UNITED STATES DEPARTMENT OF EDUCATION

OFFICE OF POSTSECONDARY EDUCATION

Issue Paper 2: State Authorization

Session 3: March 4-7, 2024

Issue: Complaint System and Governance in State Authorization

Statutory cites: § 101(a) of the Higher Education Act of 1965, as amended (HEA)

Regulatory cites: 34 CFR 600.2 and 600.9

Proposed Regulations Redline:

§ 600.2 Definitions.

State authorization reciprocity agreement: An agreement between two or more States that authorizes 

an institution located and legally authorized in a State covered by the agreement to provide 

postsecondary education through distance education or correspondence courses to students located in 

other States covered by the agreement. and cannot prohibit any member State of the agreement from 

enforcing its own general-purpose State laws and regulations outside of the State authorization of 

distance education. [Moved to 600.9(d)(1)(ii)(2)(i)] If a State authorization reciprocity agreement is 

administered by an organization, the governing body of such organization must consist solely of 

representatives from States, including regulatory bodies, enforcement agencies, and attorneys general

offices., and licensing bodies, and members of the general public. Public members must be separate

from and independent of States, institutions, and accrediting agencies, and must not be:

(1) A current or former employee of, member of the governing board, owner, or shareholder of, or 

consultant to, an institution or program that is subject to the State authorization reciprocity agreement;

(2) A current or former member of any trade association or membership organization related to, 

affiliated with, or associated with an institution or program that is subject to the State authorization 

reciprocity agreement; 

(3) A current or former employee of or consultant to an accrediting agency that accredits an 

institution or program that is subject to the State authorization reciprocity agreement; or

(4) A current or former employee or member of the program integrity triad other than States 

including the Department of Education and accrediting agencies); [Edited and Moved to 600.9(d)(2)(3)]

§ 600.9 State authorization.

(a) 

Commented [A1]: Note: Changes made from session 2 are 

indicated with yellow highlighting.

Commented [A2R1]: Changes made in real time during 

session 3 are indicated with blue highlighting.
State Authorization 2

(1) An institution described under §§ 600.4, 600.5, and 600.6 is legally authorized by a State if 

the State:

(i) Ensures the institution complies with any applicable State authorization or licensure 

requirements, except as described in subsection (3) of this section, and continues to meet a 

State’s general-purpose or education-specific laws and regulations; and

(i) Requires the institution to comply with any applicable State authorization or licensure 

requirements and all applicable State laws and regulations, except as provided under paragraph 

(d)(2)(ii);

(ii) h Has a process to review and appropriately act on complaints concerning the institution, 

including enforcing applicable State laws. and the institution meets the provisions of paragraphs 

(a)(1)(i), (a)(1)(ii), or (b) of this section

(i) 

(A) The institution is established by name as an educational institution by a State 

through a charter, statute, constitutional provision, or other action issued by an 

appropriate State agency or State entity and is authorized to operate educational 

programs beyond secondary education, including programs leading to a degree or 

certificate. 

(B) The institution complies with any applicable State approval or licensure 

requirements, except that the State may exempt the institution from any State approval 

or licensure requirements based on the institution's accreditation by one or more 

accrediting agencies recognized by the Secretary or based upon the institution being in 

operation for at least 20 years. 

(ii) If an institution is established by a State on the basis of an authorization to conduct business 

in the State or to operate as a nonprofit charitable organization, but not established by name as 

an educational institution under paragraph (a)(1)(i) of this section, the institution—

(A) By name, must be approved or licensed by the State to offer programs beyond 

secondary education, including programs leading to a degree or certificate; and 

(B) May not be exempt from the State's approval or licensure requirements based on 

accreditation, years in operation, or other comparable exemption.

(2) The Secretary considers an institution to meet the provisions of paragraph (a)(1) of this 

section if the institution is authorized by name to offer educational programs beyond secondary 

education by—
State Authorization 3

(i) The Federal Government; or 

(ii) As defined in 25 U.S.C. 1802(2), an Indian tribe, provided that the institution is 

located on tribal lands and the tribal government has a process to review and 

appropriately act on complaints concerning an institution and enforces applicable tribal 

requirements or laws. 

(3) The institution may be exempted from requirements for initial or renewed application for 

authorization or licensure if:

(i) The institution is offering distance education in that State under a State 

authorization reciprocity agreement, as defined in § 600.2, to students in that State, but 

is not physically located in that State; 

(ii) Not later than July 1, 2030, a charter, statute, constitutional provision, or other 

action issued by an appropriate State agency or State entity establishes the institution 

by name as an educational institution and authorizes it to operate educational programs 

beyond secondary education, including programs leading to a degree or certificate; or

(iii) Not later than July 1, 2030, a State action exempts the institution based on the 

institution's accreditation by one or more accrediting agencies recognized by the 

Secretary or based on the institution being in operation for at least 20 years.

