Negotiated Rulemaking Program Integrity and Institutional Quality – 2/6/24

1

 DEPARTMENT OF EDUCATION

OFFICE OF POSTSECONDARY EDUCATION

NEGOTIATED RULEMAKING PROGRAM INTEGRITY 

AND INSTITUTIONAL QUALITY

SESSION 2, DAY 2, MORNING

FEBRUARY 6, 2024

On the 6th day of February, 2024, the

following meeting was held virtually, from 10:00 a.m. 

to 12:00 p.m.
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P R O C E E D I N G S

MR. WAGNER: Welcome. Welcome to 

session two, day two, of the neg reg for program 

integrity and institutional quality. My name is Kevin 

Wagner. I'm a commissioner with FMCS, and I'll be 

facilitating the morning session. We're going to go 

ahead and start off with a roll call with all the 

nonfederal negotiators. So, let's get started with that. 

Representing the business officers from institutions of 

higher education, Joe Weglarz.

MS. CHASE: Joe's absent today. I'll 

be sitting in for him.

MR. WAGNER: Okay, that leads right 

in- also, Dom Chase.

MS. CHASE: Present.

MR. WAGNER: Thank you, Dom. 

Representing the civil rights organizations and consumer 

advocates, we have Carolyn Fast.

MS. FAST: Good morning

MR. WAGNER: Good morning. We also 

have Magin Sanchez.

MS. SANCHEZ: Good morning, everyone. 

Happy Tuesday.

MR. WAGNER: Good morning. 

Representing financial aid administrators, we have 
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JoEllen Price.

MS. PRICE: Good morning. I'm here.

MR. WAGNER: Welcome. And Zack 

Goodwin.

MR. GOODWIN: Good morning, everyone.

MR. WAGNER: Representing 

historically Black colleges and universities, tribal 

colleges and universities, and minority serving 

institutions, we have DR. Charles Prince.

DR. PRINCE: Present.

MR. WAGNER: Welcome. And D'Angelo 

Sands. Okay. D'Angelo is not in yet. Representing 

institutional accrediting agencies recognized by the 

Secretary, we have Jamie Studley.

MS. STUDLEY: Good morning.

MR. WAGNER: Good morning. And 

Michale McComas. Okay. Representing legal assistance 

organizations, we have Robyn Smith.

MS. R. SMITH: Good morning.

MR. WAGNER: Good morning. And 

Sophie Laing.

MS. LAING: Good morning.

MR. WAGNER: Good morning. 

Representing private nonprofit institutions of higher 

education, Erika Linden.
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MS. LINDEN: Good morning, all.

MR. WAGNER: Good morning. And Scott 

Dolan.

MR. DOLAN: Good morning.

MR. WAGNER: Representing the 

programmatic accrediting agencies, we have Dr. Laura 

Rasar King.

DR. KING: Good morning.

MR. WAGNER: Good morning. And Amy 

Ackerson.

MS. ACKERSON: Good morning.

MR. WAGNER: Good morning. 

Representing proprietary institutions of higher Ed, we 

have Jillian Klein.

MS. KLEIN: Good morning.

MR. WAGNER: Good morning. And David 

Cohen.

MR. COHEN: Good morning.

MR. WAGNER: Good morning. 

Representing the public four-year institutions, we have 

the Jason Lorgan.

MR. LORGAN: Good morning.

MR. WAGNER: Good morning. And 

Alyssa Dobson.

MS. DOBSON: Good morning.
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MR. WAGNER: Representing public twoyear institutions, we have Jo Blondin.

MS. BLONDIN: Yes. Thank you.

MR. WAGNER: And Michael Cioce. 

Okay, and Michale McComas just joined. Representing 

state attorney generals, we have Diana Hooley.

MS. HOOLEY: Good morning.

MR. WAGNER: Representing the state 

officials, we have John Ware. Good morning and Robert 

Anderson.

MR. ANDERSON: Good morning.

MR. WAGNER: Good morning. 

Representing students or borrowers, Jessica Morales.

MS. MORALES: Good morning.

MR. WAGNER: Good morning. And 

Emmett Blaney.

MR. BLANEY: Good morning.

MR. WAGNER: Good morning. 

Representing U.S. military service members, veterans, or 

groups representing them, we have Barmak Nassirian.

MR. NASSIRIAN: Good morning.

MR. WAGNER: Good morning. And 

Ashlyn Haycock-Lohmann.

MS. HAYCOCK-LOHMANN: Good morning.

MR. WAGNER: Federal negotiator for 
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the Department, we have Greg Martin.

MR. MARTIN: Good morning.

MR. WAGNER: Good morning, Greg. And 

representing the Department’s Office of General Counsel, 

we have Denise Morelli.

MS. MORELLI: Good morning.

MR. WAGNER: And Donna Mangold.

MS. MANGOLD: Good morning.

MR. WAGNER: Representing the 

Department, we also have David Musser.

MR. MUSSER: Good morning, all.

MR. WAGNER: Good morning. And 

Herman Bounds.

MR. BOUNDS: Good morning, everyone.

MR. WAGNER: Good morning. My 

colleagues from FMCS, we have Cindy Jeffries.

MS. JEFFRIES: Good morning.

MR. WAGNER: Brady Roberts.

MR. ROBERTS: Good morning, everyone.

MR. WAGNER: Krystil Smith.

MS. K. SMITH: Good morning.

MR. WAGNER: And John Weathers.

MR. WEATHERS: Good morning, 

everyone.

MR. WAGNER: So, I believe today 
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we're for this session we're going to start with state 

authorizations. That's issue paper number two. The 

issue will be reviewed and discussed. And typically, at 

the end of each section, we'll be asking for temperature 

checks just to see where things stand with that 

particular section. Just a reminder, when we do 

temperature checks, the thumbs up is we can agree. The 

middle thumb is we can live with it 70% and can support 

it and if the thumb is down, that means you don't support 

it, but we'll ask, you know, what would it take to get 

you to support that particular section? I do see, before 

we get started, Dom, you have your hand up.

MS. CHASE: Yes. Thank you. I would 

like to call for a caucus with representatives of 

institutions of higher education, both primary and 

alternate.

MR. WAGNER: Cindy, can you weigh in 

on that for me?

MS. JEFFRIES: Sure. No problem. 

Dom, you said with the primary and alternate of higher 

education?

MS. CHASE: Yeah. From institutions. 

Yes.

MS. JEFFRIES: Okay. Can you give me 

those names?
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MS. CHASE: Yes. You want me to read 

them aloud or put?

MS. JEFFRIES: Yes, please. Because 

we need to have them on the record.

MS. CHASE: Okay. Just pulling it up 

here.

MS. JEFFRIES: Sure.

MS. CHASE: Can I just ask those that 

are to signal some way. So that way I don't have to.

MS. JEFFRIES: I was just going to 

say. For theMR. WAGNER: If you could raise your 

hand, that'd be great.

MS. JEFFRIES: There you go. So, we 

have Jillian, right?

MR. WAGNER: It looks like we have 

Dom, Erika, Jillian, Jo Blondin, Jason Lorgan, Scott 

Dolan, DC and David Cohen. There should be eight.

MS. JEFFRIES: Okay, so, Brady, you 

want to in just a moment put them in a breakout room? 

First, Dom, can you give us some sort of idea how long 

you need for the caucus?

MS. CHASE: I would say 30 minutes.

MS. JEFFRIES: Okay. Alright. And 

we will check in with you to see if you need additional 
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time. I also see this on there. Okay, so I have a total 

of nine.

MR. ROBERTS: Yep, I got nine because 

I think Alyssa was off camera, but she raised her hand as 

well.

MS. JEFFRIES: Yes, yes okay. So 

about 30 minutes it is 10:08. If while you're in your 

caucus you need assistance, please hit the ask for help 

button and one of the facilitators will come in. 

Alright?

MS. CHASE: Thank you.

MS. JEFFRIES: So, with that, we can 

go off live feed while the parties caucus.

MS. JEFFRIES: Okay. Welcome back. 

We have briefly gone back live. There was a question 

posed after the live feed regarding the caucus process. 

Wanted to be sure that the public was involved in 

understanding what the caucus means. Any party, 

according to protocol, is allowed to call a caucus with 

other constituency groups and/or the Department. In this 

case, it is amongst constituency groups. We have always 

had the practice of asking the parties who they want in 

that caucus. So, it is a matter of record as well as how 

long they will be meeting. In some circumstances, the 

parties do share what their caucus is about. We do 
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expect that the caucuses that are being utilized in a 

daily session pertain to the topics that we will be 

discussing today. They do not have to necessarily tell 

us what they are caucusing about. Alright? That is how 

the caucuses have run. We will ask when you come back 

from your caucus if you have anything to report out for 

an update and then we will move into the issue paper that 

we have coming up. Dom?

