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From: Carolyn Fast, Negotiator for Consumer Advocates/Civil Rights

To: 2024 Negotiated Rulemaking 

Program Integrity and Institutional Quality Committee 

Date: January 8, 2024

Re: State Authorization Reciprocity Agreements - Proposed Regulatory Language

I. Proposal on Enforcement of State Consumer Protection laws:1

600.2 Definitions

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

waives State requirements and fees related to obtaining initial or renewed State authorization for an 

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

education through distance education or correspondence course to student located in other States covered 

by the agreement and cannot prohibit any member State of the agreement from enforcing its own generalpurpose or education-specific State laws and regulations outside of the State authorization of distance 

education.

Rationale: 

The proposed change to add “or education-specific” would ensure that States maintain authority to

enforce State education-related consumer protection laws, at their discretion, regardless of whether they

choose to enter into a reciprocity agreement with other States to streamline initial/renewed authorization. 

This is not a new idea, rather, it is a return to the reciprocity definition that was made part of the 

Department’s final rule during the Obama-Biden administration.2

It would enable States with strong

consumer protection laws to retain their authority to enforce these State consumer protection laws to

protect online students in their State who are enrolled in SARA-participating schools that are located in

other states.

Currently, SARA permits member States to enforce laws of general application, such as laws prohibiting

fraud and deceptive practices that apply to all types of businesses, but requires as a condition of joining 

the agreement that member States waive enforcement of all other State consumer protection laws that

apply to educational institutions, such as refund and cancellation rights, disclosure requirements, outcome

requirements, requirements related to debt collection, prohibitions on transcript withholding, laws related

to protection in the event of precipitous closure, laws providing students with a private right of action for

State law violations, laws related to specific types of misleading marketing of educational institutions, and

1 Note that throughout, the red text is the Department of Education’s proposed language, and blue text is our 

suggested language.

2 See 81 Fed. Reg. 92262, available at https://www.govinfo.gov/content/pkg/FR-2016-12-19/pdf/2016-29444.pdf

(Defining a State authorization reciprocity agreement as an agreement that “does not prohibit any State in the 

agreement from enforcing its own statutes and regulations, whether general or specifically directed at all or a 

subgroup of educational institutions.”) 
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others, with respect to students in the State that are enrolled at SARA schools located out of state. This 

leaves some online students vulnerable to predatory conduct. 

The above proposal would also add the phrase “waives State requirements and fees related to 

obtaining initial or renewed State authorization” to the definition of a reciprocity agreement. This 

addition would clarify that the reciprocity agreement specifically waives the State requirements and fees 

for initial or renewed State authorization. 

II. Proposal on Governing Body composition: 

600.2 Definitions

* * *

If a State authorization reciprocity agreement is administered by an organization, the governing body of 

such organization must consist solely of representatives from States, including regulatory bodies, 

enforcement agencies, attorneys general offices, and licensing bodies. A State authorization reciprocity 

agreement may also appoint an advisory board that includes, and members of the general public. Public 

members must be separate from and independent of States, institutions, and accrediting agencies, and 

must not be:

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

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

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

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

agreement; 

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

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

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

the Department of Education and accrediting agencies. 

Rationale: 

Reciprocity agreements are agreements between States wherein States agree to establish joint standards 

for regulated institutions. Such decisions about standards for regulated institutions are appropriately 

reserved to State agencies and individuals who represent States agencies. Such agencies and individuals 

are accountable to State lawmakers, State officials, and/or State voters. Standard-setting for regulated 

institutions should not be delegated to individuals or entities that are not State agencies or representatives 

of State agencies, who are not accountable to State lawmakers, officials, or voters. Accordingly, 

members of the public should not be given authority to set standards for regulated institutions or to set 

requirements for State or institutional membership in a reciprocity agreement. Members of the public may 

have valuable information or perspectives to share in a nonbinding capacity via membership on an 

advisory board. 
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III. Proposal on Delegating Authority to Non-State Actors [see highlighted language below]: 

Note: Relevant language for this proposal appears highlighted below.