(i) the State authorizes it to operate educational programs beyond secondary education, 

including programs leading to a degree or certificate and--

(A) It is a public institution backed by the full faith and credit of the State; or 

(A)(B) a charter, statute, constitutional provision, or other action issued by an 

appropriate State agency or State entity establishes the institution by name as an 

educational institution; and authorizes it to operate educational programs beyond 

secondary education, including programs leading to a degree or certificate, though 

this exemption shall expire on July 1, 2030; or

(ii) A State action exempts the institution based on the institution being in operation on 

or before November 8, 1965 without undergoing a change of ownership; or

(iii) A State action exempts the institution based on the institution's accreditation by one 

or more accrediting agencies recognized by the Secretary or based on the institution 

being in operation for at least 20 years, though this exemption shall expire on July 1, 

2030.

(ivii) An institution exempt from initial State authorization or licensure requirements

under this section that undergoes a change in ownership shall

Commented [A3]: Note: We are changing language on 

exemptions but maintaining sunsetting of reliance on accreditation 

or 20 years in operation.
State Authorization 4

(A) not be exempted from the requirements of 34 CFR 600.20(h)(3)(ii), which 

requires that the institution receive approval for the change in ownership from 

each State in which the institution is physically located or, for an institution that 

offers only distance education, from the agency that authorizes the institution 

to legally provide postsecondary education in that State; and

(B) seek initial approval for State authorization.

(b) An institution is considered to be legally authorized to operate educational programs beyond 

secondary education if it is exempt as a religious institution from State authorization under the State 

constitution or by State law.

(c)

(1) 

(i) If an institution that meets the requirements under paragraph (a)(1) or (b) of this 

section offers postsecondary education through distance education or correspondence 

courses to students located in a State in which the institution is not physically located or 

in which the institution is otherwise subject to that State's jurisdiction as determined by 

that State, except as provided in paragraph (c)(1)(ii) of this section, the institution must 

meet any of that State's requirements for it to be legally offering postsecondary 

distance education or correspondence courses in that State. The institution must, upon 

request,:

(i) d Document the State's approval to the Secretary; or 

(ii) If an institution that meets the requirements under paragraph (a)(1) or (b) of this 

section offers postsecondary education through distance education or correspondence 

courses in a State that participates in a State authorization reciprocity agreement, and 

the institution is covered by such agreement, the institution is considered to meet State 

requirements for it to be legally offering postsecondary distance education or 

correspondence courses in that State, subject to any limitations in that agreement and 

to any additional requirements of that State not relating to State authorization of 

distance education. The institution must, upon request, 

(ii) For institutions participating in a State authorization reciprocity agreement under § 

600.2, submit documentation of its coverage under such an agreement to the Secretary.

(2)

(i) For purposes of this section, an institution must make a determination, in accordance 

with the institution's policies or procedures, regarding the State in which a student is 

located, which must be applied consistently to all students. 
State Authorization 5

(ii) The institution must, upon request, provide the Secretary with written 

documentation of its determination of a student's location, including the basis for such 

determination. 

(iii) An institution must make a determination regarding the State in which a student is 

located at the time of the student's initial enrollment in an educational program and, if 

applicable, upon formal receipt of information from the student, in accordance with the 

institution's procedures, that the student's location has changed to another State.

(3)

(i) A State authorization reciprocity agreement must include a process for 

communicating information received on complaints regarding institutions or programs 

subject to the State reciprocity agreement to the State in which a student is located at 

the time of the student’s initial enrollment, as determined in accordance with paragraph

(c)(2) of this section.

(ii) If a State authorization reciprocity agreement is administered by an organization, the 

agreement must require that complaints received by States from institutions subject to 

the State reciprocity agreement are communicated to the organization. The 

organization must make information received on complaints public at least annually, 

including but not limited to the number and type of complaints by institution that is 

subject to the State reciprocity agreement.

(d) If an institution is authorized to offer distance education in another State under a State authorization 

reciprocity agreement, as defined in § 600.2:

(1) It may be exempted from initial State authorization or licensure requirements in that State.

