If you’re the institutional liaison with your state office of higher education, or with the Commission on Accrediting of the Association of Theological Schools (ATS), or with a regional accrediting agency, you know that there’s a deadline approaching: July 1, 2014. 

If you have any kind of online presence that draws students from across state lines — and at least 112 ATS schools do! — then you should be prepared for it. Not sure if your school has a comprehensive online degree program? Check the list at www.bit.ly/compliance1

The July 1 deadline refers to the State Authorization Requirement (otherwise known as 34 CFR §600.9(c)), which requires all institutions to be authorized by the state offices of higher education in all states where their students live. Though the federal law was vacated on June 5, 2012, the state regulations requiring authorization remain active. For this reason, institutions must “comply with any applicable state approval or licensure requirements in each state in which it ‘operates’ and be approved by that state by name,” according to the Western Interstate Commission for Higher Education’s technology division, the WICHE Cooperative for Educational Technologies (WCET). (For details,  see www.bit.ly/compliance2.)

According to WCET, the United States Department of Education plans to enforce the regulation on July 1, 2014.

Important for boards to know

This news is important for the governing boards of theological colleges and seminaries because it directly affects an institution’s ability to keep its virtual doors open for business. A wise board will ask the school’s president right now whether the school will meet the federal deadline on July 1. 

If not, plans should be made to come into compliance with the new requirements immediately. 

Compliance is administratively simple, but it requires some investment in time. Because different states have different triggers, the first step in this process is for a school to develop a policy for determining whether its practices trigger a need for state authorization in any given state. For example, a seminary having a physical presence in a state is a common trigger, but in 16 states, authorization may be required even for schools with no physical presence.

Each seminary that offers online courses should develop a policy and plan — if the triggers for any particular state are tripped, then the steps for complying with that state’s authorization requirements should be implemented without delay. 

WCET provides some advice on how do this (see www.bit.ly/compliance3), but the most important advice is to communicate with applicable state regulators via email and then follow up with those regulators by phone if a response is not received in a reasonable period (about two weeks). In cases where no state trigger is tripped, schools should maintain in their files the documentation showing that they do not trip the trigger for those states.

For the email message that will be sent to each applicable state office of higher education, the school should create a standard format that includes the following elements: 

■  The type of institution (e.g., not-for-profit).

 The number of students served  (provide total number of students). 

 The number of students who reside in the state where authorization is being requested (provide total number of students who live in that state).

 The types of programs offered (list all degree programs offered, both on-campus and online).

■  The institution’s status on common physical presence triggers:

  • Recruiting in the state (e.g., “none — all recruiting is done via word of mouth or through national or web-based media advertising”).

  • Property in the state (e.g., “none — all institutional property remains in institution’s home state, and institutional data is stored in the cloud”).

  • Employment in the state (e.g., “faculty members within Distance Learning programs are home-based in a number of states, namely [list states]”). 

  • Third-party contracts in the state (e.g., “none involving vendors in your state”).

  • Instruction in the state (e.g., “none — all instruction is done online”).

  • Advertising in the state (e.g., “national media and the Internet; no advertising is done within local papers in your state”).

 The institutional accreditation liaison officer’s complete contact information (name, physical address, email address, phone).

Some penalties for non-compliance exist, as described by WCET (see www.bit.ly/compliance4). In most cases, the first penalty is a cease-and-desist order and possibly a fine for operating without authorization. Because state agencies are reasonable, any given state office of higher education will likely first ask an institution operating within its borders to simply take the steps to become authorized and may also ask institutions to stop serving students who reside in their state until the institution has taken those steps. 

Federally, the risk to the institution may be a loss of Title IV funding and the requirement to “reimburse federal financial aid funds for students in the noncompliant states.” WCET provides an important caveat here: “The U.S. DOE still requires institutions to notify students about where the institution is authorized and where a student can file a complaint.” 

An important legal note: If a student is not notified in advance that the school has not been authorized to operate in the student’s home state, it’s possible for that student to file suit against the noncompliant school. Finally, because accreditation is based, in part, on an institution’s meeting all state and federal laws, noncompliant institutions could find their accreditation in jeopardy.

Some help for schools is on the way. A State Authorization Reciprocity Agreement (SARA) promises to simplify the process of state authorization (see www.wiche.edu/sara for details on how institutions might benefit from this service). But while the authorization service is being set up, institutions should plan to work individually with each state office of higher education, and they should email this article to their accreditation liaison officer immediately after reading this.

This article was adapted from a presentation delivered in November 2013 to the Technology in Theological Education Group of the Association of Theological Schools.

It is available online at www.intrust.org/stateauthorization, which includes a list of state offices of higher education and contact information.

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