UPDATE: Aug. 5, 2019: The U.S. Department of Education signed off on California’s effort to comply with recently enforced rules on how the state handles complaints by students enrolled online in out-of-state nonprofit and public colleges. The move returns financial aid eligibility to around 80,000 California residents, with the decision backdated to May 26, the point at which California was deemed out of compliance.

In a letter Friday, Ed Department Principal Deputy Under Secretary Diane Auer Jones told the state’s Department of Consumer Affairs (DCA) that its solution is technically not in compliance with the new rules — which were finalized in 2016 and delayed until recently — because it doesn’t refer students to an agency that can enforce state law. Instead, it refers students to their institutions’ accreditors or an agency of the state in which their institutions are located

Although that “presents compliance challenges” under current rules, she wrote, the proposal complies with more flexible rules on state authorization that the department will publish for early implementation “as soon as possible.” As such, Auer Jones wrote, “the Department will assume that California will modify its plan” for the time being.

Dive Brief:

  • California’s DCA announced last week that it developed a formal complaint process for residents attending nonprofit private and public online colleges located out of state.
  • Those students’ access to federal aid lapsed as a result of a court decision earlier this year that the U.S. Department of Education must implement a 2016 federal rule that pertains to state authorization requirements for distance education providers.
  • Some 80,000 students were affected.

Dive Insight:

How quickly the Ed Department can get its state authorization rules published is another matter. Comments closed on July 12; the rules got around 200 new comments during that time, which must be considered before a final rule is issued.

“Best case scenario, you assume agencies can do this in about 60 days,” said Terry Hartle, senior vice president for government and public affairs at the American Council on Education (ACE), in an interview with Education Dive. That would put the new rules out in early-to-mid September.

Hartle said the Ed Department would likely give states the authority to implement the rules immediately, something Auer Jones reinforced in her Aug. 2 letter to California’s DCA.

The situation came to a head in July after the outcome of a lawsuit brought by the National Education Association (NEA), a teacher’s union, forced the Ed Department to implement the 2016 rule retroactively to May 26. The rule intends to raise consumer protection standards for online education providers that enroll students in states in which the institution is not physically located. The department said it was holding back because California had not yet set up a system to comply with the rule.