules.

The community college, Hartle said, has one student in Tennessee.

“That student is about to find his or herself disenfranchised,” said Hartle, whose organization joined 60 other higher-education groups in a letter asking ED Secretary Arne Duncan to rescind the state authorization regulation. “The [state authorization rule] is not an incentive to the expansion of distance education. … If this had happened 10 years ago, online education wouldn’t look anything like it does today.”

Colleges and universities have consulted with states – mostly in the western part of the country – that have little or no state regulations to comply with, said Michael Goldstein, co-leader of the law firm DowLohnes’ Higher Education Industry Practice.

“The institution is essentially required to prove a negative,” he said, adding that state regulators usually are hesitant to submit a letter admitting the state has no regulations for out-of-state colleges because the document would effectively cede the state’s authority.

Goldstein, who did not identify states while criticizing their policies, said one state has two agencies that handle colleges’ paperwork required to certify programs within that state. The redundancy, he said, is complicated by the varying standards each of the agencies enforces.

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