Issue Briefs
State Authorization
The state authorization regulations require an institution to be authorized by the state in which it has its main location, or in which it has an additional physical location offering at least half of an educational program.
“Authorization” refers to the legal authority for an institution to operate in a state. A postsecondary institution clearly meets the authorization requirement if it is named in a state charter, statute, or constitution. Other colleges face the ambiguous task of demonstrating that they are authorized by name through “other action issued by an appropriate State agency or State entity.” Although a state may choose to establish additional approval or licensure requirements, it is not required to do so by these regulations.
The regulations also require a state to have a process to review, and appropriately act on, complaints about an institution. A related portion of the program integrity regulations further requires each institution to “provide its students or prospective students with contact information for filing complaints with its accreditor and with its State approval or licensing entity and any other relevant State official or agency that would appropriately handle a student’s complaint.” Most institutions have chosen to meet this requirement by posting the information on their websites.
The original regulations also addressed the authorization of distance education programs. After years of various legal and administrative roadblocks and revisions, the final distance education regulations were issued in August 2020, and will become effective on July 1, 2021.
Compliance with the state authorization requirements is determined as part of the Department’s recertification, audit, or program review activities conducted by its regional offices. Several private, nonprofit institutions have been needlessly threatened with the loss of Title IV eligibility due to inconsistent application of the authorization requirements by regional offices.
About
The state authorization regulations were a part of a broad package of program integrity regulations issued in 2010 by the Department of Education. The intent of the regulations was to crack down on unscrupulous higher education providers.
Unfortunately, the portion of the regulations dealing with state authorization has done nothing to advance the laudable goals of the regulatory package. Instead, these provisions have created confusion about the legal status of many private, nonprofit colleges—some of which have been needlessly threatened with loss of eligibility for federal student aid dollars.
History
The state authorization provisions were included in a broader package of program integrity regulations published in 2010. The portion of the regulation dealing with distance education was struck down in federal court in 2011.
The other state authorization requirements have remained in effect, and were intended to be implemented by July 1, 2011. However, implementation was delayed several times; the requirements did not take effect until July 1, 2015.
Lawmakers have repeatedly filed legislation to prevent the Department from enforcing the state authorization regulations. Provisions to repeal the state authorization regulations were also included in the most recent House Republican proposal to reauthorize the Higher Education Act.
In 2018-19, the Department established a negotiated rulemaking committee to amend the state authorization for distance education regulations, but no changes were made to the rules governing state authorization for brick and mortar institutions.
If you run into a problem:
- Most private, nonprofit colleges have been able to demonstrate state authorization in a manner satisfactory to Department of Education regulators. However, institutions are still finding—to their surprise—that Department officials do not believe they are properly authorized by the state in which they are located. If your institution is in this situation, you should contact both Jody Feder at NAICU and your State Executive, if applicable, to request help in resolving the problem.
All members:
- Contact your Senators and Representatives to urge their support for legislation to repeal the state authorization regulations.
- Program Integrity Questions and Answers - State Authorization – US Department of Education. Contains links to all Department of Education regulations and guidance related to state authorization.
- Jody Feder: Jody@NAICU.edu
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