Some online colleges said they would withdraw from small states if state authorization rules were implemented.

The U.S. Court of Appeals on June 5 sided with an earlier court ruling that would eliminate a federal regulation that higher-education officials characterized as heavy handed and a potentially devastating blow for online learning.

The court’s decision to “vacate” state authorization rules—which would require colleges with online programs to register courses in every state in which they operate—followed a 2011 U.S. District Court decision to strike down the law.

Eliminating the distance-education portion of the state authorization regulation was based purely on procedural grounds: The appeals court charged that the U.S. Department of Education (ED) did not comply with a federal rulemaking process that would provide the online community the chance to add comments and suggestions before implementation of the regulation.

Failure to abide by state authorization rules would have cut off federal aid to noncompliant colleges.

Michael Goldstein from the Washington, D.C.-based law firm Dow Lohnes, wrote in a blog post that the court ruling does not eliminate states’ existing rules for colleges and universities that operate within their borders.

The ruling does, however, keep the federal government from enforcing state authorization rules and tying compliance of those rules to federal aid for colleges.

“It is … clear that the department did not anticipate such a strong pushback on this rule from across the higher education spectrum: virtually every higher education association joined in support of blocking the distance learning authorization rule,” Goldstein wrote.

The appeals court decision won’t change some schools’ approach to abiding by state rules.

Pamela Shay, vice president of accreditation at Franklin University in Ohio, said her school would continue to comply with sometimes-stringent state rules even after the court’s decision.

“We want to make sure we are in compliance with various states, and we want to be very transparent in what we do,” she said. “We’ve squeezed the toothpaste and now it’s hard to get it back in the tube. States know now that colleges were not following their requirements, so I think [the state authorization rule’s] purpose may have already been served by just bringing awareness to the situation.”

Goldstein said the online education community’s collective resistance showed that the “the hornets’ nest of state regulation has been forcefully kicked.”

Web-based college programs are in the clear, he wrote, but should continue to pursue a reciprocity agreement that would meet state authorization standards without the state-by-state fluctuations in how the complex rules are enforced, and how much money a school must spend to meet those standards for each state.


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