U.S. Department of Education Rejects California’s Student Complaint Process But Provides Path to Compliance
August 5, 2019
Institutions should consult with counsel to understand the risks associated with continuing to disburse aid to California students based on the revised complaint process that the Department expects California to implement.
Late on Friday, August 2, 2019, the U.S. Department of Education sent a letter to the California Department of Consumer Affairs that rejected California’s proposed complaint process for Californians attending online programs offered by out-of-state public and nonprofit institutions, but provided a clear path to compliance and a promise not to disrupt federal student aid, assuming California takes the steps outlined in the letter. We previously summarized aspects of the 2016 State Authorization Rule in our July 23, 2019, and July 26, 2019, Alerts.
Here are four key takeaways from the Department’s letter.
1. Federal student aid to Californians will not be disrupted IF California takes the steps outlined in the letter to meet the 2016 State Authorization requirements.
The Department’s August 2 letter “assumes” California will do three things: (1) modify its plan to refer student complaints to a California state agency for adjudication, (2) require a California state agency to oversee the investigation of the student complaints and resolve them, according to applicable California state law, and (3) receive complaints regarding issues starting from at least May 26, 2019, the date that the 2016 regulations went into effect.
The letter states that “with those modifications made, the Department will consider California to have had an acceptable plan in place dating back to May 26, 2019. Thus, no student will experience an interruption in his or her education or federal student aid.”
Institutions should consult with counsel to understand the risks associated with continuing to disburse aid to California students based on the revised complaint process that the Department expects California to implement.
2. A complaint process that simply refers the complaint to another agency does not meet the requirements of the 2016 State Authorization Rule.
The Department’s letter clearly states:
To the extent that the process proposed by California involves simply referring a complaint to an institution’s accrediting agency or another agency in the State in which the institution is located, it does not appear to comply with the 2016 regulations. It would be difficult for an accrediting agency or an agency in another State to enforce applicable California laws, and without participating in a reciprocity agreement, California could not simply refer student complaints to the State in which the institution has a physical presence. Moreover, it appears that in some instances you would be depending upon non-California entities, such as accreditors or other States, to “investigate and resolve” a complaint.
The Department’s letter confirms that there must be a state agency where the student resides that is responsible for “oversee[ing] the investigation of a student complaint and issu[ing] a final determination to resolve that complaint.”