Varying State Laws Hinder Online Education

Online education providers are encountering problems similar to the one that stymied Amazon when it attempted to make a good-faith effort to collect sales taxes: the law in each state was so different that attempting to maintain regulatory compliance felt like a losing battle right from the start. Schools offering online courses in multiple states [...]

Online education providers are encountering problems similar to the one that stymied Amazon when it attempted to make a good-faith effort to collect sales taxes: the law in each state was so different that attempting to maintain regulatory compliance felt like a losing battle right from the start.

Schools offering online courses in multiple states face similar problems. Especially when operating in the higher education sector, keeping up with the myriad rules and regulations is a burden many a startup doesn’t have the financial wherewithal to tackle.

But a growing number of states are waking up to this problem and are attempting to craft a system that makes it easier to providers to comply while still working to ensure that only top quality courses are offered within their borders.

In a just-released policy brief that outlines some of the challenges states confront in regulating online education, a national association representing U.S. governors has advised that state chief executives “consider calling for a review of current state laws and regulations surrounding authorization of online programs” of their respective state.

The National Governors Association is calling on its members to do their utmost to speed up the process. In Regulating Online Postsecondary Education: State Issues and Options, released last week, the governors are asked to take the initiative on these issues by calling for a review of all policies and regulations dealing with online education in their states.

“The review would be designed to identify opportunities for simplifying and streamlining the process and to explore the possibility of joining an interstate reciprocity agreement for authorization,” the policy brief states. In addition, reviews should focus on clarifying the purpose of state regulation, state requirements for authorizing courses and programs and state capacity for and costs of regulating programs.

The governors are in an excellent place to tackle this role, as their position gives them a nice top-down view of their states’ regulatory regime. For advice on how to tackle these issues they can also turn to groups like the Association of Public and Land-grant Universities and the State Higher Education Executive Officers, both groups that have looked at the problem of accreditation and regulations covering colleges in general and online eduction providers in particular.

Regulations for online educators were issued in 2010 by the U.S. Department of Education, but they were criticized at every level both for their content and because in the views of many they overstepped the power granted to the federal government.

In 2012, a federal appeals court sustained a lower court ruling that rejected the education department regulations related to online education. The requirement “that postsecondary institutions — including institutions with online programs — obtain state authorization still stands in federal law,” the policy brief states.

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