Issue Briefs
State Authorization
In order to receive federal funding under the Higher Education Act (HEA), institutions of higher education must be authorized by the states in which they operate.
Under current regulations, a postsecondary institution is deemed to meet the state authorization requirement if it qualifies under one of the following exceptions: 1) it is named in a state charter, statute, or constitution; and 2) state law provides an exemption to institutions based on the institution being in operation for at least 20 years. Alternatively, colleges can demonstrate that they are authorized through "other action issued by an appropriate State agency or State entity."
The regulations also require a state to have a process to review, and appropriately act on, complaints about an institution. Most institutions have chosen to meet this requirement by posting the information on their websites.
State authorization should not be confused with the totally separate and distinct concept of state oversight or consumer protection. Although a state may choose to establish additional approval or licensure requirements, it is not required to do so by the federal regulations. In addition, basic state authorization should not be confused with state authorization of distance education programs via reciprocity agreements, whare was also addressed by the 2010 regulations.
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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