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Issue: Complaint Systems and Governance in State Authoriza�on

Statutory Cites: Sec�on 101(a) of the Higher Educa�on Act of 1965, as amended (HEA)

Regulatory Cites: 34 CFR 600.2 and 600.9

Submited by: Dr. Robert Anderson

1. Summary of Proposal:

In this proposal, we provide alterna�ve language on the governance of State authoriza�on reciprocity 

agreements and their complaint systems. We support the Department’s language on complaints with 

modest changes to beter account for student mobility. On governance, we understand the 

Department’s concerns that the current governance of SARA, and NC-SARA’s role in the State-led policy 

process, could leave the appearance of poten�al conflicts-of-interest that subvert the will of the States. 

We are open to discussing poten�al approaches – consistent with the Department’s statutory authority 

to regulate State authoriza�on reciprocity agreements – that address these concerns.1

The governance of SARA is complex and dis�nct from NC-SARA’s governance. SARA is governed by 

par�cipa�ng States in partnership with the regional interstate higher educa�on compacts2 and 

coordinated and overseen by NC-SARA. NC-SARA is to maintain a limited role within the overall 

governance of SARA. Currently, NC-SARA plays a role in the SARA policy modifica�on process of 

providing final approval of policies adopted by all four regions (with States vo�ng through their regional 

compacts). The understanding and prac�ce of SARA partners (including States, regional compacts, and 

NC-SARA) has been that NC-SARA’s posi�on as the final vote on a policy proposal is not to func�on as a 

veto, but as final assurance that such changes are legally and fiscally supported. We recognize that this 

role causes concern because NC-SARA could, theore�cally, subvert State inten�ons. We propose

elimina�ng this role. 

In sum, collec�vely the SARA partners share the Department’s stated goal, which we interpret as 

ensuring a State authoriza�on reciprocity agreement is defined by States with NC-SARA playing a 

suppor�ng role. We look forward to working with all of the cons�tuencies represented on this 

nego�a�ng commitee to refine proposals and are open to modifica�ons to the language proposed 

below. We believe this language, opera�ng in the current SARA governance structure, will address the 

Department’s concerns. 

2. State Authoriza�on Reciprocity Agreements (600.2 and 600.9)

The proposed regulatory language atempts to do the following: 

1. Ensure that States lead and control reciprocity agreements and are the final arbiters of 

substan�ve policies. 

1 We noted that during negotiators’ discussion, some commenters suggested a broad and nearly universal 

Departmental regulatory authority that goes beyond what is intended in the statute and supported by existing 

case law.

2 The regional compacts are agencies or bodies corporate of their member states. Their boards are generally 

gubernatorially-appointed and they are firmly in state control. Nego�ators can provide addi�onal informa�on if 

desired. 
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2. Ensure necessary informa�on related to complaints is communicated to appropriate State

en��es and clarify any inconsistencies related to a student’s loca�on.

We also note that it may be appropriate to discuss moving most of the regulatory language from the 

Defini�ons sec�on (600.2) to the State Authoriza�on sec�on (600.9) for clarity and consistency. 

Proposed Regulatory Redline

§ 600.2 Defini�ons. 

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

ins�tu�on located and legally authorized in a State covered by the agreement to provide postsecondary 

educa�on through distance educa�on 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 regula�ons outside of the State authoriza�on of distance educa�on. 

[NOTE: We propose moving all policy language to Sec�on 600.9. Our response to the Department’s 

proposal at 600.2(1-4) and the language struck above are included in 600.9(c)(3)(i & ii) below.] 

§ 600.9 State Authoriza�on.

c. (3) A State authoriza�on reciprocity agreement must:

(i) Adopt a State-led process through which par�cipa�ng States can propose, and collec�vely

adopt, modify, or eliminate substan�ve policies of the agreement, including policies on State

and ins�tu�onal par�cipa�on and the scope of reciprocity. Such a process, or State-adopted 

policy modifica�ons thereof, cannot be overruled by any external en��es that administer the 

agreement.

(ii) Allow any member State of the agreement to enforce its own general-purpose State laws and 

regula�ons outside of the State authoriza�on of distance educa�on. 

