This analysis was prepared by Venable, LLP on behalf of AACOM.
Memorandum
Subject: Department of Education Negotiated Rulemaking – Session 2 – State Authorization and Distance Education
Date: February 6, 2024
Summary
I. State Authorization
Exemptions Phasing Out by 2030. Tuesday’s session began with negotiators discussing the Department’s updates to draft regulatory text on state authorization made after the first session in January. The updates to the regulatory text addressed state exemptions from authorization requirements based on accreditation or operational history. The new language would phase out such exemptions by 2030.
Education-Specific Laws. Negotiators discussed defining "education-specific" laws, with Federal negotiator Greg Martin noting the proposal the Department received from Carolyn Fast to allow states in reciprocity agreements to enforce their own education-specific laws. Fast highlighted negotiators’ concerns regarding only allowing states to enforce their general-purpose consumer protection laws but prohibiting them from enforcing anything else. She explained that negotiators used the term “education-specific” because many states have determined it’s important to protect students against predatory and financially unstable institutions and that general-purpose laws cannot always do that. “States are impeded in their ability to enforce those types of laws by the fact that they are prohibited from doing that with respect to out-of-state schools that are operating in their state under the current NC-SARA guidelines,” Fast said. “It's an issue of making sure that students are able to be protected, and also that there's not different standards that apply to different students enrolled in online programs.” Negotiator Robert Anderson, however, shared his concerns with creating a provision for states to enforce their own education-specific laws and institutions moving to systems outside of NC-SARA for reciprocity agreements. “My concern is in search of the perfect, you're going to blow up what has been very solid for states,” Anderson said. “And we're going to be left wondering what's next? How do you build this together?” Other negotiators were in support of creating a provision to allow states to enforce their own education-specific laws, including Emmett Blaney, who said NC-SARA has failed students when their institutions shut down abruptly. “This shows huge shortcomings of a reciprocity agreement designed to make oversight lighter for schools, rather than protecting students,” Blaney said. “I'm so strongly in favor of the language the department put forward that would allow states participating in a reciprocity agreement to enforce their laws and protect the residents from predatory practices and institutions.”
State-Led Process in Reciprocity Agreements. Negotiators explored a new provision that would require state authorization reciprocity agreements to adopt a “state-led process,” allowing participating states to propose and adopt policies of the agreement. The proposed language further specifies that a reciprocity agreement must enable any participating state to enforce its respective general-purpose state laws and regulations beyond the state’s authorization of distance education. Several negotiators, including Robyn Smith, urged the Department to create more language in this section to ensure that only state regulators are overseeing and making decisions around any kind of reciprocity agreements. Smith said state regulators are specifically trained to handle these agreements and can effectively use their regulatory powers when handling investigations.
II. Distance Education
Negotiator’s ended Tuesday’s session with a discussion of distance education, highlighting changes to the issue paper’s language that would provide more clear definitions.
Additional Location Definition. The term "additional location" was refined to signify a virtual space where an institution provides 100 percent of an educational program through distance education or correspondence courses, regardless of on-campus or residential requirements within a 90-day period.
Clock Hour Programs. The Department also removed language from the definition of "clock hour" in distance education, disallowing Title IV aid for asynchronous learning in clock hour programs. The rationale behind this change was the Department’s aim to re-establish a clear distinction between clock hour and credit hour programs, as they believed the prior allowance for asynchronous learning in clock hour programs inadvertently expanded the reach of Title IV student aid programs. This decision sparked debate among negotiators, with some advocating for the use of emerging technologies to monitor asynchronous learning and a focus on outcome measurement rather than modalities. A temperature check indicated dissent, with several negotiators entering a “thumbs down.”
Data Collection Proposals. The Department noted receiving two proposals from negotiators on collecting data from students in distance education programs, both suggesting the utilization of the National Student Loan Data System for data collection. These proposals were prompted by the fact that the department currently only has limited data on enrollment in distance education programs, since it collects such data only at the institution and program level through IPEDS.