MS. CHASE: Is there a question or?

MR. ROBERTS: I think it was a hand 

raised. Cindy just.

MS. CHASE: Oh, I think it's from 

previously. Sorry.

MS. JEFFRIES: Oh, okay. No worries. 

Jo, you have your hand up.

MS. BLONDIN: I do have a hand raised 

because I'm new to this. What happens when we go into 

caucus? I know the discussion stops but I'm just curious, 

like, what are the other negotiators, I mean, are they

just coming back at a certain time after because they 

have a break, or is there conversation? I've not been 

involved in this, so I'm just curious.

MS. JEFFRIES: There's absolutely no 

more table discussions on any of the issues once you go 

into caucus and we break the live feed. The table 
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discussions cease. The negotiators are free to do what 

they need to do during that time frame, which is why we 

ask for an estimate as well as for our public viewers so 

that they know when approximately to come back. 

Sometimes other groups will ask to caucus during that 

time period, which is not the case at this point. But 

sometimes they do. But basically, everything is on hold 

until you return from your caucus, which is why we ask 

that your caucuses pertain to the topics of the day 

because everybody is on hold and when approximately you 

will be back. Does that help, Jo?

MS. BLONDIN: Very much. Thank you.

MS. JEFFRIES: You're welcome. Any 

other questions? Alright, so let's go ahead and break 

the live feed and, Brady, if you would kindly move the 

participants to their caucus room.

MR. ROBERTS: Yep. Everyone's been 

invited. So, if the message is still up to the 

invitation of room five [inaudible].

MR. WAGNER: Welcome back. Just 

wanted to let everyone know that the group that went 

ahead in caucus are all back in the main room. Before we 

get started on going to the issue paper, I want to see if 

there's anything that the caucus members would like to 

report out to the group if they would choose so. Go 
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ahead, Dom.

MS. CHASE: Yes. Thank you for the 

opportunity. I would like to just point out that at the 

close of yesterday's session, Greg had mentioned that wethe parties had made significant progress toward 

consensus. And while I'm in agreement that components of 

the cash management significant progress were made to 

consensus, there were significant concerns expressed 

around other areas throughout the day. So, I wanted to 

caucus based on that prior to moving forward with the 

next subject. And this group intends to submit all 

alternative language for the Department's consideration 

that is negotiating in good faith, even moving more 

toward transparency around a number of issues. So please 

look for that. Appreciate the time. Thanks.

MR. WAGNER: Thanks, Dom. Anything 

else? Okay. Greg, would you like to start with the 

issue paper number two, state authorization?

MR. MARTIN: Sure. I'll be glad to 

do that. This morning, we'll be going into issue paper 

two, again, state authorization. And, I should say 

something, I guess, you know, regarding, remarks 

yesterday, consensus is consensus. Obviously, it's 

reached, or it isn't. I think that characterized the 

discussion yesterday and I was pleased with the tenor of 
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the discussion and the nature of the interaction. I 

didn't mean to suggest that we had approached consensus. 

If I did that, I apologize. That was premature. But 

what I did want to say was that I was pleased with the 

nature of the discussion. So, having said that, let's 

move into issue paper two. A little bit about what we'll 

do today. We're going to review issue paper two. I'll 

be doing that with the negotiators. And following that, 

David Musser will start with distance education and that 

will be later this afternoon. So just so everybody knows 

where we are with that. Looking at issue paper two, what 

I'd like to do with this one, if you, just looking at the 

way it's broken up. Of course, it's a little bit 

different than the other ones we have because, we're 

really only dealing with two sections here. Right? So,

600.2 and 600.9, it is substantive within those sections. 

But I think it affects how we are going to look at the 

temperature checks. Again, I want to reiterate that 

temperature checks are not consensus. They are not a 

vote. They're simply an indication of how the 

negotiators are feeling about sections at a given time 

just so we can get a sense for how the discussion is 

flowing. So, nothing is binding. But what I'd like to 

do is look in 600.2, the definitions, we removed a lot of 

what's there, and moved a lot of it over to 600.9. So, 
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it would be very difficult to take a consensus of just 

what's in 600.2, because it relates so closely to what's 

in 600.9 and 600.9 (d). If we look at 600.9, what I'd 

like to do is go over (a) and we'll look at 600.2, and 

then do 600.9 (a) and (b) and we'll probably take a 

consensus talk about (a) and (b) because those sections 

can be looked at independently. And then when we take a 

census, I'm sorry, when we take the temperature at the 

end we'll look at (c) and (d) and then look at those in 

consideration of 600.2. So that's how we'll do this. 

But we'll walk through everything in order. I don't want 

to get out of order and walk you through the paper at 

all. We're going to go through the paper exactly as it's 

presented here for you. So, I just want to point that 

out. But you'll see as we go through that, I think that 

will make the most amount of sense. So just in starting 

here, the Department received a proposal to allow any 

member of a state authorization reciprocity agreement to 

enforce its own education-specific laws. So, as we walk 

through this paper, we are interested in feedback for 

what defines education-specific law. Because we've had a 

lot of discussion previously about education-specific 

and, you know, those that are not education-specific. 

So, we want to see what the negotiators are thinking 

about putting parameters around exactly what that means. 
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Additionally, we are interested in feedback on how the 

regulations can better distinguish between state 

authorization requirements for approval and renewal and 

those related to state oversight. So, I'd like to 

discuss those questions in the relevant sections of the 

regulations as we get to them. The language presented in 

this issue paper for your consideration reflects a 

combination of components of various proposals that we 

received from the negotiators. So having said that, 

let's pull up 600.2 and we'll start with what we have 

there. This is the definition of a state authorization 

reciprocity agreement. Remove the language related to 

prohibiting states from enforcing general purpose laws 

and our proposed language on governing boards, from the 

definition to the overarching state authorization 

regulation 600.9. So, we'll see where that goes. And 

you can see there what we've done in the definition of 

state authorized reciprocity agreement. So, you can see 

what's been excised from that. And you note that, in the 

first part there, we have moved that over to 600.9. So,

all of what you see here, though it's been eliminated 

from 600.2 definition will move over into 600, move into 

600.9 when we get there. So, I don't think we want to 

look at 600.2 outside of the context of what's being done 

in 600.9. So, we will get there. So, you can see what 
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we've done in 600.2. Let's move on to 600.9 in (a) and 

talk a little bit about what's going on there. Overall, 

we made some changes to this section that reworks it to 

provide clarity because we believe the current way 

regulations are written to create confusion. Previous 

rulemakings we've attempted to provide clarity to 

colleges and universities for what state authorization 

meant. We believe further clarification is needed to 

outline that. The first way we've done that here is, by 

inserting a provision saying that a state ensures the 

institution complies with any applicable state 

authorization or licensure requirements and continues to 

meet a state's general purpose or education-specific laws 

and regulations. So you can see there, if we look at 

600.9, the inclusion of that language ensures an 

institution described in 600 described rather under 

600.4, 600.5 or 600.6, and institutional eligibility is 

legally authorized by a state if the state 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 educational specific 

laws and regulations. So, you can see what was done 

there. And what's removed there is just references to 

other areas that we have taken out. And again, we can 
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move to, as it says here, except as under subsection 3e, 

so we can move to 3 and look at what we've done there.

MS. R. SMITH: Can I just ask a 

question about that particular language?

MR. MARTIN: Sure.

MS. R. SMITH: I am wondering why 

it's an or and not an and in between the general purpose 

or education-specific laws, it seems to me you'd want an 

and there. And then this other section would clarify. 

But if you have an or, it doesn't make sense to me.

MR. MARTIN: We're talking about, 

let's go back. So, you're talking about insures the 

institution complies with any applicable state 

authorization or licensure requirements, except as 

described in subsection 3 of this section, and continues 

to meet the state's general purpose or education-specific 

laws and regulations. And you believe you're saying that 

it should be the or should be an and.

MS. R. SMITH: Right, because you 

don’t want a choice between one or the other. You want 

both as you clarify in this subsection three later on 

would be me.

MR. MARTIN: I think that makes total 

sense. Actually, I'm going to suggest that we make that 

change. Thank you. That does make for a better 
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[inaudible]. Okay. So, let's go over to subsection 3. 

