The Long-awaited Implementation of State Authorization Requirements

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This has certainly been an interesting year on many levels. The COVID-19 pandemic shook the landscape and ended up delaying a lot of regulations throughout the accounting world. However, the Department of Education did not delay final regulations on state authorization for distance education programs. Get the detail below:

As of July 1, 2020

Silhouettes of students with graduate caps in a row on sunset background. Graduation ceremony at university web banner.As a part of Title IV program eligibility, the Department of Education finally implemented state authorization requirements (which have been a hot topic for years now). Documentation must be maintained by institutions for any state in which enrolled students are located for all states that require it. In general, disclosures must be directly provided to prospective and enrolled students participating in programs leading to professional licenses.

These requirements are complex and require each institution to review its programs and student populations to make sure all boxes are checked. Institutions should work towards developing systematic approaches to properly research and assess state licensing requirements.

An institution’s policies and procedures should be used to determine the state in which the student is located. Such determinations are to be consistently applied to all students. While the student’s initial enrollment is used to make this determination, institutions should note a change of state location if it has been formally notified by the student.

Per the Department of Education 34 CFR 668.43(1)(5)(v), if an educational program is designed to meet educational requirements for a specific professional license or certification that is required for employment in an occupation, or is advertised as meeting such requirements, information regarding whether completion of that program would be sufficient to meet licensure requirements in a State for that occupation, including:

  1. A list of all States for which the institution has determined that its curriculum meets the State educational requirements for licensure or certification;
  2. A list of all States for which the institution has determined that its curriculum does not meet the State educational requirements for licensure or certification; and
  3. A list of all States for which the institution has not made a determination that its curriculum meets the State educational requirements for licensure or certification.

If an institution determines a program does not meet educational licensure or certification requirements in the state where the enrolled student is located, the institution has 14 days from that date to directly notify the student. This notification must be in writing, which would typically be in the form of an email or letter to the student.

State Authorization Reciprocity Agreement (SARA)

The National Council for State Authorization Reciprocity Agreements defines the State Authorization Reciprocity Agreement (SARA) as a voluntary agreement establishing comparable national standards for postsecondary distance education programs among its member states. This agreement is intended to make it easier for students to take online courses from postsecondary institutions based in a state in which the student does not reside. Postsecondary institutions offering distance education/correspondence courses to students that are not located in the same state as the institution must meet state requirements in that state or participate in a SARA to fulfill these requirements. 

As noted earlier, these regulations went into effect on July 1, 2020. This means that any audits with year-ends after June 30, 2020 will be subject to these new requirements. Have you gone through all your programs and properly assessed how these regulations will impact your operations? Do your disclosures properly address these new regulations? Like most changes, getting a proper plan in place up front is going to help alleviate any findings or issues down the road. Contact us for help getting started.

This publication contains general information only and Sikich is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or any other professional advice or services. This publication is not a substitute for such professional advice or services, nor should you use it as a basis for any decision, action or omission that may affect you or your business. Before making any decision, taking any action or omitting an action that may affect you or your business, you should consult a qualified professional advisor. You acknowledge that Sikich shall not be responsible for any loss sustained by you or any person who relies on this publication.

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