Laws & Guidance HIGHER EDUCATION
Program Integrity Questions and Answers - State Authorization

- Program Integrity Q&A -

Questions on this topic are divided into the following categories:

In addition to the following Q&As, please see the following resources for guidance related to State Authorization:

General Questions (STA)

STA-Q1: Does section 600.9(a)(1)(i)(A) permit an institution to be authorized by name by a State as a postsecondary educational institution in one of several ways – by statute, by constitution, or by other actions issued by an appropriate State agency or entity?

STA-A1: Pursuant to section 600.9(a)(1)(i)(A), the legal basis for the institution’s existence as an eligible institution under the HEA is its authorization, by name, to offer postsecondary education. States may use a variety of means to establish a postsecondary institution, including a State agency that charters an institution, a statute that establishes a postsecondary institution, or a provision of a State’s constitution that establishes a postsecondary institution. This provision does not preclude a State from having a further approval or licensure process with which the institution must comply. [Guidance issued 3/17/2011]

STA-Q2: Does “established by name” literally mean that a statute, constitution, or other action of a State must specifically establish and name an institution?

STA-A2: Yes. [Guidance issued 3/17/2011]

STA-Q3: Regarding the requirement in section 600.9(a)(1)(i)(A) that an institution be "established by name as an educational institution by a State through a charter, statute, constitutional provision, or other action issued by an appropriate State agency or State entity and is authorized to operate educational programs beyond secondary education," in the absence of State law, or a State-authorized charter, could the "other action issued by an appropriate State agency or State entity" that recognizes an institution by name as a postsecondary institution be the articles of incorporation filed with the State’s Secretary of State?

STA-A3: Yes, if the articles of incorporation are for the establishment of a postsecondary institution and the institution is incorporated by name. No, if the articles of incorporation are only as articles of incorporation for a business or nonprofit entity in the State. As noted in the preamble to the final regulations, a State is expected to take an active role in authorizing an institution to offer postsecondary education, and this is a substantive requirement. (See 75 FR 66861 (Oct. 29, 2010).) Articles of incorporation that name the institution and establish it as a postsecondary institution would meet this requirement. If the institution is not incorporated by the State as a postsecondary institution, a further State approval or licensure by name is required. These regulations are premised on the notion that an institution must obtain some type of authorization as a postsecondary institution to be considered legally authorized by the State. [Guidance issued 3/17/2011; revised 6/21/2011]

STA-Q4: Would a letter issued by the State naming an institution satisfy the Department’s requirement of “other action” under section 600.9(a)(1)(i)(A)? Would that “other action” need to be issued by the cognizant postsecondary education regulatory agency or entity, or would any State agency or entity be adequate under the rule, e.g., the governor, legislature, or head of an executive branch agency?

STA-A4: A letter would not satisfy this requirement. For purposes of section 600.9(a)(1)(i)(A), the legal instrumentality that is the basis for the institution’s existence must authorize it by name to offer postsecondary education. The appropriate State entity to take the “other action” would depend on State law. In general, the “other action” will usually involve the incorporation documents of the institution. [Guidance issued 3/17/2011]

STA-Q5: A State’s community colleges are authorized by State law, but not by name. Would the State’s Department of Education need to provide some documentation of their individual authority -- by name -- to grant postsecondary credentials in the State?

STA-A5: As discussed in the preamble to the final regulations (see generally 75 FR 66867 (Oct. 29, 2010)), to the extent a public community college is a State institution, it is an instrumentality of a State government and is by definition compliant with section 600.9(a)(1)(i). [Guidance issued 3/17/2011]

STA-Q6: If, for example, in order to offer a diploma in nursing, State law requires a nursing school to be licensed by a State education agency as well as by the State’s board of nursing, must the school document both licenses to be eligible for the title IV, HEA student financial assistance programs?

STA-A6: Yes. To be eligible to participate in the title IV and other HEA programs, an institution must be in compliance with all applicable State laws, which include that all requisite licenses are current and in good standing. [Guidance issued 3/17/2011]

STA-Q7: If a tribal college offers postsecondary education in a location that is not on tribal lands, must the college be able to demonstrate legal authorization from the State to offer postsecondary education at that location?

