Education Department Clarifies Its Intent on State Authorization Reciprocity

To paraphrase Mark Twain: “The report of SARA’s death was an exaggeration.”

Department of Education officials recently told me that they recognize the hard work over many years in creating interstate reciprocity agreements for state authorization. They also expressed surprise over the perceptions that their new state authorization regulations would harm reciprocity.

In a call initiated by the Department and a subsequent call to answer some follow-up questions, well-placed Department officials clarified widespread “misconceptions” advanced by me and many others. This blog post presents my interpretation of what was said in those calls. Due to these discussions, my view of the intent of the Department’s new reciprocity definition has changed.

This is welcome news. In Cheryl Dowd’s (the State Authorization Network director) and my initial take on the regulation and the subsequent reactions from several sources that we reported late last year, we all thought the regulation would end reciprocity. After all, if a state could do whatever it wants despite an agreement, what use is the agreement?

From what I heard in the calls, the Department intended the exact opposite. It continues its long-held support for reciprocity agreements as a way for institutions to demonstrate state authorization of distance education. Additionally, it recognizes the rights of states participating in the agreement to set the provisions for reciprocity and the decide what states may join.

A Brief History of the “Reciprocity” Definition

When the Department issued its proposed state authorization regulations earlier this year, they included a definition of a reciprocity agreement, saying that an agreement acceptable for demonstrating compliance with federal financial aid rules could not prohibit a state from enforcing its consumer protection laws. Several of those submitting official comments on the regulations (including us) requested this definition be clarified. After all, different people had different ideas as to what would count as a “consumer protection” law. The definition as proposed last summer:

“An agreement between two or more States that authorizes an institution located and legally authorized in a State covered by the agreement to provide postsecondary education through distance education or correspondence courses to students in other States covered by the agreement and does not prohibit a participating State from enforcing its own consumer protection laws.”

Note that the Department talks only about the “concept” of reciprocity agreements as it is possible that subsets of states may decide to create multiple agreements. In this regulation, the Department is not addressing a specific agreement, such as SARA – the State Authorization Reciprocity Agreement. Even though SARA is the best-known reciprocity agreement for distance education. It counts 47 States (plus DC) as members and 1,300 participating institutions. In full disclosure, I was deeply involved in forming that agreement.

The final regulation (issued in December) included the following, expanded definition of an acceptable reciprocity agreement:

“An agreement between two or more States that authorizes an institution located and legally authorized in a State covered by the agreement to provide postsecondary education through distance education or correspondence courses to students residing in other States covered by the agreement and 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.”

On page 16 of the final regulation, the Department made the following statement in responding to official requests gathered during the open comment period regarding the proposed definition of a reciprocity agreement:

“…we believe that if a State has laws that are specific to postsecondary institutions, the State’s laws should not be preempted by a reciprocity agreement that does not recognize those State laws. Thus, we believe that the definition of a State authorization reciprocity agreement should encompass a State’s statutes and the regulations interpreting those statutes, both general and specific, including those directed at all or a subset of educational institutions.”

Those of us outside the Department interpreted that language to mean that a state could enforce any of its regulations even if that enforcement conflicted with a reciprocity agreement it had joined. You can see how we came to that conclusion.

Based on my recent conversations with Department personnel, our interpretation was wrong.

Key Takeaways Regarding the Department’s Intent

What did they intend? The intent of the language in the final regulation was to assure that a reciprocity agreement could not supersede state laws not covered in the agreement. The language required some “threading the needle” between state and federal laws and some of the Department’s ultimate intent seemed to be lost in the final wording.

Let me interpret the Department’s intent in my own words based on our recent conversations. In brief, the Department considers a reciprocity agreement to be in compliance with their requirements as long as the state’s laws and regulations and the provisions of any reciprocity agreement the state joined are not in conflict.

These details were fleshed out a bit more in our conversations:

1. The Department reaffirms its support for reciprocity agreements as a path for an institution to obtain authorization in another state.
2. Reciprocity agreement member states jointly define the provisions of the agreement and decide upon membership in the agreement. If a state disagrees with those provisions, it does not have to join. State participation is voluntary.
3. If a state decides to join a reciprocity agreement, how it regulates institutions covered by the agreement cannot conflict with the provisions of the agreement. As an example, suppose a reciprocity agreement treats all sectors of institutions the same and prohibits states from imposing state-specific tuition refund formulas on out-of-state institutions participating in that agreement. Member states must abide by those provisions or they are determined to be in conflict with the agreement. Reciprocity member states cannot unilaterally impose their own conditions on participating institutions, unless those conditions are outside the scope of the reciprocity agreement.
4. Reciprocity agreements must have a process to resolve any conflicts between state regulations and actions and reciprocity agreement provisions. Department personnel further clarified that they would expect an agreement to:
   • Have a process to reject applications from states that cannot or do not plan to abide by the agreement,
   • Have a mechanism to review and resolve conflicts between state regulations and reciprocity agreement provisions, and
   • Have the ability to dismiss member states that do not abide by reciprocity agreement provisions.
5. The Department will investigate unresolved conflicts between a state and a reciprocity agreement. Among actions the Department could take:
   • Declare the conflicting state’s institutions ineligible to offer federal aid to distance education students in other states participating in the agreement until the conflict is resolved,
   • Declare the agreement is out-of-compliance with federal regulations if it does not have the have the proper mechanisms to resolve conflicts, or
   • Take any other action it deems appropriate.

The Bottom Line and Making this Official

Bottom line: This is great news for SARA and, more importantly, the countless students who are now protected by that agreement and had no protection just a few years ago.

Again, this blog post presents my interpretation of what Education Department leadership intended all along, but was hard to determine from the final regulation. A Department official suggested that we submit a request to the Department to officially clarify (perhaps through a “Dear Colleague” letter) the intent of the reciprocity agreement definition. WCET, the State Authorization Network, and SARA will, together, promptly draft an official request for clarification.

Meanwhile, this places me in an awkward position. The Department staff reached out to me to clarify their intent. They are completely aware that I will share my impressions publicly, but they asked that those participating in the calls not be named. You can draw your own conclusions, but I think it has much to do with the calendar.

Glad to See the Department Support Reciprocity

As a result of these conversations with Education Department leadership, my main objection to the recently released regulation has been mitigated. I still have some other, more minor, problems with the final regulation, but those details will be explored on another day.

The end of reciprocity was a deal breaker. But, that is not their intent.

As for “misconceptions,” Mark Twain quipped: “The difference between the almost right word and the right word is really a large matter—’tis the difference between the lightning-bug and the lightning.”

Happy new year!

Russ

Russell Poulin
Director, Policy & Analysis
WCET – WICHE Cooperative for Educational Technologies
rpoulin@wiche.edu    @russpoulin

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