Authorizing Higher Education Across State Lines

By Dustin Weeden | Vol . 23, No. 29 / August 2015

NCSL NewsDid you know?

  • Twenty-six percent of all postsecondary students in fall 2012 enrolled in at least one online course.
  • Arizona had the highest portion (45 percent) of undergraduate students exclusively enrolled in online courses in fall 2012.
  • Students attending for-profit colleges and universities are most likely to attend courses exclusively online.

Although colleges and universities have a long history of offering correspondence courses, technological advances in the last 20 years have made distance education through online courses increasingly common. During the 2000s, online enrollment regularly outpaced overall postsecondary enrollment. Because online education removes geographic barriers, a growing number of students now enroll in institutions outside the state where they physically reside. In 2012, 2 million undergraduate students enrolled exclusively in online courses, 41 percent of them at an institution outside their home state.

Online programs have improved access to a college education and broadened career opportunities for students regardless of location. However, removing geographic proximity between students and institutions can create challenges to ensuring that students’ interests are protected and institutions are not manipulating or mistreating them. For example, is the student’s home state or the state of the institution’s physical location responsible for addressing student concerns? Given this complex new environment, both the federal and state governments have taken action to ensure colleges and universities are authorized by state agencies to provide educational programs.

Federal Action

The U.S. Department of Education issued rules in 2010 requiring state authorization of postsecondary education. According to the regulations, all institutions with a physical presence in a state must obtain authorization to offer educational programs from the proper state agency or risk losing access to federal financial aid. The regulations also addressed distance education, requiring that any institution enrolling a student from outside the state where it has a physical presence must first obtain authorization. It also must meet all requirements to operate as an institution of higher education in the student’s home state.

The distance education regulation required all institutions to seek authorization from each state in which they enrolled students in online courses. Thus, an institution enrolling students from 30 different states had to seek authorization from the correct regulatory agency in each of the 30 states. This process was cumbersome and expensive because each state has its own fee structure, application process and regulatory requirements.

State Action

To help students, institutions and states address the challenges of authorizing distance education programs, the four regional higher education compacts—New England Board for Higher Education (NEBHE), Southern Regional Education Board (SREB), Midwestern Higher Education Compact (MHEC), and Western Interstate Commission for Higher Education (WICHE)—collaborated to create the State Authorization Reciprocity Agreement (SARA). SARA is a voluntary agreement entered into by states to establish minimum authorization criteria and processes to ensure students’ interests are protected.

Through SARA, an educational institution authorized to provide courses in its home state is considered authorized in all other SARA member states. Authorization reciprocity agreements are similar to driver’s licenses—while people are certified that they meet the requirements to drive in their home state, their driver’s licenses also are accepted in other states. SARA creates a streamlined process that enables institutions to operate more efficiently without the need to obtain regulatory approval and stay current with every state’s authorization procedures. Since SARA establishes minimum guidelines and policies, some states with more stringent requirements may be hesitant to join the agreement. All members of SARA agree to enforce the guidelines outlined in the membership agreement and cannot enforce additional state requirements, standards or fees. States may keep stronger requirements for colleges and universities with physical locations within their borders, but the SARA standards trump state requirements for online programs.

The action required in each state to become a member of SARA is unique. Most states require legislation authorizing the proper entity—often the higher education coordinating agency—to join a reciprocity agreement. Maryland Senate Bill 496, which authorizes the Higher Education Commission to participate in the agreement, exemplifies the most common statutory changes many states have made. Other states, such as Iowa—which statutorily required online nonresident programs to be authorized with the state—enacted additional legislation exempting SARA members from these requirements.

Statutory changes are not necessary in a handful of states where the appropriate agency already has the authority to join SARA. To become a member of SARA, the appropriate state agency must submit an application to the appropriate regional compact and demonstrate that the state meets the standards for membership. As of June 2015, 27 states have joined SARA, and eight have enacted legislation allowing them to join. After enacting enabling legislation, the legislative role often shifts to oversight. The agencies overseeing the agreement may collect data and report to the legislature on how the reciprocity agreement is working for students and institutions.

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