Last July, the US Department of Education (ED) published a regulation proposition for distance education. These rules would further define requirements for degree granting institutions to receive federal aid.
Currently these institutions need authorization from the state they belong to operate, as established in the Higher Education Act. With the proposed rules, colleges including those operating from abroad would also need state and federal authorization.
Since 2006, Congress allowed access to federal aid by students in distance education programs. According to the National Center for Education Statistics (NCES), by 2013 close to 2 million students were online-exclusive undergraduate students. Another 2.6 million were enrolled in programs with at least one online course. While online education has opened a whole new market, thoughtful voices have raised concerns over quality and fraudulent practices by for-profit colleges. Not the least of them John Oliver in his news comedy show Last Week Tonight. For-profit colleges skyrocketed since Congress’ change of heart. 59% of for-profit students in for-profit institutions were involved in some form of distance education, by 2013 NCES figures.
The focus of the regulation proposal by the ED is to close a loophole in which colleges offering higher education programs, to students in a state different than where they are based, did not have their requirements verified by the federal government. To fix this, states with students would submit the out-of-state college under their regulations, including foreign institutions.
Institutions would have to document and disclose on public and individual basis
- their student complaint resolution processes.
- history of adverse action taken against the school.
- refund policies.
- the licensure or certification status of each of their programs.
Until August 24th, the ED received comments from the public about their proposal.
A concern in the ED proposal was the role of the Consumer Protection Act. For-profit colleges benefit from reciprocity agreements about regulations for interstate education, SARA being the most prominent of all. Russ Poulin, from WCET, thought the original text would “cripple SARA”, but he “sincerely doubt[s] that is the Department’s intent”. Fact of the matter is, their for-profit status makes those colleges automatically subject to the CPA, no matter what SARA says. Nobody should think otherwise: legally they are businesses first, education institutions second.
WCET stands for WICHE Cooperative for Educational Technologies. A division of WICHE, which itself abbreviates Western Interstate Commission for Higher Education. WICHE welcomes all for and not-for-profit institutions willing to pay the yearly membership fees.
One of the commenters was online education platform giant and Moodle Partner Blackboard. In August 26th, Van Davis, Associate Vice President of Higher Education Research and Policy, wrote about a letter sent as representative of more than 3,000 colleges and universities that offer distance education programs, through Blackboard Learn and Moodlerooms.
Poulin claims that “‘for-profit’ institutions have additional authorization requirements in many states and have usually already complied with them”. Emphasis mine. He mentions the unfortunate (to for-profits) case of Corinthian Colleges, a US and Canada collection of higher education schools. Poulin considers Corinthian to be an outlier and, technically, not online institution, thus it does not represent the bulk of the distance education offering. The Corinthian offerings still represented thousands of enrolled online students nationwide.
Poulin cannot deny the case set a precedent. Corinthian would eventually be the subject of a government crackdown in 2015 that would lead to a chapter 11 filing and dissolution. The federal government is still dealing with a $1.2 billion student loans tag and the future of 16,000 students, workers and faculty.
The ED would like to have a reasonable reach over online offerings by for-profit colleges to avoid new Corinthians. But Poulin and Blackboard are concerned that the new regulations would needlessly restrain online education, while not completely preventing for-profit wrongdoing.
In the August 26th missive, Davis, following Poulin, makes a plea to “focus on the student”. They both welcome new regulations, as long as states are active players and agreements such as SARA are safe. States’ complaints processes need clarity in many cases. The new ED regulation does not actively address this, as it would not demand new regulations from the states.
Davis ends the post suggesting that the ED should be more forgiving to colleges as they get their required certification information ready to the public. He believes “the Department underestimates the amount of time it will take institutions and state agencies to sort this out”. He asks “the Department to delay implementing this regulation while institutions work on compliance”. It is unclear whether he means colleges should not report their certification status in the meantime.
For-profit colleges will continue to exist, and even thrive in the views of many. Blackboard seems to be one of such believers. A 2011 post compares them to for-profit hospitals, which have been around since the 1980s. Their rise sparked “great controversy (…), but today,” it claims, “most of us don’t know or care how the hospitals we visit are financed.”
The post also recognizes for-profit colleges for their superior graduation rates and their “ability to leverage IT and growing trends towards online learning”.
Corrections made on September 20, 2016