And these are the exemptions as we've reworked them. So, 

a little bit about these exemptions. We have removed the 

language related to exemptions if an institution is 

accredited by an accrediting agency recognized by the 

Secretary, or if an institution has been in operation for 

20 years and moved those to a new subsection, rather to 

new section in 600.93. In this section related to our 

discussion questions, we clarified that the exemption is 

subject to requirements from initial and required 

application for authorization or licensure for exemptions 

due to accreditation and being in operation for 20 years. 

We added a date to phase out this exemption, so 

institutions must be reviewed by their state within 5

years of an effective date of July 1, 2025. Assuming we 

are able to meet the master calendar requirements, we 

believe this gives states sufficient time to make any 

necessary changes to laws and regulations and set up 

processes that are not in place currently. So, let's 

take a look at what is in three together. The 

institution may be exempted from the requirements for 

initial or renewed application for authorization or 

licensure, if the institution is offering distance 

education in that state under a state authorization 

reciprocity agreement as defined in 600.2. The students 
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in that state but is not physically located in that 

state. Romanette two, not later than July 1st, 2030. A 

charter, statute, constitutional provision or other 

action issued by an appropriate state agency or state 

entity establishes that the institution by nameestablishes the institution by name as an educational 

institution and authorizes it to operate educational 

programs beyond secondary education, including programs 

leading to a degree of certificate. Or not later than 

July 1st, 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. So, you can see the exemptions are retained. 

However, there is a sunset date there of not later than 

July 1st, 2030, again corresponding to a five-year period 

after the date that we believe these rules would be 

effective, rather, if we meet the master calendar, that 

would be July 1st of 2025. So now, we've looked at (a) 

and (b) of 600.9. I'd like to open the floor for 

discussion at this point.

MR. WAGNER: Yes, John, I see your 

hand. Go ahead.

MS. WARE: Yeah, I agree with what 

Robyn said in that first section. It makes more sense to 
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have an and in there, because I think generally schools 

should be- I think what you're trying to say there, 

right, is that schools are in compliance with the laws of 

the state, essentially where they're located. Which 

makes sense, obviously. And as to the next section. I'm 

trying to figure out, does that mean that the exemptions 

go away after 2030, or does it mean that if you've been 

exempted prior to 2030 that the exemption is still good? 

I think what you just said seems to be that after 2030, 

no one can be exempt after that.

MR. MARTIN: That's correct. It 

provides an off-ramp for the exemption, after which time 

states would have to look at those schools.

MS. WARE: Okay, so then any schools 

that have been previously exempted via statute or any 

other provisions would have to go through an 

authorization process.

MR. MARTIN: Yes.

MS. WARE: Okay, thanks.

MR. WAGNER: Barmak, I see your hand. 

But really quickly, I just wanted to announce that Emmett 

will briefly be in for student borrowers. Go ahead, 

Barmak.

MR. NASSIRIAN: So the institution is 

offering distance education in that state under state 
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authorization reciprocity agreement. This is a kind of a 

bigger picture framing issue, perhaps, but I just want to 

flag it for the Department's attention. Carolyn and I 

submitted a proposal after the last reg neg suggesting 

that reciprocity agreements should only apply to 

institutions that have an incidental presence or a fairly 

minor presence in the states. That institutions that 

have a significant footprint in a given state should go 

directly to the authorizers in that state for purposes of 

operating there. And the rationale for that is that 

state regulators need resources. You can't have 

institutions that actually eclipse many in-state 

institutions in terms of their enrollment size, via 

distance, play by a different set of rules and 

fundamentally deny those regulators the resources they 

need to actually do the job that they're supposed to do. 

So, I really would encourage the Department to 

contemplate a modification here so that the state 

reciprocity agreements cover those institutions that 

really should not have to go to every state in which they 

may have a fairly small footprint to obtain 

authorization. But that mega universities that, as I 

said, eclipsed in terms of their enrollment size, many of 

the in-state providers, should go directly to the state 

authorizers. Corporations do this all the time. They 
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operate in the 50 states, and the Department should not 

create a back door for evasion of fundamental rules that 

apply to everybody else. This is a matter of leveling 

the playing field within each state secondly, providing 

adequate resources to the regulators. So, I would 

encourage the Department to contemplate that change. 

Thank you.

MR. MARTIN: Thanks, Barmak. I'd 

like to hear specifically, all comments, obviously, but

any comments in response to what Barmak has just made.

MR. WAGNER: I just want to let 

everyone know that Rob Anderson is in for state 

regulators, and he has his hand up. So, Rob, take it 

away.

MR. ANDERSON: Thank you, Kevin. 

This isn't in response to Barmak, but looking at 

clarification regarding this education-specific language, 

which I'm trying to kind of encapsulate this in a realworld example to see how the Department might handle 

this. And first of all, of course, the institutions must 

follow state law that's not controversial. We all 

support that. But there's important clarifications 

within this. In the Department's recent rulemaking on 

certification procedures, you know, requiring compliance 

with state closure requirements. It used a similar type 
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of framing, where institutions are now required to 

certify that they comply with state laws regarding 

closures. And the way this was put was, the Department 

stated that the certification requires institutions to 

affirm that they are complying with applicable state laws 

related to, in this case, closure. For instance, if a 

state's tuition recovery fund exempts out-of-state 

institutions, those institutions would not have to abide 

by it. The Department further wrote, we note that many 

states exempt closure requirements for institutions under 

a reciprocity agreement. So, this regulation, you know, 

didn't affect how states may choose to promulgate their 

laws. So, one clear example is the state of Virginia, 

which has broad education-specific laws for out-of-state 

distance education providers. But in regulations, states

clarify that the laws are not applicable to institutions 

participating in SARA. Virginia can easily ensure that 

the out-of-state institutions offering education within 

the Commonwealth are compliant within SARA. So, the way 

it states in Virginia is, any degree-granting 

postsecondary school providing distance Ed to residents 

of the Commonwealth from a location outside shall be 

certified to operate or shall be a participant in a 

reciprocity agreement to which the Commonwealth belongs. 

So that's what they have decided to do. That's their 
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direction, their determination. So, does this portion of 

what you've proposed regarding regulation, enable 

Virginia to do this, or does it, fundamentally change 

their right to address it in this way as a state?

MR. MARTIN: I'm sorry, are you 

talking about what we've done in (three)?

MR. ANDERSON: Yes. Regarding the 

language regarding that. Yes, exactly.

MR. MARTIN: Well clearly, we've 

eliminated these exemptions because we believe that that 

state should look at these institutions and that these 

exemptions that have been in place shouldn't continue 

beyond 2030. So, we've offered the off ramp for that. 

So I'm not sure the context of your question beyond, you 

know, do we feel that that limits states? No, we don't.

MR. ANDERSON: So, Virginia can't 

make that self-determination to handle it in that manner 

anymore then as far as what the Department is saying? 

They can't say you're going to be authorized like this, 

or you're going to participate in a reciprocity agreement 

that we're a member of, and we've agreed to the terms 

They can no longer approach it in that bifurcated manner 

that they choose to as a state?

MR. MUSSER: Greg, can I jump in real 

quick? I want to clarify something with Rob. You're 
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actually referring to the language in the definition of 

the requirements for a state authorization reciprocity 

agreement. Correct? We're not talking about.

MR. ANDERSON: No, exactly. And I'm 

trying to see if these are put together or if it's 

separated. You know, exactly what's being referred to 

here. Because it could either be a nothing burger or it 

could be a big deal.

MR. MUSSER: So, I actually think we 

probably would want to take a look at the exact language 

before we opine on whether the wording as it's currently 

stated in the proposed language would affect the state's 

ability to do what you're suggesting, Rob. So would you 

mind putting it in the chat and we'll take a look at it 

and see if we can get back to you on this maybe after 

lunch. Would that be okay?

MR. ANDERSON: Oh, yeah. Absolutely, 

absolutely. I'm just trying to see how it intertwines or 

doesn't. Yeah. Thank you.

MR. WAGNER: Thanks, Rob. Barmak, I 

see your hand.

MR. NASSIRIAN: This is a comment on 

Rob's observation here. I just want to clarify that 

nothing in this regulation intrudes on the state's rights 

to pass their own laws as they see fit for their own 
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purposes. What we are talking about is what the Federal 

Government's requirements are for participation in Title 

IV. There's a statutory basis in federal law, for state 

authorization. And the Federal Government has the right 

to articulate what kinds of state authorization are 

acceptable to it. So, I just want to make sure that 

there is no confusion as to whether the Federal 

Government in regulating this issue is in any way 

constraining Virginia's decisions for Virginia's purposes 

on how it wants to authorize institutions. That's one 

point. The second point, I am just kind of confused with 

the language in (three). What I'm hearing is that the 

intent is to ensure that none of these conditions obtain 

after 2030. That's the way John kind of asked that 

question. So, I just want to make sure I understand, is 

this proposed language intended to say, for example, in 

romanette three, that states may not collapse state 

authorization onto accreditation or is it saying that if 

they pass a law by 2030 that they can collapse state 

authorization by delegating it to a recognized 

accreditor? Is that question clear?