STA-A7: Yes. If the State requires approval for tribal college programs located on nontribal land, such approval must be obtained to be an eligible institution. [Guidance issued 3/17/2011]

STA-Q8: Can a State establish a for-profit or private nonprofit institution under the provisions of section 600.9(a)(1)(i)(A) and have a further State approval or licensure process applicable to the institution?

STA-A8: Yes. A further State approval or licensure process is not required given the legal basis for the institution’s existence. A State, however, may have such a process. An institution must have such approval in order to be considered an institution of higher education for the purposes of the HEA. A State approval or licensure process does not require the creation of or reliance on a State agency; e.g., an act of the State legislature may provide such approval. Additionally, a for-profit or private nonprofit school that is not compliant with section 600.9(a)(1)(i)(A), i.e., is only established as a business or nonprofit charitable organization without authorization to offer postsecondary education, must have State approval or licensure by name. Pursuant to section 600.9(a)(1)(ii)(B), approval based on accreditation, years in operation, or other comparable exemption is not sufficient. [Guidance issued 3/17/2011]

STA-Q9: If an institution meets the qualifications for a religious exemption under section 600.9(b) of the regulations, but the institution is subject to State licensing or approval requirements independent of its status as a religious institution, is the institution considered exempt from demonstrating State legal authorization for HEA purposes?

STA-A9: No. The Department recognizes a specific religious exemption in its regulations, but when an institution is subject to State laws independent of its status as a religious institution, the Department requires that it have State legal authorization. For example, a religious institution that also operates a nursing school must comply with any State requirements imposed on nursing schools, even though the institution otherwise qualifies for a religious exemption under section 600.9(b). As a result, none of the institution is exempt from demonstrating State legal authorization. [Guidance issued 3/17/2011; revised 6/21/2011]

STA-Q10: If a religious institution does not satisfy a particular State’s religious exemption from State licensure, but it does satisfy the religious exemption under 600.9(b) of the regulations, must the institution comply with State licensure requirements to be an eligible institution?

STA-A10: Yes, the institution must comply with State law. [Guidance issued 3/17/2011]

STA-Q11: Is an institution required to update its Eligibility and Certification Approval Report (ECAR) by submitting updated information about its State authorization on its Application for Approval to Participate in Federal Student Financial Aid Programs (E-App)?

STA-A11: An institution should ensure that it is currently in compliance with the regulations but is not required to immediately update its ECAR. An institution applying for recertification should submit an application using the Application for Approval to Participate in the Federal Student Financial Aid Programs (E-App) to include the information showing its legal authorization based on these regulations. In addition, an institution may be asked to provide that information upon request during an audit or program review. If an institution has any questions about documenting its State legal authorization, it should contact its School Participation Team. Contact information for School Participation Teams is found at http://www.eligcert.ed.gov/. [Guidance issued 7/27/2012]

STA-Q12: If an institution’s articles of incorporation establish the institution by name and identify its purpose as offering postsecondary education, is the institution considered to comply with the provisions of 34 CFR 600.9 (a)(1)(i)(A) and to be legally authorized by the State in which it is incorporated?

STA-A12: Yes, if the institution can demonstrate that the State played an active role in authorizing the entity to provide postsecondary education, and if the State has a student complaints process in accordance with 34 CFR 600.9(a)(1). The institution must also show that it meets any other applicable State approval or licensure requirements under 34 CFR 600.9(a)(1)(i)(B). [Guidance issued 7/27/2012]

STA-Q13: Can a limited liability company (LLC) be compliant with 34 CFR 600.9 (a)(1)(i)(A), or is it considered a business subject to the provisions of 34 CFR 600.9 (a)(1)(ii)?

STA-A13: An LLC is considered a business subject to the provisions of 34 CFR 600.9(a)(1)(ii), and the institution must have State approval or licensure. For purposes of the student aid programs, LLCs will be reviewed on a case by case basis to determine if the State has authorized the entity to operate a postsecondary educational institution. These reviews will be done routinely during the recertification process, but may also arise during a program review. [Guidance issued 7/27/2012]

STA-Q14: Must an institution provide State authorization information for locations for which it offers less than 50 percent of any program?

