The U.S. Court of Appeals for the DC Circuit issued its decision yesterday in the lawsuit brought by the Association of Private Sector Colleges and Universities (APSCU) to overturn or revise key aspects of the “Program Integrity Regulations” that were published on October 29, 2010 and went into effect, with minor exceptions, on July 1, 2011.
On the key issue of state regulation of cross-border distance learning, the Court upheld the lower court decision invalidating the rule requiring institutions to demonstrate that they have secured all required state approvals wherever they enroll online (and correspondence) students. However, it did so on the same basis as the District Court: that the issuance of the rule was procedurally defective because the Department did not afford the requisite notice of its intention to promulgate the rule nor did it afford the necessary opportunity for public comment. Because the process was deemed invalid, neither the District Court nor the Court of Appeals reached the substantive issue of whether the Department has the authority to regulate in this manner.
As has been often stated since the District Court stayed the implementation of the rule, the Administration could choose to reissue it, with appropriate notice and opportunity for the community to provide comments. Indeed, there is probably enough time for that to occur before the November 1, 2012 deadline for implementation by July 1, 2013.
However, it is also clear that the Department did not anticipate such a strong push-back on this rule from across the higher education spectrum: virtually every higher education association joined in opposition to the rule, and indeed in an unusual demonstration of unity nearly all of the organizations representing public and non-profit institutions joined APSCU in supporting legislation that would have blocked its implementation.
We must emphasize that this does not give institutions reason to go back to “the good old days” where few concerned themselves with “foreign state” regulation of online learning. While it is conjectural whether in the face of such unified opposition the Department will seek to reissue the rule, it is abundantly clear that the hornets’ nest of state regulation has been forcefully kicked.
It therefore continues to be very important that the several efforts to arrive at common state standards, reciprocity or some other non-federal mechanism to reduce the burden on institutions that seek to make their programs and courses available across state lines succeed. While it is still unclear what approach will prevail, or when, the distance learning community cannot afford to lose sight of the importance of such a resolution. It is also important that efforts to discourage the Department from seeking to reissue the rule continue. In this regard, the new Congressional eLearning Caucus, co-chaired by Republican Kristi Noem of South Dakota and Democrat Jared Polis of Colorado, as well as the many organizations, such as WCET, the Presidents Forum, ITC, UPCEA, USDLA and ACUTA that have already weighed in on this issue, continue to closely monitor the situation and stand ready to act should the Department try again to remove from the states their discretion as to how they will enforce their own laws.
The bottom line is that, at least for the time being, there is no risk of federal enforcement of state requirements regarding cross-border distance learning. But remember that this means only that the US Department of Education is not involved: institutions are still obligated to follow the law in each state where they fall under the state’s jurisdiction, according to that state’s laws, rules, policies and practices.
The full opinion can be found here. We will of course keep you apprised of developments.