Latest Developments on State Authorization of Distance Education Deciphered by Eduventures Report

BOSTON, July 21, 2011 /PRNewswire/ -- Eduventures, Inc., the leader in higher education research and consulting, released last week a second update to its January 2011 report ("Online Learning Across State Borders"). The new report includes commentary on the July 12, 2011 U.S. District Court ruling which threw out the Department of Education's (DOE) rule on state authorization specifically as it relates to distance learning across state borders. Eduventures anticipates that federal involvement is likely to continue despite this ruling and advises schools to proceed with review and compliance efforts.

(Logo:  http://photos.prnewswire.com/prnh/20110124/NE34319LOGO)

The "Program Integrity" rules from the U.S. DOE, which went into force July 1, 2011, originally required all Title IV-eligible schools to be able to demonstrate, upon request, that they have or are actively seeking any necessary approval in every U.S. state in which they operate, including by distance learning. Subsequently, the DOE extended the deadline for this aspect of the rules to July 1, 2014, but required "good faith" compliance efforts from July 2011.

Despite the District Court decision, state enforcement remains a significant business risk to a school's online or other affected operations, even if federal action and prospective loss of Title IV eligibility are now in question.  Many states have explicit requirements that distance education providers enrolling students or otherwise judged present in their state must first obtain authorization, and states have the right to enforce their regulations at any time.

"It is important to note that the District Court ruled against the DOE on lack of due process," said Richard Garrett, author of the report and Managing Director at Eduventures, "and did not address the substance of the DOE's position on state regulation and distance learning. The fact that the court upheld the DOE's stance on incentive compensation, misrepresentation and other aspects of state authorization, suggests that the DOE is in a strong position to reassert its case. This court ruling is unlikely to be the end of federal involvement on this issue."

Schools are advised to carefully assess their regulatory exposure in states where they enroll students through distance education, or engage in related activities under state jurisdiction, and to take the necessary action to come into compliance. 

"Not all states require action," added Laura Boothroyd, Director of Consulting Client Services at Eduventures. "Others have requirements but minimal penalties, and some cite penalties of $500/day per violation.  Schools with a significant investment in distance learning, and in particular states, should still move quickly to come into compliance in those states where the need for authorization is clear."

For a copy of the report or to speak with Richard Garrett, contact Blair Maloney at [email protected], +1-617-532-6063.

About Eduventures

Eduventures, Inc. is a research and consulting firm with deep expertise in higher education. Through our Learning Collaboratives and Consulting Division, we work with senior leaders at higher education institutions to drive enrollments, raise funds, optimize the academic portfolio, and enhance efficiency. For more information, visit www.eduventures.com.

SOURCE Eduventures, Inc.