June 2, 2023
Biden administration wants to add a host of new conditions to the agreements that allow colleges and universities to receive financial aid. Critics say those proposals need more work.
A provision nestled within a sweeping set of regulations released last month could change which laws certain colleges and universities must comply with.
The Education Department is proposing to require colleges and universities to comply with the consumer protection laws in all states where they enroll students if they want to receive federal financial aid—regardless of whether they are part of state authorization reciprocity agreements. The proposal was part of the regulations that included new rules on gainful employment, which was the most high-profile proposal in the set. This change, though, would apply to all programs.
Currently, institutions can join a state authorization reciprocity agreement in order to enroll online students from outside the state where the college or university is located and bypass some state requirements. Without the reciprocity agreement, institutions would have to seek authorization from each state in which they want to enroll students and meet a variety of requirements.
This new requirement is one of several new conditions that the department is planning to add to institutions’ program participation agreements, which are required to access federal financial aid.
Department officials said in the regulations that the new conditions would “create a more rigorous process” and better protect students and taxpayers.
Forty-nine states or territories, including the District of Columbia and Puerto Rico, have signed on to the voluntary agreement overseen by the National Council for State Authorization Reciprocity Agreement (NC-SARA), which sets the standards for postsecondary distance education. Critics have said that NC-SARA’s policies leave students in online distance education programs without the same state protections as students in brick-and-mortar programs.