600.2 Definitions

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

exempts an institution located and legally authorized in a State covered by the agreement from State 

requirements and fees related to obtaining initial or renewed State authorization to provide postsecondary 

education through distance education or correspondence course to students located in other States covered 

by the agreement and cannot (a) prohibit any member State of the agreement from enforcing its own 

general-purpose State laws and regulations outside of the State authorization of distance education, (b) 

prohibit any member State of the agreement from enforcing its own education-specific State laws or 

regulations, unless the State publicly lists any waived laws or regulations; or c) delegate the authority to 

set standards or make determinations related to eligibility for State or institutional participation in the 

agreement to any individual who is not a representative of a member State agency or to any entity that is 

not exclusively composed of representatives from member State agencies.

Rationale: 

This proposal addresses an existing flaw in the SARA agreement. SARA policy currently delegates 

decision-making power to the NC-SARA Governing Board, giving the Board power to veto any proposal 

to strengthen consumer protection standards or make any other policy changes related to State or 

institutional eligibility requirements. However, there are no guidelines in place to ensure that the Board is 

composed of representatives of the member States. The Board is currently composed not solely of 

representatives of member States, but also representatives of regulated institutions and other individuals 

who may have conflicts of interest. The Board also includes some other individuals who do not represent 

a member State and are thus not accountable to any State lawmakers, officials, or to State voters. 

Currently, SARA policy also provides some limited decision-making power to the NC-SARA President, 

who is not required to be a representative of a member State.3

 Delegating standard-setting or decisionmaking authority to an entity or individual that is not a representative of a member State agency is 

problematic because it potentially constrains States’ power to act on behalf of students in their states. 

Accordingly, reciprocity agreements should be prohibited from delegating authority over regulatory 

decisions to non-State actors. 

3 Specifically, the NC-SARA President has authority under the SARA Policy Manual to overrule a 

member State’s decision to extend “provisional status” (i.e., probationary status) to an institution beyond 

a certain specified time-period. See SARA Policy Manual, 23.1 § 3.2(d)(4).
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IV. Proposal on Reciprocity Agreement’s Consumer Complaint Process: 

600.2 Definitions

Note: Relevant language for this proposal appears highlighted below.

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

waives State requirements and fees related to obtaining initial or renewed State authorization for an 

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

education through distance education or correspondence course to student located in other States covered 

by the agreement and cannot prohibit any member State of the agreement from enforcing its own generalpurpose or education-specific State laws and regulations outside of the State authorization of distance 

education.

* * *

A State authorization reciprocity agreement must permit member States to, at the State’s discretion, 

accept, investigate, and/or resolve complaints about an institution of higher education that have not yet 

been submitted to and/or resolved by the institution of higher education. 

Rationale: 

Consumer complaints are a crucial mechanism for alerting regulators about problems at regulated 

institutions. However, under the largest current reciprocity agreement, States are sometimes precluded 

from access to this information. Currently, the SARA Policy Manual requires that students first submit a 

complaint to their school and exhaust all remedies with their school before the student is even permitted 

to submit a SARA complaint4 to a SARA state portal entity for investigation. As a result, it is not clear 

that State regulatory agencies in SARA member States have discretion to accept, investigate, and/or 

resolve a SARA complaint before the student has exhausted remedies through the school’s complaint 

process. This exhaustion requirement hampers regulators' ability to timely obtain critical information 

about what is happening at regulated schools. The exhaustion requirement also creates an added hurdle 

for students. 

The exhaustion requirement may play a role in the extremely low number of SARA complaints reported 

for SARA institutions. For example, in Arizona, where the SARA website shows that there are over 

300,000 online students enrolled in SARA schools,5 SARA’s website reports that there have been zero

SARA consumer complaints from SARA students at Arizona schools in 2023.

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 State reciprocity 

agreements must not prevent States from - at the State’s discretion - accepting, investigating, and/or 

resolving consumer complaints without first requiring the student to exhaust remedies at the school. 

4 Pursuant to the SARA Policy Manual, a “SARA complaint” is a complaint “resulting from distance education 

courses, activities and operations provided by SARA-participating institutions to students in other SARA states.” 

See SARA Policy Manual 23.1 § 4.1. 

5 See NC-SARA Data Dashboard, https://www.nc-sara.org/data-dashboards. 6 See NC-SARA Complaint Reports Dashboard, https://nc-sara.org/complaint-reports-dashboard.