(iii) Include a process for communica�ng informa�on about complaints related to State 

authoriza�on and the reciprocity agreement’s policies to the State in which a student is located

in accordance with (c)(2) (i-iii) of this sec�on including �me of the student’s ini�al enrollment or 

if there has been a formal receipt of informa�on from the student, in accordance with the 

ins�tu�on’s procedures, that the student’s loca�on has changed to another State.

(iv) Permit the member States responsible for receiving and providing a final determina�on on a 

student complaint, as defined by the agreements’ policies, to, at the State’s discre�on, accept, 

inves�gate, and/or resolve complaints about an ins�tu�on without the student first going 

through the ins�tu�on's own procedures for resolu�on of grievances under limited 

circumstances. Reasons for execu�ng State discre�on include, but are not limited to 

imprac�cability, impossibility, inac�on by the ins�tu�on, and possible harm to the student. 

(v) Ensure that complaints received by States about ins�tu�ons subject to the State reciprocity 

agreement are communicated to the organiza�on(s) that administer(s) the agreement. The 

organiza�on(s) must make informa�on received on complaints public at least annually, including 

but not limited to the number and type of complaints by ins�tu�on that is subject to the State 

reciprocity agreement.
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(vi) Ensure that complaints alleging criminal offenses or viola�ons of a State’s general purpose laws, 

including but not limited to fraud, misrepresenta�on, and harassment may be made directly to 

appropriate State agencies in the ins�tu�on’s or student’s home State. 

3. Ra�onale

Governance. 

Our substan�ve proposals address the Department’s fundamental concern that “NC-SARA’s board...has 

veto power over any proposed changes to SARA policy – poten�ally further s�fling States’ ability to 

improve consumer protec�ons for SARA ins�tu�ons.” While it is true that SARA policy changes must 

receive approval from States in all four regions and the NC-SARA Board, the inten�on was never that the

NC-SARA board would use this as a veto and our proposed regula�on would eliminate that possibility by 

removing the requirement that the board of NC-SARA approve changes.

We have concerns about the Department’s approach, including that it is overbroad, arbitrary, and would 

prevent numerous highly-qualified individuals who are obviously not beholden to ins�tu�ons from 

serving in these important roles. Addi�onally, it would fail to address the Department’s central concern.

We can conceive of numerous other governance arrangements that would be compliant with what has 

been proposed by the Department but would readily allow for the poten�al conflicts it has iden�fied.

Our proposal would build on an exis�ng State-led policy modifica�on process that received praise from 

States, organiza�ons represented on this Commitee, and other SARA cri�cs. The proposed language 

would prevent an en�ty administering the agreement from overruling the collec�ve will of the member 

States.3

 

Complaints. The new language ensures that the complaint informa�on is shared between appropriate 

States. When an ins�tu�on has formally received informa�on that a student has moved from the State in 

which they were located when first enrolled, the complaint informa�on must be shared with the new 

State instead. The ini�al State no longer has jurisdic�on to provide appropriate input or ac�on for the 

resolu�on of the complaint. The proposed language mirrors that found in 34 CFR 600.9(c)(2)(i-iiI)

regarding student loca�on.

State complaint processes, as required by 34 CFR 600.9(a), vary as to the process to accept complaints, 

with language ranging from “encouraging or recommending” that the student pursue the ins�tu�on 

complaint process before contac�ng the State agency, to “exhaus�ng” all ins�tu�onal processes first and 

many policies in between.4

 This proposed language honors those State differences by providing that a 

State authoriza�on reciprocity agreement must offer states the discre�on to accept the complaint 

without first seeking ins�tu�onal resolu�on under circumstances that honor State laws and prac�ces. 

3 We also note that through this process, States, rather than NC-SARA or the Federal Government, can determine 

the extent of reciprocity, and specifically whether member states should be able to enforce their own educa�onspecific authoriza�on requirements on out-of-state ins�tu�ons, as proposed by Nego�ator Fast. 4 Nego�ators will be happy to provide more detailed research on the range of policies if requested. 
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We also concur with the Department that repor�ng and making public the number and type of 

complaint is important, and with nego�ators who raised concerns about complaints alleging criminal 

behavior.5

5 Current SARA policy allows student complaints alleging viola�ons of general-purpose laws, which would include 

fraud, misrepresenta�on, and harassment, to be made directly to States and/or appropriate authori�es without 

engaging the ins�tu�onal complaint process.