The information regarding “State Authorization Regulations” on this website is intended for internal University audiences only.
SPECIAL NOTE FOR UNIVERSITY ACADEMIC UNITS: Processes are currently in place to ensure that the World campus is or becomes compliant in all states and territories. If your department currently offers or is planning to offer online courses outside of Pennsylvania—and has not coordinated the effort with the World Campus—then the offering may jeopardize our compliance status and put the University at risk. Please review this website to better understand the implications and what your department can do to help ensure that the University abides regulations. Visit the section “Impact on Academic Units,” in particular.
What are state authorization regulations?
BACKGROUND – The U.S. Constitution (10th Amendment) grants all states the authority to regulate education within their boundaries. In October 2010, the U.S. Department of Education (USDOE) amended the Higher Education Act of 1965 with a federal state authorization regulation. This regulation affected the World Campus and all University credit and degree distance education activities. (As of October 2012, no state requirements had been encountered that affect Penn State’s non-credit or non-degree offerings.)
Since 2010, there has been much activity surrounding this regulation by the USDOE, courts, states, institutions, and regulators. For a period of time, post-secondary education institutions faced a potential assessment against Title IV federal financial aid for students residing in states where these institutions were noncompliant. Following various court cases, in July of 2012 the USDOE declared it would not enforce or reissue the state authorization regulation [rule 600.9(c)] which had been earlier struck down on technical grounds. Currently the legal status of the regulation remains uncertain though the USDOE has indicated that new regulations may be developed.
TODAY – Despite these events, the University remains obligated to comply with each state’s policies for distance education. These requirements vary greatly from state to state, with the need to seek authorization dependent upon the University’s activities in – and the respective laws of – each state. Along with differing requirements, certain states charge fees, and many have recurring authorization renewal periods.
Timeline
- October 2010 – The U.S. Department of Education released the regulations.
- July 2011 – The U.S. District Court of the District of Columbia ‘vacates’ the regulation on procedural grounds. USDOE’s appeal took place February 2012.
- February 2012 – The U.S. House of Representatives approves HR 2117 to repeal the state authorization regulation; it is not expected to pass in the Senate.
- June 2012 – U.S. Court of Appeals upholds the lower court’s ruling, vacating the federal regulation. States’ regulations remain in effect.
- July 2012 – The USDOE announces that they will not reissue the federal regulation.
- August 2012 – U.S. Appeals remands to lower court.
- April 2013 – USDOE will consider “regulatory changes related to State authorization.” Members of Congress issue a letter to USDOE Secretary Arne Duncan asking that Congress address these issues in the reauthorization of the Higher Education Act.
- August 2013 – The Lumina Foundation provides $2.3 million toward the establishment of the National Council for State Authorization Reciprocity Agreements (NC-SARA).
- December 2014 – Seventeen states are now approved by NC-SARA. Pennsylvania is exploring options.
What may happen if the University is noncompliant in a state?
Failure of any part of the University to comply could result in a state issuing a cease-and-desist order or fines, regulators turning to the media declaring our noncompliance, or students filing lawsuits for our lack of proper approvals and failure to notify them.
What processes are in place to ensure proper compliance?
In 2011, the University’s Office of General Counsel charged Outreach & Online Education (OOE) with securing and maintaining compliance for World Campus programs and activities due to their presence in all 50 states. Since then, the OOE compliance team has worked with state regulators to understand requirements and fees, gather documentation from University sources, submit registration applications, track compliance progress, and maintain information on regulations at large. They have done so with continued assistance from General Counsel and in conjunction with the Office of the Corporate Controller.
As the primary clearinghouse for state authorization processes, the compliance team also assists academic units with evaluating activities that are outside of the scope of the World Campus but that may have state authorization implications. They work closely with program managers and others to determine potential issues and coordinate securing compliance as appropriate.
Non-credit or Non-degree Programs
One of the most frequently asked questions we receive is how the state authorization requirements affect non-credit or non-degree offerings of the University. Currently, we have not come across any state restrictions on the known programs the University offers (an example is Kansas, which requires Real Estate or Insurance certification programs be registered). However, many states’ agencies do have at least some oversight of these types of programs.
The Student Impact
A blog post by organizers of the State Authorization Network (of which we are a member) that details stories of students whose institutions were found to be unauthorized in their states: Putting a Student Face on Not Complying with State Authorization.
Additional Information
- Review information for academic partners
- Visit our FAQ for more detailed information on specific subjects
- Check out the map for an overall look at our progress to date
- Available external resources
- Please contact us with any questions