A federal rule might force colleges to withdraw from states with small populations.

Members of an influential online-learning task force said states should create uniform standards for online colleges and universities, making it easier for institutions to comply with a federal rule that will prove costly and confusing to web-based schools.

The Education Department’s (ED) state authorization rule, scheduled to take effect July 1, would force online colleges to seek authorization from agencies in every state where their students are enrolled.

Higher-education officials have said this requirement wouldn’t just be cumbersome for online schools; it could encourage colleges to withdraw from many states, especially states with small populations.

Funded by a $300,000 grant from the Lumina Foundation for Education, officials from Excelsior College and the Council of State Governments released a white paper May 16 endorsing an “interstate reciprocity compact” that would streamline the process of getting state-by-state approval.

Agreeing to the national compact would mean a participating state agency “must be open to consider acceptance of programs in other member states, as well as having other members accept its programs,” according to the white paper.

Registering online educational programs one by one, state by state, would force institutions to hire full-time employees to research regulations and submit proper paperwork. Excelsior College President John Ebersole said college staffers recently spent about 400 hours completing applications for two programs in one state.

Among the most pressing issues about state authorization is the financial impact on out-of-state students, according to the white paper.

The online-learning task force found one state – which wasn’t named in the white paper – where tuition compensation would only go to in-state students.


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