Department of Education Issues Reminder About State Authorization Rule

On June 19, the U.S. Department of Education (“Department”) published a Dear Colleague Letter (“June 19 DCL”) to “remind[] postsecondary institutions of the requirement to have certain types of State oversight and approvals in place to participate in the Title IV” programs.   As part of the program integrity regulations, the Department published revisions to 34 CFR 600.9 that required, for Title IV compliance purposes, “an institution [ ] be legally authorized by a State to provide a postsecondary education program, and the State must have a process to review and act upon student complaints about that institution.”  to that end, the Department requires that states must (1) have some process of actively approving/licensing institutions within their jurisdiction and (2) have a process “to review and appropriately act on complaints” about institutions of higher education.

NOTE: This rule and the June 19 DCL applies to on-ground programs only — the Department published a rule related to online programs as part of the program integrity rule package which was overturned by a court decision and a subsequent attempt at rule making has not yet produced a published rule for online programs.   There are, however, certain disclosure requirements for online programs operating in a state (for example, providing notice of the office in that state to which student complaints may be directed).

Staring with the Preamble to the state authorization rule, and in repeated publications, the Department delayed enforcement of the rule until July 1, 2015.  The June 19 DCL makes clear that no new extensions will be granted, although it seems that the Department will be taking a light touch to enforcement of this rule, preferring to work with states that do not meet the requirements (thus putting the states in their jurisdiction at risk for loss of Title IV eligibility).  Indeed, the Department provides that “States and postsecondary institutions that have not yet done so [met to discuss compliance with this rule] should work together to ensure compliance with the regulatory requirements at 34 CFR 600.9(a) and (b).”  It seems the Department is unlikely to take significant action if a state has a non-complaint process for recognition or complaint review process, but the Department will rather focus on efforts to fix the situation with that particular state.

For institutions, you need to understand (if you haven’t already) how and why you are approved by your state and whether there is a complaint process that applies to your institution.  For example, while some institutions may  be exempted from State approval or licensure based on accreditation or years in operation, others institution types may not use this exemption.  Also, there needs to be a compliant process for handling complaints – and you should be directing your students (as part of your required consumer disclosures – 34 CFR 668.43) to the agency that receives such complaints..  If you have any questions, feel free to contact us to help you work through the process.