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Education Dive
A new state bill could challenge key interstate distance learning pact
Legislation in Maryland stands to test the limits of new state
authorization rules and an agreement that lets colleges offer online
programs in other states.
Jeremy Bauer-Wolf
March 4, 2020
The U.S. Department of Education frustrated consumer advocacy groups
last year when it issued new federal rules concerning the state
authorization of distance learning providers.
In the final regulations, the agency deviated from federal negotiators'
initial consensus in at least one significant way: States participating
in agreements allowing institutions based in other states to offer
distance education for their students could no longer enforce certain
laws.
States that are members of these reciprocity agreements can still
administer "general-purpose" laws and regulations. But the new rules
removed language that allowed them to also enforce laws that target a
"subgroup of educational institutions." That could include online
institutions, particularly for-profit schools, which have come under
fire from states for defrauding students.
Every state but California is a member of the only national reciprocity
agreement between states on distance learning authorization, the State
Authorization Reciprocity Agreement (SARA). That means when the
regulations take effect in July, most state laws pertaining to distance
learning will be effectively unenforceable.
But one state, perhaps unwittingly, may provide an early test of the
boundaries of the federal rules and the policies of NC-SARA, the
organization that governs the reciprocity agreement.
NC-SARA claims a bill making its way through Maryland's legislature —
designed to limit for-profit institutions —would put the state out of
compliance with the coming federal regulations, as well as the group's
standards.
Policy experts predict that if Maryland lawmakers pass the legislation
as written, it may lead to legal scrutiny of NC-SARA and interstate
compacts generally.
The Education Department might need to figure out if NC-SARA complies
with the federal requirements that such reciprocity agreements can be
used in place of traditional state authorization, Robert Shireman, a
senior fellow at The Century Foundation, a left-leaning think tank,
told Education Dive in an email.
Reciprocity agreements are designed to make it easier for institutions
to offer distance learning nationwide by holding the participants to a
set of common standards rather than requiring them to be separately
authorized in each state.
"In short, it will be interesting," wrote Shireman, a noted critic of
for-profit schools who has been involved in drafting legislation in
California that targets those institutions.
Testing the limits
Key Maryland lawmakers from both sides of the aisle, as well as
advocacy groups, have thrown their weight behind the bill, which
attempts to close what critics have described as a longstanding
loophole in higher education law on what's known as the 90-10 rule.
The rule requires at least 10% of for-profit institutions' revenue to
come from sources other than Title IV funding. It intends to serve as a
proxy for quality, in that institutions providing a valuable education
should be able to generate sufficient income from sources other than
the government.
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