(12) Such agreement must:

(i) Provide for a State-led process through which participating States can propose and 

collectively adopt, modify, or eliminate substantive policies of the agreement, including 

policies on State and institutional participation and the scope of reciprocity. Such a 

process, and such State-adopted or modified policies, cannot be overruled by any 

external entities that administer the agreement;

(iii) Allow any member State of the agreement to enforce its own—

(A) its own applicable general purpose general-purpose State laws and regulations 

outside of the initial approval for State authorization of distance education except for 

authorization or application fees and processes; and [Moved from 600.2]

(B) applicable State laws related to closure, including record retention, teach-out plans 

or agreements, and tuition recovery funds or surety bonds;

(ii) Allow any member State of the agreement to condition or revoke the authorization 

of an institution that operates in that State under the reciprocity agreement based on 

violations of such State’s general purpose laws and regulations;

Commented [A4]: Note: The Department reverted back to 

general purpose laws 

Commented [A5]: Note: The Department is adding language 

already finalized under certification procedures for clarity and 

consistency

Commented [A6]: Note: The Department is adding modified 

language suggested by negotiators. 
State Authorization 6

(iiiiii) Include a process for communicating information about a student’s complaints 

related to State authorization and the reciprocity agreement’s policies to the State in 

which the student is located in accordance with paragraph (c)(2)(i)-(iii) of this section,

including the time of the student’s initial enrollment or, if there has been a formal 

receipt of information from the student in accordance with the institution’s procedures, 

that the student’s location has changed to another State;

(iv) Permit the member States responsible for receiving, and providing a final 

determination on, a student complaint, as determined under the agreement’s policies, 

to, at the States’ discretion, accept, investigate, and resolve complaints about an 

institution without the student first going through the institution’s own procedures for 

resolution of grievances under limited circumstances. Reasons for executing State 

discretion include but are not limited to impracticability, impossibility, inaction by the 

institution, and possible harm to the student;

(iviiv) Provide that complaints received by States about institutions subject to the State 

reciprocity agreement must be communicated to the organization(s) that administer(s) 

the agreement. The organization(s) must make information received on complaints 

public at least annually, including but not limited to the number and type of complaints 

by institution that is subject to the State reciprocity agreement;

(ivvi) Provide that complaints alleging criminal offenses or violations of a State’s generalpurpose laws, including but not limited to fraud, misrepresentation, and harassment,

may be made directly to appropriate State agencies in the institution’s or student’s 

home State; and

(viii) permit member States to, consistent with their own statutes and regulations, at 

their State’s discretion, accept, investigate, and resolve complaints about an institution 

of higher education that have not yet been submitted to and resolved by the institution 

of higher education.

(223) If administered by an organization, the governing body of such organization must consist 

solely of representatives from State regulatory and licensing bodies, enforcement agencies, and 

attorneys general offices. [Moved from 600.2]

(34) As a condition of participation, the institution may not be authorized through reciprocity in

a State must obtain within one year direct authorization from any participating State, where it 

enrolleds more than 500 students in the two most recently completed award years.

(de) An additional location or branch campus of an institution that meets the requirements under 

paragraph (a)(1) of this section and that is located in a foreign country, i.e., not in a State, must comply 

with §§ 600.8, 600.10, 600.20, and 600.32, and the following requirements:

(1) For any additional location at which 50 percent or more of an educational program (as 

defined in § 600.2) is offered, or will be offered, or at a branch campus—

Commented [A7]: Note: The Department is not proposing to 

change its threshold
State Authorization 7

(i) The additional location or branch campus must be legally authorized by an 

appropriate government authority to operate in the country where the additional 

location or branch campus is physically located, unless the additional location or branch 

campus is physically located on a U.S. military base, facility, or area that the foreign 

country has granted the U.S. military to use and the institution can demonstrate that it 

is exempt from obtaining such authorization from the foreign country; 

(ii) The institution must provide to the Secretary, upon request, documentation of such 

legal authorization to operate in the foreign country, demonstrating that the foreign 

governmental authority is aware that the additional location or branch campus provides 

postsecondary education and that the government authority does not object to those 

activities; 

(iii) The additional location or branch campus must be approved by the institution's 

recognized accrediting agency in accordance with § 602.22(a)(2)(ix) and (c). 

(iv) The additional location or branch campus must meet any additional requirements 

for legal authorization in that foreign country as the foreign country may establish; 

(v) The institution must report to the State in which the main campus of the institution 

is located at least annually, or more frequently if required by the State, the 

establishment or operation of each foreign additional location or branch campus; and 

(vi) The institution must comply with any limitations the State places on the 

establishment or operation of the foreign additional location or branch campus. 

(2) An additional location at which less than 50 percent of an educational program (as defined in 

§ 600.2) is offered or will be offered must meet the requirements for legal authorization in that 

foreign country as the foreign country may establish. 

(3) In accordance with the requirements of 34 CFR 668.41, the institution must disclose to 

enrolled and prospective students at foreign additional locations and foreign branch campuses 

the information regarding the student complaint process described in 34 CFR 668.43(b), of the 

State in which the main campus of the institution is located. 

(4) If the State in which the main campus of the institution is located limits the authorization of 

the institution to exclude the foreign additional location or branch campus, the foreign 

additional location or branch campus is not considered to be legally authorized by the State.