As regulations loom, a call for cooperation between states

“In that situation, students in other states taking online classes would have no remedy should the college or university close,” the paper said, adding that “unplanned closures are very rare at degree-granting colleges.”

The task force warned of state agencies charging exorbitant fees for colleges and universities to register their programs in that state.

Raising authorization fees could be especially tempting in tough economic times, said Paul Shiffman, assistant vice president for strategic and governmental relations and executive director of the Presidents’ Forum, a group that provides annual assessments of online learning.

“When the states are strapped for finances, and they recognize they have a brand new revenue stream available, they’re going to jump on the bandwagon, and we’re fearful of that,” Shiffman said.

Repeating concerns expressed at a March meeting with online officials in Washington, D.C., Shiffman said onerous state rules could be an incentive for online schools to leave states with small populations, where only a handful of students might be enrolled.

“Why would a college, for one student, want to pay fees and go through the whole review process” if those fees will be equal to or more than the student’s tuition, he said. “[Online programs] will only go to the places where they have the best chance to recoup their investment.”

Surveys conducted by the task force show that states interested in entering the proposed compact assume there will be a “base” state “responsible for conducting a complete evaluation of participating colleges.”

Having a home state for state authorization rules would simplify the complex process, “rather than having twenty states engage in a game of ‘who’s on first’ trying to figure out where the full-scale review was done,” according to the white paper.

ED officials have backed off strict interpretation of the state authorization rule since it was first made public last October. When a group of 60 higher-education organizations sent a letter to ED asking the department to rescind the rule, ED responded with a rebuke, but added that federal officials would be satisfied with a “good-faith effort” from colleges and universities by the July 1 deadline.

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