MR. MARTIN: I'm not sure exactly 

what you mean, Barmak.

MR. WAGNER: Denise, go ahead.

MS. MORELLI: I think I understand 
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Barmak and we're trying to phase out the exemptions, so 

if you have better wording, please provide it. This is 

what we came up with. So, it's not for them to pass a 

new law to do the exemption over again. That's not the 

intent. I think that's what you're asking.

MR. NASSIRIAN: So, in plain English. 

And we can work on the language but in plain English.

MS. MORELLI: Correct.

MR. NASSIRIAN: After July 1, 2030, 

the state cannot simply declare an institution authorized 

based on accreditation.

MS. MORALES: Accreditation or years 

of business. And the other ones, yes.

MR. NASSIRIAN: Sound policy. Thank 

you.

MR. MARTIN: It does. But it is that 

we provided the off ramp to that but that is the ultimate 

[inaudible].

MR. WAGNER: Denise, do you have 

anything to add? No, okay. I see Robyn, your next, go 

ahead.

MS. R. SMITH: I just want to ask. I 

am curious about how this subsection (three) is modified 

or related to subsection (d). So, I guess you'll be able 

to answer that when we get to (d). But it seems like 
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there's some disconnect between the two and just curious 

how they relate. For example, does subsection (d) modify 

the requirements of (3)(i)? But we can wait until we get 

to subsection (d), that might help.

MR. MARTIN: Yeah, when we go over 

subsection- I think we can look at these independently 

for now, but we'll get to subsection (d) and then go 

through that. So, you know, when we look at that, we can 

discuss anything you want too there.

MR. WAGNER: Okay, Jamie. You're up.

MS. STUDLEY: My question goes back a 

step to the 2030 proposed change. This uses the word 

state action exempts. The other day we had a few other 

possible categories. I would read this to say that this 

is an effort to prohibit the state from exempting, but 

that it still might do something else with that 

information. It could draw on the fact of it could 

weigh- it could determine whether it's, well, I guess 

I'll put it as a question. Could it look at 

accreditation and say, this answers the questions that we 

have about whether we want to approve this institution to 

operate in this state? And we don't need to make them go 

through the same exercise if we have confidence in that 

information. It may be something other than an 

exemption, but they continue to determine whether it gave 
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them the information that they wanted and use that as 

part of its consideration?

MR. MARTIN: The purpose here is not 

to let states pass off their responsibility to look at 

these programs. So would it be possible for states to 

stand up other ones that are?

MS. STUDLEY: Well, what I was trying 

to say was, could they say we will accept the same 

material? We will use that to answer some of the 

questions that we have about whether an institution 

should be allowed to operate here, and we will use the 

data provided to take into account in making our 

determination. So, it's not an exemption from attending 

to but could be an efficient way to answer the state's 

questions. I think the answer is the state gets to 

decide, but I'd like to hear the Department say it too.

MR. MARTIN: Yeah. Well, obviously I 

would say the state gets to decide, but are you proposing 

a specific language here to clarify this or to put?

MS. STUDLEY: No, at the moment I'm 

just trying to understand the intent and scope of this 

language.

MR. MARTIN: Well, the intent here is 

these are existing exemptions not later than July 1, 

2030, a charter statute or constitutional provision or 
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other action issued by an appropriate state agency or 

state entity establishes the institution by educational, 

institutional authorizes it to operate. And here you're 

talking about (three) not later than July 1, 2030. The 

state action exempts the institution based on the 

institution's accreditation for one or more accrediting 

agencies. So, I mean, I think it's pretty clear there 

that we're saying that exemption exempts it based on the 

institution's accreditation by one or more agencies is 

going away. They can no longer do that. Can the state 

use information, you know, from that process to make its 

own determinations? I would imagine, yes. But I thinkI don't want to think we'd have to look at specifically 

what kinds of things you're asking Jamie, if you have 

examples of that you can provide to us so we could 

provide a little more detail there.

MS. STUDLEY: I think it's a question 

of what the states want to do to reach the determination 

that they have to make, but I'll think about it some 

more. Thanks.

MR. MARTIN: Okay. And if you have 

language, please put it in the chat so we can take a 

look.

MR. WAGNER: Thanks, Jamie. Jillian, 

I see your hand. Go ahead.
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MS. KLEIN: Thanks. Good morning. I 

know, related to the education-specific laws, I think, 

Greg, you asked for maybe feedback or that's an open 

conversation. But I would like to better understand, I 

guess, from the Department's perspective, what it is you 

mean by that phrase, not being an expert in this space 

exactly but I interpret education-specific laws as it 

could involve laws that apply to students, teachers, 

public systems, private systems, sort of, you know, pre-K 

through post grad. It's very broad. So, I know you 

asked us the question, but can you start by outlining how 

it is exactly the Department thinks that this applies 

within this section?

MR. MARTIN: You know, right now, I 

mean, you see our proposed language and we'll look at the 

proposed language when we get to reciprocity agreements. 

Indeed. The Department is not taking an absolute 

position here, with respect to what that is. I think 

that we're looking at that phrase education-specific as 

being able to encompass a variety of things. So, if 

we're going to place some more parameters around that, 

you know, we want to gather from negotiators what those 

might be. I mean, some, you know, some examples might be 

higher education related to recruitment laws, 

requirements related to institutional finances. So, I 
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mean, trying to reach something besides the broad term 

education-specific laws. The Department doesn't have a 

steadfast position right now is exactly what that would 

mean. So that's why we're reaching out to you to see if 

you have feedback on it.

MS. KLEIN: I don't know if this is 

allowed. If I can ask Carolyn maybe her perspective of 

what she meant by that phrase, since it sounds like the 

Department just borrowed it. I don't know, I'm just 

trying to have a conversation about what exactly we're 

talking about before I make a broader comment. Can I ask 

Carolyn or Barmak or either of you?

MR. NASSIRIAN: Carolyn.

MR. WAGNER: Carolyn, would you? 

Okay. Thanks. Barmak. Carolyn, go ahead.

MS. FAST: Absolutely. So, when we 

were looking for language about this, we were concerned 

with the fact that, reciprocity agreement, the current 

one that the states are now involved in permits states to 

enforce their general purpose consumer protection laws, 

but prohibits them from enforcing, anything else. So we 

use the term education-specific, because a lot of states 

have determined that it's important to protect their 

students against risks posed by predatory or in some 

cases, financially unstable institutions by a number of 
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different types of laws, some of which are outlined 

really helpfully in Robyn Smith and Libby Webster's paper 

that was provided. And these include things like, 

education, specific deceptive practices laws that provide 

for specific content that is prohibited by educational 

institutions, like, for example, pretending that they're 

affiliated with the military when they're not, or 

pretending that they're a government agency when they're 

not, or, you know, guaranteeing 100% placement rates when 

they don't have that or things like that. So those are 

the types of laws that are important to protect students. 

And right now, states are impeded in their ability to 

enforce those types of laws by the fact that they are 

prohibited from doing that with respect to out-of-state 

schools that are operating in their state under the 

current SARA guidelines. So, it's an issue of making 

sure that students are able to be protected and also that 

there's not different standards that apply to different, 

students enrolled in online programs. And the kinds of 

things that we're talking about are very wide-ranging. 

Anything from like state requirements related to 

withholding transcripts to disclosure requirements to 

help students understand what completion rates are and 

placement rates are at a particular school. There's 

really a whole slew of protections that right now states 
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are unable to provide to their students. And feel free 

to jump in anyone if I've forgotten or mis-said anything.

MS. KLEIN: No. I think, 

directionally, I think that's helpful. I would just say, 

I made this comment last month, so I'm sorry to be 

duplicative, but I'll say it again anyway, which is some 

of those things that you listed off actually did get 

codified by some of you, in fact, maybe you were part of 

that Carolyn. When you wrote the rules that go into 

effect, I think, in July around, things like 

misrepresentation, precipitous closures, pain and 

distress, those things are already about to be 

requirements for out of state institutions anyway. 

There's something in there about transcript withholdings. 

