Although many colleges with distance-education programs are seeking authorization to operate in other states, a majority are turning away students in certain states as a way of avoiding the high cost of applying to operate in them, according to a report released on Wednesday.
The report, which was based on a survey conducted by three distance-education groups, says that about two-thirds of the nearly 200 colleges surveyed had applied for approval in at least one state, up from one-third in 2011. But the three organizations—the Sloan Consortium, the University Professional and Continuing Education Association, and the WCET-WICHE Cooperative for Educational Technologies—also found that only 10 percent of institutions had not turned away students in some states.
The U.S. Department of Education has required for decades that institutions receive authorization from the states in which they enroll students before they may receive federal student-aid funds. But for many years colleges assumed the requirement did not apply to online programs. And department officials looked the other way—until afederal rule, adopted in July 2011, explicitly extended the requirement to online and distance-education programs.
Though the rule was quickly overturned, many states proceeded with new regulationsfor institutions operating distance-education programs within their borders. Some states, like Maryland, passed laws that required out-of-state institutions to pay a $1,000 fee and to register. Others, like Minnesota, sent "cease and desist" letters to institutions that refused to comply with the process.
The chief obstacle for many colleges is the fees to apply for authorization in each state, which could cost an institution tens of thousands of dollars if it sought authorization in all 50 states. As a way to avoid such steep costs, some colleges have simply turned away students who apply from states with higher application prices, including Alabama, Arkansas, Maryland, Massachusetts, and Minnesota.