Education Institutions Prepare For Department's Final Rule On State Authorizations, Consumer Disclosures

• Published date: 19 June 2020
• Author: Mr Kristina Gill and Katherine D. Brodie
• Subject Matter: Consumer Protection, Education, Dodd-Frank, Consumer Protection Act
• Law Firm: Duane Morris LLP

It is particularly important that institutions develop policies that adhere to the timing and distribution requirements for the consumer disclosure requirements for programs leading to professional licensure or certification.

On November 1, 2019, the U.S. Department of Education published a final rule regarding state authorization. The new rule is effective July 1, 2020. This Alert highlights required changes for state authorization and consumer disclosures, some of which apply to institutions offering on-ground programs. Key changes include: modification of Title IV state authorization requirements; a new definition regarding student location for state authorization purposes; new consumer disclosure requirements for programs that prepare students for professional licensure; and significant new and amended consumer disclosure requirements.

Institutions should carefully review the changes made by the new rule and prepare to amend their consumer disclosures to comply with the new requirements by July 1, 2020. It is particularly important that institutions develop policies that adhere to the timing and distribution requirements for the consumer disclosure requirements for programs leading to professional licensure or certification.

State Authorization - 34 CFR 600.9(c)

The final rule leaves unchanged the requirements in Section 600.9(a), including that for an institution that has physical presence in a state, that state must offer a process to review and appropriately act on complaints concerning the institution, including enforcing applicable state laws, for the institution to meet the state authorization requirements. The final rule removes the requirement that institutions demonstrate the availability of a student complaints process in each state and, rather, requires institutions to provide students with contact information for filing complaints with its state licensing agency under 668.43(b).

The final rule makes the following additional changes:

• Section 600.9(c) mandates that "An institution that offers postsecondary education through distance education or correspondence courses to students located in a State for which the institution is not located must meet state requirements in that state or participate in a state authorization reciprocity agreement." Institutions must satisfy these requirements as a condition of Title IV eligibility.
• Section 600.9(c)(1)(ii) provides that an institution covered by a reciprocity agreement is considered to meet...