Institutions are already subject to the general-purpose

laws that cover things like misrepresentation. So, I 

just think it's important. I think Greg's answer 

highlights it's important to be really specific about 

what we see as the outstanding risk or issue that hasn't

already been addressed through general purpose laws, or 

is about to be in effect in July with the rules that I 

think many of you were there and wrote them with the 

Department. I understand you probably wrote the word not 

thinking the Department would take it without putting 

some definition around it, but using sort of a broad 
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education-specific law phrase which literally can involve 

like preschool students, teacher- like, you know, K-12 

teachers, etc. to make sure that institutions understand 

what the requirements are too.

MS. FAST: Well, I don't think we 

have to worry that we're being overly broad and worrying 

about the things that have to do with kindergartners or 

something like that obviously doesn't apply. 

MS. KLEIN: It obviously doesn't 

apply because it says education-specific, I mean, so type 

of clarification, I guess, is exactly what I'm asking 

for, because as written, an institution that wants to 

stay in compliance would feel like they have to read it 

through a very broad lens.

MS. FAST: I think that we mean, 

well- a state couldn't enforce a law that has to do with, 

high schools, for example, against a postsecondary 

school, like, those laws don't apply to those schools, so 

that couldn't be enforced. So, I don't think that's an 

issue here. But perhaps Robyn or anyone else could weigh 

in. But I do not think that the problem was solved by 

the last round of negotiated rulemakings. Although the 

problem was raised. The protection is, very narrow. It 

doesn't address the issues that we have raised. And I'd 

be happy to talk in more detail, but I don't want to 
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overuse more of my time, so perhaps I'll jump back in 

later.

MR. WAGNER: Okay. Thank you. Let's 

see, Rob Anderson is back in. Go ahead, Rob.

MR. ANDERSON: Thanks so much. First 

of all, I want to respond to some of what Carolyn said 

because I think there's some fundamental differences in 

interpretations there. I do not see the states as being 

impeded because they have voluntarily entered into these 

reciprocity agreements. And as a part of that, it was 

agreed upon what items would be included. And when it 

has 49 states, you know, where clearly right now it could 

expand beyond. But we're talking about SARA and what 

exists. That actually raises the standards in 21 states 

who don't regulate out-of-state institutions. And those 

who chose to participate, it's not all their 

institutions, it's those participating in SARA chose too

willingly. They weren't forced. If they decided this 

isn't good for us anymore, they could cut bait and go 

find something that suits them in their state context 

better. So that's what I want to make as far as my 

initial observation on that, I think that's just a 

fundamental difference in how we view this. But, getting 

back to this general discussion of education-specific. 

One question that I did have in regard to these 
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agreements, and I guess around distance Ed, is the intent 

for education-specific to be covered by the home state 

authorization when the institutions participate in a 

reciprocity agreement?

MR. MARTIN: Could you elucidate on 

that a little more?

MR. ANDERSON: Yeah. So, this idea 

of home state and when it's covered. Is it covered, I 

mean, this idea of education-specific. Is it covered by 

the home state authorization when that institution is 

participating within a reciprocity agreement?

MR. MARTIN: Well, when we get to 

(d), we have not used education-specific in the 

reciprocity agreement.

MS. KLEIN: I think that his question 

is about (a)(1) romanette one, which is what I was 

speaking to as well, which I think does actually say that 

the institution is subject to every state's educationspecific laws. I'm sorry to jump in.

MR. MARTIN: Okay. Ensures the 

institution complies with the applicable state 

authorization or license requirements except as described 

in subsection three of the section and continues to meet 

a state's general purpose education laws. Are you saying 

does this apply- is this applicable to? Yes, the state 
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the school is operating in its laws or other states 

except under subsection (3).

MR. ANDERSON: And, you know, my 

concern again in some of this is what you get into, I 

think is, reciprocity quickly unraveling if you take 

these education-specific agreed upon items away. We have 

a policy process that allows states to raise concerns and 

try to raise what is called a floor, through consensus by 

the people who have agreed to participate in this 

reciprocity agreement. And when they agree, those 

standards will go up. But now it is where it is with 49 

states. Like I said, 21 states don't even regulate this. 

And so they're definitely [inaudible] out. One-third of 

states don't require accreditation for degree-granting 

institutions and SARA requires accreditation, state 

authorization in the home state and ensures this 

oversight. So, my concern is in search of the perfect, 

you're going to blow up what has been very solid for 

states and 49 states have jumped on board with as a best 

option. And we're going to be left wondering what's 

next? How do you hold this together?

MR. WAGNER: Dave. I see your hand 

up, go ahead.

MR. MUSSER: Yeah. Just for a 

moment, I want to offer a little bit of context around 
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the Department's inclusion of the education-specific 

terms and the reason that we wanted to bring this up for 

discussion with the group. If folks remember going back 

in history somewhat, in, well, before 2016 when the 

Department first negotiated this topic in the NPRM that 

we published following the negotiated rulemaking 

sessions, we had first proposed to require that all 

state's consumer protection laws be complied with if they 

entered into a reciprocity agreement. There was a lot of 

discussion in the community about the definition of 

consumer protection laws. It became a very challenging 

term to define because that could be defined in many 

different ways. So, the Department ultimately landed on 

language that essentially said that, the reciprocity 

agreement could does not prohibit any state that is 

participating in the agreement from enforcing its own 

statutes and regulations, including general rule laws and 

regulations and those specifically directed at a group of 

institutions or a subgroup of such institutions. I'm 

paraphrasing. That's not exactly the language. That 

language never went into effect. The following 

administration delayed it and then ultimately negotiated 

and regulated that the current language that we have 

today, which focuses on general purpose laws that apply 

broadly. What we really want to do today is understand 
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the breadth of different education-specific laws and 

regulations that states might want to enforce, even while 

a part of a reciprocity agreement. And I think that's 

the top part of our issue paper today. If we want 

feedback from negotiators about that. Number one, what 

harm could be done to students because states are 

choosing not to enforce those because their reciprocity 

agreement demands it, as well as what could be 

potentially harmful to the reciprocity process if states 

decided to enforce education-specific laws. So, I want 

to be sure it's clear that we didn't just include the 

concept of education-specific willy nilly. We want to 

have a discussion about that today, and that's part of 

what we're doing right now. So, I'll give up the floor 

now.

MR. WAGNER: Thanks, Dave. Robyn, I 

see your hand. Go ahead.

MS. R. SMITH: Sure. So first, in 

response to Jillian's question about the kindergarten. 

State higher Ed statutes, or state education statutes, 

very specifically describe which businesses are subject 

to their oversight. I think to deal with that question, 

I would insert the word applicable before or higher 

education-specific laws in (a)(1) little (i). Just to be 

clear that we're talking either about higher education or 
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applicable laws that are applicable to the institutions 

that come under Title IV. The second issue I want to 

raise is, you know, while SARA might provide a higher bar 

for some states, it significantly lowers the bar for 

others that have very strong consumer protections 

applicable to primarily for-profit school institutions. 

And in fact, it hamstrings the states that don't have 

those laws from enacting and enforcing new laws against 

what they may feel are predatory acts by out-of-state 

distance education institutions covered by SARA. So even 

if those states wanted to pass laws applicable to forprofit higher education out-of-state institutions, they 

couldn't under NC-SARA. As far as blowing up NC-SARA, I 

think there are potential alternatives. We know NC-SARA 

is the only game in town now, but there are other ways to 

do reciprocity. In fact, in 2013, the states themselves 

were working on coming up with a reciprocity agreement 

that would have allowed for states to accept the approval 

of other states, but still required them to comply with 

the higher education-specific consumer protections in 

state higher Ed laws. And that was cut off because NCSARA sort of came into town and ended up getting passed 

by all the states. I also want to push back on the idea 

that states voluntarily accepted NC-SARA. Yes, they all 

complied, they all signed on, but one of the reasons is 
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that institutions have a lot of lobbyists. They have a 

lot of money to go to state legislatures and ask for the 

passage. Students and consumer advocates don't have that 

kind of lobbying money, and we don't have a significant 

presence in other states. So, in that process, 

essentially, the views and concerns of states, of law 

enforcement and of students weren't really heard. And it 

was happening really before anyone was paying attention. 

So I want to push back on this idea that things can't 

change, that states might want to change how they are 

members of SARA and [30 seconds] what the SARA provisions 

are and I want to note that it's very hard now for states 

to withdraw from NC-SARA, because if they do and there's 

no alternative, suddenly all of their students are not 

eligible for Title IV funding that are in these 

institutions. So, it makes it very hard for states to 

withdraw. And so, they're kind of hamstrung at this 

point into staying in NC-SARA until an alternative is 

created. So that's all.