STA-A14: No. The Department is continuing its policy that students attending one or more locations of an institution where the students cannot complete more than 50 percent of a program are considered to be enrolled at the main campus of the institution and these locations need not be listed on its E-App or included on its ECAR. Please note, however, that State requirements may require an institution to obtain approval of such sites, and the Department may take that information into consideration when determining whether the institution meets applicable State requirements. [Guidance issued 7/27/2012]

STA-Q15: How does the 50 percent standard apply to internships and externships?

STA-A15: The portions of programs students take in internships and externships are considered when determining whether a student can complete more than 50 percent of a program at a location not recognized by the Department as a separate additional location of the institution, provided that those activities are monitored by qualified institutional personnel. However, if the Department is notified by a State that the institution’s activities are not in compliance with State authorization or licensure requirements, the Department will take that information into consideration when determining whether the institution meets the applicable State authorization requirements. [Guidance issued 7/27/2012]

STA-Q16: How do the regulations on State authorization apply to institutions involved in consortia agreements with institutions in other States?

STA-A16: For purposes of the Title IV, HEA programs, an institution offering a program is responsible for ensuring that all parts of the program it offers to its students meet all applicable State requirements. If a student enrolled in a program from one institution takes required coursework from an institution located in another State, that coursework is deemed to be a part of the program offered by the first institution, unless the student is required to enroll separately in the out-of-State institution. The first institution is responsible for determining what State approvals are needed and for ensuring that any needed approvals are obtained by it or by the institution providing the out-of State coursework. In addition, the institution must provide to its students or prospective students the contact information for the relevant State official or agency that could handle a student’s complaint for an issue at that location. The institution enrolling the student must also ensure that its accreditation includes all needed approvals applicable to the program.

In addition, institutions must comply with the regulations in 34 CFR 668.5 that govern written arrangements between eligible institutions to provide all or part of an educational program. [Guidance issued 7/27/2012]

STA-Q17: Is an institution required to provide consumer information to all students, including students enrolled in distance education?

STA-A17: Yes, an institution must make sure that all of its students are provided with the applicable information that corresponds to their enrollment. The information must be for every State in which the institution is operating, including every State where students are enrolled for distance education. [Guidance issued 7/27/2012]

STA-Q18: If an institution offering distance education in a State has only one student in that State, must it still provide the contact information for that State?

STA-A18: Yes. [Guidance issued 7/27/2012]

STA-Q19: If a student taking a program by distance education moves to another State, must the institution list the contact information for that State in its consumer information? What if the student is temporarily taking the program in another State because, for example, the student is visiting a friend?

STA-A19: Institutions determine that students are still enrolled as a part of the normal disbursement process each payment period. To the extent an institution is aware a student taking distance education has moved to another State, it must make sure the student has access to the State contact information for filing complaints in that State. [Guidance issued 7/27/2012]

STA-Q20: If a student taking distance education is in the military and is given an assignment outside the United States, is the contact information for the institution’s main location sufficient?

STA-A20: Yes. [Guidance issued 7/27/2012]

STA-Q21: Is there an updated version of the summary chart published in the preamble of the regulations that includes the relevant regulatory citations?

STA-A21: Yes.

Meets State Authorization Requirements *
Row Legal entity Entity description Approval or licensure process
ROW AEducational institution§600.9(a)(1)(i)(A)
A public, private nonprofit, or for-profit institution established by name by a State through a charter, statute, authorized by the State to offer postsecondary education in its articles of incorporation, or other action by an appropriate State agency or State entity.
§600.9(a)(1)(i)(B)
The institution must comply with any applicable State approval or licensure process and be approved or licensed by name; and if there is an approval or licensure process, may be exempted from such requirement based on its accreditation, or being in operation at least 20 years, or use both criteria.
ROW BBusiness§600.9(a)(1)(ii)
A for-profit entity established by the State on the basis of an authorization or license to conduct commerce or provide services.

§600.9(a)(1)(ii)(A)
The State must have a State approval or licensure process, and the institution must comply with the State approval or licensure process and be approved or licensed by name to offer postsecondary education.

§600.9(a)(1)(ii)(B)
An institution in this category may not be exempted from State approval or licensure based on accreditation, years in operation, or a comparable exemption.

