Editor's pick: Originally published Jan. 15.
Distance learning, where students attend class while sitting in front of a computer, is higher ed's fastest growing segment according to a 2014 Senate Health, Education, Labor and Pension committee report. Some observers also fear that they operate in uncharted—and unregulated—waters, where students are vulnerable to scams.
That's because distance learning or online schools are allowed to set up shop in states, where they have no physical presence. Through deals made with state legislators, they avoid regulations that must be observed by schools that do teaching in a classroom, according to a December 14 report last month from the National Consumer Law Center (NCLC).
"Most states either exempt such schools from state oversight or have signed toothless state reciprocity agreements that prevent states from enforcing for-profit school consumer protection laws," said Robyn Smith, Los Angeles-based Of Counsel for NCLC. 34 states have used these agreements, called State Authorization Reciprocity Agreements, or SARAs, that exempt schools from complying with state consumer protections aimed at preventing for-profit college fraud.
When states sign SARAs, students are denied reimbursement from the state for economic losses due to a sudden shutdown of a school or program, full refunds for withdrawal before the first day of class, private student loan refunds following withdrawal before graduation and the right to file complaints with state oversight agencies. The online schools engaged in these practices are owned by for-profit colleges facing state and federal lawsuits. The schools include the University of Phoenix, which is facing six separate lawsuits and investigations, along with Ashford University, facing four lawsuits, and Kaplan University, facing three.
SARAs, and their implementation, are supported by the National Council for State Authorization and Reciprocity Agreements found at SARA.org. Funded by the Lumina Foundation and the Bill and Melinda Gates Foundation, the group says its goal is to regulate distance learning. Critics say that this is precisely what SARA.org is trying to avoid.
The distance learning industry has already circled the wagons in response to the federal government's attempt to make regulations. ED announced last year that regs that were supposed to roll out in November. In a June 14 letter to then-Secretary of Education Arne Duncan, the Online Learning Consortium, the University Professional and Continuing Education Association and the Western Co-operative of Educational Telecommunication expressed concern about ED's proposal to look into distance learning at the state level. Undersecretary of Education Ted Mitchell was identified as a supporter of the industry's objections. Duncan’s departure last month may have been a complicated matters.