MR. WAGNER: Okay. Thanks, Robyn. 

Carolyn, go ahead.

MS. FAST: I just wanted to respond 

quickly to the sort of the point that was made that NCSARA or SARA essentially has its own consumer protections 

that replace what the states could be doing to protect 
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students. Unfortunately, there are very, very weak or 

practically nonexistent requirements. So, for all the 

ones that are supplanted in states with strong laws, 

there's not an alternate sort of rule that would come 

into effect to protect students. And that is a serious 

concern that could be fixed if SARA had stronger consumer 

protections. And I believe that when the states 

initially got together, when the state regulators were 

getting together to work on and envision what a 

reciprocity agreement would be like, there was an idea 

that there would be a high consumer protection standard. 

But unfortunately, that didn't happen. And, although 

there's been efforts to try to increase the floor, so to 

speak, at NC-SARA, so far those have been very 

unsuccessful, in my view, and leaves a lot of students 

potentially subject to predatory behavior.

MR. WAGNER: Thank you, Carolyn. 

Diana, go ahead.

MS. HOOLEY: Thank you. I want to 

respond first to the idea that, you know, there are the 

general consumer protection laws. And, you know, 

certainly, those are important. They are, necessarily 

very broad in nature, right? Because they need to be 

able to respond to all kinds of new businesses, new 

tactics. And I think as state attorneys we've been in a 
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unique position where we've been investigating for-profit 

schools in this area for over a decade now and have had 

an opportunity to know exactly how students are being 

taken advantage of. It allowed us to in Massachusetts, 

and I know other states have done this as well, to 

promulgate specific regulations that were targeted to the 

types of behaviors that left so many students burdened 

with substantial debt, that we now have seen, you know, 

resulted in billions of dollars in student debt relief. 

But then, you know, that impacts the taxpayer. So, I 

mean, I just want to make a fine point on that is the 

general-purpose laws are great, but the specific laws 

that we've been able to enact, and that we are prohibited 

from using under the reciprocity agreements. Those are 

the most important regulations that we have in this area. 

You know they serve two purposes, right? Like, they can 

prevent the misrepresentations because it puts schools on 

notice of how they're supposed to be behaving. But it 

also informs students and gives them a much better 

picture of what it is that they're signing up for. So 

again, the specific regulations are incredibly important 

in this area. I had another point, but I'll just stand 

on that for now and I'll jump back in.

MR. WAGNER: Thank you. Barmak, go 

ahead.
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MR. NASSIRIAN: Some observations on 

this. One of which is just an admonition to all of us 

that the purpose of these regulations is not to address 

any particular reciprocity agreement. It is to address a 

kind of broadly acceptable, federally acceptable 

reciprocity agreements. In policy, you very often kind 

of make the mistake of thinking that just because there 

is a certain way that things are today, that that's 

somehow the only way they could be. And it's important 

for us to remember there could be many different 

configurations of reciprocity arrangements. There is 

significant truth to the observation that SARA emerged 

out of a concern that the vast majority of institutions 

didn't have the resources to go to every state and get 

authorized. And this was supposed to be a device of 

institutional convenience at a time when most traditional 

institutions were perceived to be at a disadvantage. I 

think we need to kind of evolve in the direction of a 

well-ordered policy. I want to make sure the Department 

contemplates what the dynamic would be if we began to 

[inaudible] parse the difference between this kind of 

education-specific law versus the other. Because what 

would happen over time is that you would put in state 

institutions that are subject to the totality of a 

state's laws at a significant enough disadvantage that 
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they would begin to internally lobby for a race to the 

bottom, to level the playing field against out-of-state 

providers. So, it is critical that the Department view 

the state regulators as its allies, attempt to direct 

funding to them and create as much of a robust authority 

for them to do their jobs for the purpose, not only of 

overseeing out-of-state providers but their own. Because 

otherwise, we end up, as I said, in a race to the bottom. 

So that's just my general observation. Now I'm going to 

get obsessive with my English, a second language deficit 

and go back to the language to romanette three, which I 

was having such a hard time grasping. This is subsection 

(three) romanette three. I now see how the Department is 

reading it, but I just want to point out, when you say 

not later than July 1, 2030, a state action exempts the 

institution. I just want to make sure it's understood 

that it's not that if the state takes action prior to 

July 1 of 2030, it can perpetually exempt institutions. 

So, it should be something like, current state action 

exempts the institution, you know, no later than 2030. 

For what it's worth. Thank you. That should also apply 

to romanette two somehow. I don't have as clean of a 

solution for that one.

MR. MARTIN: We'll look at the 

language.
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MR. WAGNER: Thanks, Barmak. I see 

everyone's hands. Really quickly, I just wanted to 

announce that Magin Sanchez will be in to comment. But 

Erika is up next, so I'll go to Erika.

MS. LINDEN: Thank you. I have 

several comments I'd like to share. One is- but for some 

questions, this was to Barmak. In your initial comments, 

you used the phrase mega schools. And I guess I'd like 

to understand if some of the concerns you have are really 

focused at large players who are operating in multiple 

states from within just their own state and enrolling 

thousands and thousands of students, or are you 

considering that the problems are coming from the public 

schools in states that enroll students in other states?

I've been looking at the SARA data and for-profit 

schools, large for-profit schools represent less than 1% 

of the institutions that are part of SARA. So, I'm 

asking that question because I'm very concerned about 

throwing out the baby in the bathwater. If we have 

problem actors, we need to deal with problem actors 

without disadvantaging the students who are in those 

states who wish to exercise options by using educational 

programs outside of their state of residence, which SARA 

enables us to do as a smaller school. So, I really want 

to understand your objections to Carolyn's point about 
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the for-profits. Is that where the problem lies? How 

can we help? If that's the case, how can we continue to 

support the other schools, the other 92% of schools that 

are part of SARA in being able to take advantage of the 

benefits that SARA provides? And I'll stop there.

MR. WAGNER: Okay. Thank you. Just 

before I get to Robyn, who's up next, just wanted to 

announce Zack Goodwin will be in for financial aid admins 

for the remainder of the morning session. Okay, Robyn, 

go ahead, you're up.

MS. R. SMITH: Hi. Thanks. A quick 

response to Joe who raises a valid concern. I think it's 

important to note that the higher education-specific 

state laws we're talking about do not apply to public 

colleges or public schools across the board. So, if this 

kind of provision was passed, at least under current 

schemes, they would not suddenly become subject to those 

higher education-specific state laws. I think the intent 

is that the states would still be able to decide who is 

and who isn't. And typically, those laws apply to the 

risky schools, which are primarily for-profit schools in 

most cases. So that's what we're really talking about. 

I want to respond to the idea that the general-purpose

laws are sufficient to oversee and take action against 

predatory schools. The problem is, that most state 
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agencies do not have any authority to impose or 

investigate or enforce UDAP laws, which are the primary 

laws against false advertising. They only have the 

authority to impose their higher education-specific laws. 

Sometimes the statute under which they operate allows 

them to use UDAP, sometimes it has a separate standard 

that's similar. But by precluding enforcement of higher 

education-specific state laws, you're essentially 

precluding state agencies from actually enforcing any 

kind of general-purpose state law because they don't have 

authority outside of their specific statutes. And that's 

really important for people to understand. Second, 

relying on AGs is really problematic because they don't 

have any statutory obligation to monitor higher education 

institutions, to take actions to investigate complaints. 

Those are all within an AG's discretion but not required. 

They are not a licensing agency. They can't- they don't 

monitor the conduct. They don't go to the institution 

and say, you need to fix this and fix that, or refund a 

student here and there. They are not that kind of 

entity, which is what state authorization contemplates is 

a licensing agency that can keep an eye on a school 

through an approval process, accept complaints, and is 

obligated to take actions which may range from revoking 

an approval to working with the school to address 
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problems so they can stay licensed. The AGs don't do 

that. If they take action, it's either to revoke a 

school's authority through a lawsuit or to try to settle 

the case. They aren't there to police the school and to 

take small actions to help the school stay in business or 

to respond to concerns. So, I just want to make sure 

it's understood that if you rely only on the general 

purpose laws, you're going to lack an on-the-beat police 

regulatory agency that can really take action as the 

problems are occurring. And as we have seen in the AG 

cases, when they do take action, typically after there's 

been millions of dollars, often of fraud for years and 

decades. And everyone knows who I'm talking about, ITT 

tech, I'm talking about Corinthian and I'm talking about 

multiple other schools. So, the AG solution is not a 

solution from a state authorization perspective. So, 

thank you.

