State Authorization: Responses to Questions Addressed during Session 3

In response to a request from non-Federal negotiators for comments presented by the Department in 

response to questions from negotiators, the Department is providing written response.

Q1: In introducing the conversation about education-specific laws, what issues or problems is the 

department trying to address?

Response: In crafting this language, the Department is balancing the goals of ensuring that institutions 

have a reasonable path to offer distance education to students who do not reside within their borders 

by ensuring institutions participating in reciprocity will not be subject to the most burdensome 

authorization requirements while ensuring that States have the choice and ability to protect their 

students if an institution located in another State tries to take advantage of students or is at risk of 

closure. We are concerned about past situations in which States have raised concerns about institutions 

that are physically located outside of its borders and taking advantage of students while the State is 

limited in its ability to apply its own consumer protection laws in these areas to protect its residents. 

That can hamper State efforts to try and step in and help students if there is evidence that an out-ofState school is taking advantage of students. It can also minimize the ability of students attending a 

school that closed to access protections offered to students attending physically in their state such as 

tuition recovery funds to repay any tuition paid out of pocket.

Q2: How are these issues and concerns different than the Department’s original concerns, which 

focused on “complaints and governance”?

Response: The Department has stated from the beginning that it is concerned that the structure of 

reciprocity agreements have shortcomings that fail to protect students and taxpayers and that reduce 

States’ oversight of institutions. This is an area the Department also addressed in recently finalized 

certification procedure rules. After hearing concerns and compelling reasoning from negotiators about 

how States are limited in enforcing those recently finalized rules, as well as a proposal from negotiators, 

the Department proposed to readdress the issue here.

Q3: For the issues/problems identified, what evidence or data can the department provide about the 

scale and scope of the issues?

Response: The Department does not have data to identify the number of students enrolled in distance 

education through reciprocity.

Q4: How will the introduction of education-specific language help to resolve these issues and in what 

ways? What is the department’s ultimate rationale for how this will fix the most pressing issues?

Response: The Department has removed education-specific from the proposed regulations. The 

Department asked for input about rules and regulations specific to institutions of higher education that 

do not fall under general purpose laws and which may fall under the category “education-specific” 

which came at the suggestion of several negotiators.

Q5: Would the Department’s proposed language disallow SARA’s current policy that prevents states 

from enforcing education-specific authorization requirements on out-of-state institutions?
Response: The Department’s language is not specific to SARA. For Title IV purposes, under the proposed 

language, if an institution is participating in reciprocity, that reciprocity agreement must allow any 

member State to enforce its laws and regulations outside of initial approval, application, or fees, if it 

chooses to do so. It will ultimately be up to States to make that determination and as put forward from 

some negotiators, we understand States may decline to avail themselves of this enforcement option. 

However, we think it’s important to allow States the ability to enforce their laws if they so choose. We 

know that at least one State legislature is considering legislation in this area.

Q6: Where, specifically, in the Higher Education Act does the department derive regulatory authority

over state authorization? Such authority is not included in Section 495 on State authorization.

Response: HEA 101 requires institutions to be “legally authorized” by the State in order for it to 

participate in the Title IV programs. Since the statute does not define, what “legally authorized” means 

the Department must define this through regulation. The Department is defining the term for purposes 

of participation in a Federal program. The Department is not defining “legal authorization” for any other 

purposes.

Q7: What are the problems the Department is trying to solve that were not resolved after the 

enactment of the 2010 version of 600.9(a)?

Response: As mentioned in issue paper 1, The Department is concerned that existing State authorization 

regulations, which allow States to exempt certain institutions from State approval and licensure 

requirements if the institution is accredited by an accrediting agency recognized by the Secretary or if 

the institution has been in operation for 20 years, do not ensure sufficient State oversight of those 

institutions. State exemptions of certain categories of institutions from approval weaken the program 

integrity triad for institutions that want to participate in the Federal student aid programs, making 

students and taxpayers vulnerable. The Department has seen examples of abuses such as 

misrepresentation that should fall under State authority and enforcement, but do not.