ROW CCharitable organization

§600.9(a)(1)(ii)
A nonprofit entity established by the State on the basis of an authorization or license for the public interest or common good.

§600.9(a)(1)(ii)(A)
The State must have a State approval or licensure process, and the institution must comply with the State approval or licensure process and be approved or licensed by name to offer postsecondary education.

§600.9(a)(1)(ii)(B)
An institution in this category may not be exempted from State approval or licensure based on accreditation, years in operation, or a comparable exemption.

* Notes:
  • These requirements do not apply to Federal, tribal, and religious institutions (§600.9(a)(1)(iii) and (b)).
  • A State must have a process, applicable to all institutions except tribal and Federal institutions, to review and address complaints directly or through referrals (§600.9(a)).
  • The chart does not apply to distance education programs offered out-of-State.

[Guidance issued 7/27/2012]

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Complaints Process (C)

C-Q1: Even if certain institutions are exempt from a State’s approval or licensure requirements, is there still a requirement for the State to have a process to resolve complaints involving those institutions? In addition, could the State statutorily delegate this function to a non-State entity, such as an institution’s governing board or a trade association?

C-A1: The State must have a process to handle complaints for all institutions in the State, except federally run institutions (including the service academies) and tribal institutions such as tribally controlled community colleges. For purposes of HEA eligibility under these regulations, the State remains responsible for responding to complaints about institutions in the State regardless of what body or entity actually manages complaints. The Department will only recognize a delegation that maintains the final authority with the State. This responsibility can be met by the offices of a State’s Attorney General, or by a more specialized State entity. A State, upon considering a complaint, may refer it to other appropriate entities, such as an institution’s accrediting agency, for final resolution. [Guidance issued 3/17/2011]

C-Q2: The Department appears to acknowledge that a State may have a combination of agencies or officials to handle complaints. If multiple agencies are used to handle complaints, do they need to have any affiliation or expertise with postsecondary education? For example, could the State’s generic consumer protection agency act on complaints?

C-A2: Pursuant to section 600.9(a)(1), the Department did not specify that a single State agency must handle complaints, nor did it specify any particular expertise on the part of the State agency. If multiple agencies are applicable to an institution, the institution, under section 668.43(b), must provide its students or prospective students with contact information for filing complaints with the institution’s State approval or licensing entity and any other relevant State official or agency that would appropriately handle a student’s complaint. [Guidance issued 3/17/2011]

C-Q3: For purposes of acting on complaints, would a governing board that has oversight of multiple institutions as part of a State university system satisfy the requirement that a complainant have access to a process that is independent of any institution?

C-A3: As stated in the preamble to the final regulations (75 FR 66866 (Oct. 29, 2010)), "The State is not permitted to rely on institutional complaint and sanctioning processes in resolving complaints it receives as these do not provide the necessary independent process for reviewing a complaint. A State may, however, monitor an institution’s complaint resolution process to determine whether it is addressing the concerns that are raised within it." A State may rely on a governing board or central office of a State-wide system of public institutions if the State has made the determination the governing board or central office is sufficiently independent to provide successful oversight of complaints for the institutions in that system. It would not be acceptable for such a board or central office to handle complaints for other institutions in the State. [Guidance issued 3/17/2011]

C-Q4: If a tribal college has an additional location that is not on tribal lands, does the college need to obtain State authorization for that location and identify a separate complaint process for students attending the additional location in the State?

C-A4: Yes, a location of a tribal college located in a State rather than on tribal land must comply with the State approval process in that State. In addition, the college must provide to its students or prospective students the contact information for the relevant State official or agency that could handle a student’s complaint for an issue at that location. [Guidance issued 7/27/2012]

C-Q5: Can an institution offering distance education in multiple States satisfy the provisions of 34 CFR 668.43(b) that it provide State contact information for filing complaints by providing a link to a noninstitutional Web site that identifies the contact information for multiple States?

C-A5: Yes, so long as the link is accessible from the institution’s Web site and the link is prominently displayed and accurately described. The institution is also responsible for ensuring that the link is functioning and accurate. [Guidance issued 7/27/2012]

Distance Education (D)
[Reserved]

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Program Integrity Q&A


 
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Last Modified: 04/09/2013