MR. WAGNER: Thanks, Robyn. Just a 

couple of announcements before I get to John. Scott 

Dolan will be coming in for private nonprofits. And

Jesse Morales is back for primary students and borrowers. 

So, with that being said, John, you have the floor, go 

ahead.

MS. WARE: Yeah. Thanks. I 

appreciate the Department for considering these issues. 
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Although I just to clarify, I don't think it was in the 

proposal right now in the language that the Department 

has proposed applying requiring SARA to allow states to 

apply education-specific laws. That's not in the 

language related to reciprocity right now anyway, is it? 

I'm a little unclear on whether that first section 

applies to reciprocity or whether that's just the general 

section on state laws?

MR. MARTIN: That is a general 

section. So, I want to be clear about that. So, let's 

just read that again. Ensures the institution complies 

with any applicable state authorization or licensure 

requirements, any applicable would be anywhere the school 

operates, except as described in subsection (three) of 

this section. To go back to subsection (three) and we 

look at romanette three, the institution is an exemption, 

this is not one that sunsets, unlike the other two, 

right, the institution is offering a distance education 

program in that state under a state authorization 

reciprocity agreement as defined in 600.2. So, they're 

separate. And we will get to what's in the actual 

reciprocity agreement rules in 600.9 (d) later on.

MS. WARE: Okay. Yeah. I appreciate 

that clarification. So just a couple comments on the 

general reciprocity debate. You know, I think this whole 
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focus on state enforcement actions is a little bit 

misguided in that, as a practical matter, they rarely 

take place. And when they do, I mean, it's a long-drawnout process. So, I don't know that allowing states to 

take enforcement measures on their- I mean, I would look 

at California, for example. They're not in the 

reciprocity agreement right now. So, in theory, they 

could take any type of enforcement action against out-ofstate online providers that they thought were not very 

specific consumer protection laws. But as far as I know, 

that's not going on. So, I don't know that if we got rid 

of reciprocity or allowed states to enforce their 

education-specific laws, we're just going to see a big 

growth of enforcement actions. In my opinion, the bigger 

issue has to do with closure related problems. I think 

the Department identified this in their certification 

rules that just came out that said that institutions must 

certify that they are compliance with state laws related 

to closure, record retention, those types of things. I 

think as far as reciprocity goes, that would be a bigger 

issue for state protections that is in Ohio. I want to 

know that if a school closes in another state, that 

there's going to be some type of protection for Ohio 

residents who are attending that out-of-state 

institution. You know, because right now, some states 
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have bonds, some states have tuition recovery funds. So,

some states do have protections, but other states don't. 

So, like I said, I think that's a bigger reciprocity 

issue than the enforcement actions. And just one last 

comment, on something Robyn said is that one of the 

impetus for reciprocity was that states were applying 

for-profit regulations to out-of-state institutions that 

were seeking to be authorized. Under some state laws, 

those state institutions from out-of-state are 

essentially treated in the same manner as for-profit 

institutions. A heavy regulatory burden, in other words. 

Thank you.

MR. WAGNER: Thanks, John. Before I 

get to you, Magin, I just wanted to let people know that 

Emmett Blaney will be in for students or borrowers. 

Okay. Magin, go ahead.

MS. SANCHEZ: Yeah, I wondered about 

the point that John said in terms of closures, and I 

think it also goes in terms of enforcement as well. But, 

you know, I really do want to recenter the impact that 

these regulations have on students. And, you know, 

throughout this conversation, it reminds me of Stratford 

University. I live down the street, and every time we 

would go to mass, we would always go to this buffet 

after, it was across the street from Stratford 
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University. My first exposure to what college was. I'm 

like, okay, one day maybe I could go there, right? Fast 

forward, 20 years later, Stratford University closed 

abruptly, I believe 800 nursing students. It was a big 

deal here in local news, that their credits couldn’t 

transfer over. The school had tons of complaints in 

terms of their NCLEX. That exam, certification exam, it 

was, I believe like a 50%, 52% passage rate. It was 

better than the groundhog, but still slightly around the 

rate of a coin. Right? And so, it was a lot of troubles 

there with that system and they got investigated for 

operating programs overseas, yadda yadda. The point 

being that they had so many problems that when their 

accreditor, ACICS closed down they couldn't find another 

one. [Inaudible] how many problems they had. And I 

think this kind of goes into our conversation today. You 

know, I appreciate the back and forth in terms of what we 

see as a vision for reciprocity and the role enforcement 

and what it has. But, you know, I think it's very 

important also for my constituency to keep in mind the 

role and the impact on students of color, right? My 

hometown, we're a predominantly Latino and Black 

community and on the impacts of these communities, it's 

so important that we have these measures in place because 

it's these students, the ones [inaudible] who are stuck
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and have tons of that horrible life outcomes, that if we 

don't take seriously, these complaints that are impacting 

schools like Stratford, etc.. I do worry about what 

impacts down the road this can have - impacts these are 

already having. And so, I think it's important to keep 

that in mind as we have this conversation. Thank you.

MR. WAGNER: Thank you, Magin. Real 

quick, just want to make a quick announcement. There are 

several hands up. I just wanted to let everyone know 

that we're going to hear from those who have their hands 

up. They're currently raised because we're approaching 

the lunch break at noon. It's 11:50 Eastern. So, Jamie, 

take it away.

MS. STUDLEY: Thanks. I'll be brief. 

We're all looking ahead and trying to think, how we could 

get value from reciprocity, while maintaining and 

promoting quality at the same time. One thing we might 

want to think about, and I'd be interested in hearing 

whether there are any suggestions. We heard the phrase 

“increasing the floor at NC-SARA.” I wonder whether 

there's anything that can be done in the way of 

encouragement or incentives or, whether this is an 

evolving area. It certainly seems that NC-SARA is 

evolving, in that direction. And whether there's 

anything in the regulations that there's a danger of 
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stifling that could be done affirmatively in that regard?

And then as I try and think about what the consequences 

are, and there are a set of positive possible 

developments, there are, other ways that the reciprocity 

space could develop. There's also the possibility that's 

been suggested of changing SARA to the point that it was 

not feasible. And I simply want to mention, partly from 

conversations with institutions in California, that have 

been thinking about our state's particular situation. It 

is the smaller institutions or specialized or the nonmega or whatever non-mega is or institutions with 

specialized, small-scale programs that want to reach 

students who want them, but who cannot go through the 

full-scale exercise of getting approval in each state. 

If NC-SARA were not there, some people have speculated 

that the effect would be that people for whom this is a 

major enterprise, would find their way to every state and 

have the facilities and capacity to do that. It's the 

smaller institutions. Many of the public institutions 

had asked us here in California, what could be done. 

They were the ones who most need the efficiency and 

registration, and coordination support that's provided by 

a reciprocity agreement. So, I think we should try and 

think about the intended consequences and the possible 

risks. And where [30 seconds] would. Thank you.
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MR. WAGNER: Thanks, Jamie. Go 

ahead, Scott.

MR. DOLAN: Yeah. I just want to go 

back. I know it's a little bit of a rehash to the 

conversation we had earlier, but, you know, I think in 

order for us to have an informed conversation, and one 

that we can all share around where the greatest risks, I 

think we do need to further define education-specific. 

Because I've heard a number of issues raised and concerns 

about limits on state's ability to protect students that 

reside in their state. But the examples that are used 

are already covered under consumer protection laws within 

the SARA agreement. So, veracity of recruitment, 

accuracy of job placement, complete and accurate 

admission requirements for courses and programs. I think 

if the goal was to really build a better floor for 

reciprocity agreements, let's be specific about what 

areas there is the greatest risk so that we can have an 

informed conversation about what tactics and strategies 

that we might use to address it. In absence of that, 

we're using blanket language that we all think we agree 

to. But it's very clear from our discussion here that 

there's not a lot of clarity in terms of what we're 

talking about, what the potential impact that might be, 

not only on institutions but more importantly, on 
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students. So, you know, maybe further defining this. 

And I see Carolyn your hands up. Maybe, you can address 

that as we're talking.

MR. WAGNER: Thank you, Scott. 

Emmett, you're up next.

