This past July, the U.S. Department of Education proposed new regulations to ensure that institutions offering distance education are legally authorized and monitored in accordance with individual state regulations. The proposed regulations clarify state authorization requirements for institutions participating in federal student aid programs and also address state and federal oversight of U.S. postsecondary institutions operating in foreign locations worldwide.
Currently, every U.S. state has a designated governmental agency which oversees the authorization of postsecondary institutions operating within their state. “Operating” is a term that is defined differently by many states and typically means having a physical presence (brick-and-mortar building) within the state. The Higher Education Act requires postsecondary institutions to be authorized in states where they have a physical presence (as that term is defined by each state’s statutes). However, there are no federal regulations to date that require distance education providers to obtain authorization in states where they do not have a physical presence. The newly proposed federal regulations would close this loophole.
The Office of Online Education coordinates both state and federal compliance for the delivery of online education to students residing outside of Indiana. The responses to the proposed regulations from the D.O.E. are outlined below.
- Regulation: Require institutions offering distance education or correspondence courses to be authorized by each state in which the institution enrolls students.
On behalf of all seven of IU's campuses, OOE has secured authorization to deliver online education to residents of 49 states, as well as the District of Columbia. The authorizations are negotiated either directly with each state's authorizing body, or through IU’s membership in the National Council for State Authorization Reciprocity Agreement (SARA), which currently includes 45 participating states. The remaining state, New York, began the process of joining SARA in 2015 and since that time, has suspended accepting institutional applications. IU may continue to enroll students from New York in its online programs pending New York's final acceptance into SARA.
- Regulation: Require institutions to document the state process for resolving student complaints related to distance education programs.
Indiana University is in compliance with this regulation through OOE’s management of student complaints as articulated on the IU Online website.
- Regulation: Require public and individualized disclosures to enrolled and prospective students regarding programs that lead to professional licensure.
OOE is concerned about the scope of this proposed regulation. While OOE ensures that general disclosures regarding professional licensure are provided to students, the proposed regulations would require far more onerous responsibilities, including extensive public and individual disclosures to both prospective and current students for all programs leading to licensure in a student's state of residence. Upon the recommendation of OOE, and in collaboration with the assistant vice president for government relations, university academic affairs, and the vice president and general counsel, IU provided a comment letter regarding this new regulation to the Department of Education in August 2016.
- Regulation: Require that foreign branch campuses or locations be authorized by the appropriate foreign government agency; and, if at least half of a program can be completed at the foreign location or branch campus, it must be approved by the accrediting agency and reported to the state where the main campus is located.
Again, the breadth of this requirement is a major concern for OOE. Currently, 4 percent of IU's online students enroll in online programs from outside the U.S.; however, several IU programs have identified international markets as potential areas for enrollment growth. OOE completed an initial international compliance risk assessment in April 2016. This assessment included a review of foreign export controls and screening processes, ensuring data security and data privacy for online students, and investigating potential foreign tax liabilities. The office is currently reviewing existing IU partnerships with foreign entities, and investigating regulations for marketing its online programs to students residing outside of the U.S. However, if these regulations take effect, the magnitude of compliance work will increase significantly in order to enroll students from outside the U.S. Upon the recommendation of OOE, and in collaboration with the assistant vice president for government relations, university academic affairs, and university counsel, IU provided a comment letter regarding this new regulation to the Department of Education in August 2016.
A copy of the comment letter submitted by IU regarding these regulations can be found here.