MR. BLANEY: Yeah. Thank you. I 

just wanted to respond. One, in support of Magin's 

comments on the specific examples that he shared of 

students not being protected by NC-SARA, in response to 

the comment that was just made that says that NC-SARA has 

protections for students and consumers. I wanted to 

share some additional examples on NC-SARA's failures to 

protect students and borrowers, the constituency that I'm 

representing. So, the Center for Excellence in Higher 

Education, which operated Independence University, 

Stevens-Henager College, which is also a specific 

example, they had a location in Denver, which is where 

I'm situated, closed in 2021 abruptly. But this was not 

a surprise to people who were paying attention. The 

school had been facing litigation by the Colorado 

Attorney General for consumer protection violations for 

years prior and was on probation for misleading 

advertising, recruitment, and academic outcomes months 

before the closure, which was just mentioned as being 

protected. But when the accreditor pulled its approval 
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of CEHE in April of 2021, the school began to spiral 

towards an abrupt closure. The closure was handled very 

poorly. Confusing and poorly planned information for 

students that the Department actually had to take an 

unprecedented, unusual move of stepping in to review 

transfer options that were being offered to students so 

the school couldn't keep putting undue pressure on 

students to take a transfer. 25 state AGs wrote to the 

Department at the time. NC-SARA's policies kept states 

from taking action to protect students at CEHE schools 

even when the school lost a lawsuit. So, as the AGs 

noted, NC-SARA did nothing to protect students or 

taxpayers, no bond or letter of credit, no disclosures to 

students, no teach-out planning. This shows obviously 

huge shortcomings of a reciprocity agreement designed to 

make oversight lighter for schools rather than protecting 

students. So, again, more specific examples of how it's 

failed and why I'm so strongly in favor of the language 

the Department put forward that would allow states 

participating in a reciprocity agreement to enforce their 

laws and protect their residents from predatory practices 

and institutions. Thanks.

MR. WAGNER: Thanks, Emmett. 

Jillian, go ahead.

MS. KLEIN: Thanks. So this is back 
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to an earlier comment, but I had to wait in line. So, I 

think now twice Greg has been asked the question about 

the start of the state authorization section and how we 

are to understand education-specific laws with respect to 

reciprocity. And his answer both times has not been my 

understanding of what's written here. So, I'm not sure 

if we can bring the language up, but I have a drafting 

suggestion if his answer is actually what's intended by 

the Department, which I don't think Barmak or Carolyn or 

anybody else actually agrees with. But I think it's 

important to make sure that we're all on the same page in 

terms of what we're talking about. Because I think John 

and others have asked this question and been given an 

answer that reciprocity institutions under reciprocity 

agreements would be exempted from these laws. And that 

is not the way that the language is written. So, I'm not 

sure if somebody can bring up the start of 600.9? And if 

Greg's answer is right, then I'm sorry I got fighty last 

time. But I don't think it is with all due respect. So 

there's an and before continues so my reading of this and 

tell me if I'm wrong, because I'm not a lawyer. My 

reading of this is that the institution has to comply 

with state, like registration requirements, unless 

they're in a reciprocity agreement and then that's 

handled through NC-SARA. Also, even institutions 
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operating under reciprocity agreements have to meet 

state's general purpose and because we talked about that 

earlier, general education laws and regulations. So, my 

understanding is that the second part of that statement 

applies to institutions operating under a reciprocity 

agreement. Twice, Greg has said that that's not what 

this language says. So, I just want to be super clear on 

what the Department's intention is here and what we 

should be responding to, because I think John's answer 

would have been different, given a different answer.

MR. MARTIN: I'll take that back and

come back to you with an answer after lunch. I want to 

make certain that what it says is absolutely exactly as 

we intend it. So that's a good point.

MR. WAGNER: Just really quickly, I'm 

gonna let Denise weigh in. I do see Robyn and Carolyn's 

hand up but we're coming up to the noon time break. We 

might want to start right off when we come back, and 

you'd be first to speak. So. Denise, go ahead.

MS. MORELLI: Greg already got it. 

So, we'll be back.

MR. WAGNER: Okay. Well, we're 

coming right at noon, so if you don't mind, we'll pick up 

with Robyn and Carolyn right after the lunch break. It 

is noon, so we will be taking a break and we can continue 
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the discussion. And thanks everyone for participating. 

Have all the participants join back probably ten minutes 

before, 1:00 Eastern. Okay?
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Zoom Chat Transcript

Program Integrity and Institutional Quality- Session 2, Day 2, Morning, February 6, 2024

*Chat was copied as presented, as a result minor typos or grammatical errors may be present.

From Krystil Smith | FMCS Facilitator to Everyone:

Good morning - please remember the naming convention. P or A, Your Name, Your 

Constituency group

From P, Jessi Morales, Students/Borrowers to Everyone:

Emmett will be coming on camera as I have to step away for a second.

From P, John Ware, State Regulator to Everyone:

My alternate colleague Rob Anderson also has some thoughts on this issue.

From P, John Ware, State Regulator to Everyone:

My alternate Rob Anderson has a comment on education specfic

From P - Erika Linden, Private Nonprofit Institutions to Everyone:

Plus 1 to Jillian

From (A) Zack Goodwin (he/him), Financial Aid Administrators to Everyone:

I would not see it as problematic simply to rephrase as 'postsecondary education related' 

instead of 'education related.'

From P. Jo Blondin, Community Colleges to Everyone:

Reacted to "I would not see it..." with ���

From P - Carolyn Fast, Civil Rights/Consumer to Everyone:

Reacted to "I would not see it a..." with ���

From P. JoEllen Price - Financial Aid Administrators to Everyone:

Reacted to "I would not see it a..." with ���

From A, Magin Sanchez, Civil Rights/Consumer to Everyone:

Reacted to "I would not see it a..." with ���

From P - Erika Linden, Private Nonprofit Institutions to Everyone:

Agree with Rob's concerns about interpretation

From A, Emmett Blaney, Students/Borrowers to Everyone:

Reacted to "I would not see it a..." with ���

From (A) Zack Goodwin (he/him), Financial Aid Administrators to Everyone:

Reacted to "Agree with Rob's con..." with ��

From P. JoEllen Price - Financial Aid Administrators to Everyone:

Reacted to "Agree with Rob's con..." with ��
64

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From P, Jillian Klein, Proprietary Instit to Everyone:

I don't want to talk over everyone but I don't think Greg's answer is correct on the question 

Rob is asking.

From P, Jillian Klein, Proprietary Instit to Everyone:

600.9(a)(1)(i) is written to require institutions to be subject to every state's educationspecific rules.

From A, Scott Dolan, Private Nonprofit IHEs to Everyone:

Replying to "I would not see it a..."

Adding postsecondary to the language does not address the concerns being raised about 

the specificity. Important points raised by Jillian about the need to be clearer.

From (A) Zack Goodwin (he/him), Financial Aid Administrators to Everyone:

Replying to "I would not see it a..."

Very true! I did not mean to imply otherwise, and thank you.

From (A) Dom Chase - Business Officers to Everyone:

State governments made affirmative decisions to join SARA, they were not forced. If a state 

feels that its laws are not sufficiently applicable, it can choose to leave the SARA compact.

From A, Scott Dolan, Private Nonprofit IHEs to Everyone:

Reacted to "State governments ma..." with ���

From A Alyssa Dobson, 4 Yr Public Institutions to Everyone:

Reacted to "State governments ma..." with ���

From P - Erika Linden, Private Nonprofit Institutions to Everyone:

Reacted to "State governments ma..." with ���

From P - Erika Linden, Private Nonprofit Institutions to Everyone:

I strongly disagree with characterization that institutions "coerced" states.

From P. Jo Blondin, Community Colleges to Everyone:

and on the fact that education-specific laws won't impact K-12...dual enrollment...

From A, Emmett Blaney, Students/Borrowers to Everyone:

+1 to Robyn’s comments on inaccessibility for students to participate in the process to 

bolster student protections.

From (A) Dom Chase - Business Officers to Everyone:

Replying to "I strongly disagree ..."

I also disagree with this characterization.
65

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From P, DC, HBCUs, MSIs, TCUs to Everyone:

Reacted to "State governments ma..." with ���

From P, DC, HBCUs, MSIs, TCUs to Everyone:

Reacted to "I strongly disagree ..." with ���

From P - Carolyn Fast, Civil Rights/Consumer to Everyone:

Magin Sanchez is going to join the table to comment.

From P. JoEllen Price - Financial Aid Administrators to Everyone:

Zack Goodwin will be coming on camera as I have to step away. Be back after lunch.

From P - Erika Linden, Private Nonprofit Institutions to Everyone:

Scott Dolan will be coming table Private Nonprofits.

From A, Emmett Blaney, Students/Borrowers to Everyone:

Jessi Morales is back on as primary for students/borrowers.

From P, Jessi Morales, Students/Borrowers to Everyone:

Emmett is coming to the table

From A, Scott Dolan, Private Nonprofit IHEs to Everyone:

Erika will step back to the table

 
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