When it comes to consumer protection in higher education, states are the first line of defense. But when a school in one state enrolls an online student who lives in another state, which state is watching out for the interests of the student? Too often, the answer is no one. And what’s more, an interstate agreement that was supposed to solve this problem is actually locking in a system that lets schools get away with no regulation at all.
Despite the tremendous growth of online education, most states have not updated their laws to cover out-of-state providers of online education enrolling students in their states—twenty-nine states require absolutely nothing from out-of-state online schools and hold them to no standards when these schools enroll in-state students. Advocates of the State Authorization Reciprocity Agreement (SARA)—an interstate compact that allows institutions to abide by a single set of regulations, rather than those of each state in which they operate—have marketed the agreement to state regulators and students alike as a way to fill that gap. According to these advocates, SARA supposedly strengthens consumer protection by having a college’s home state take responsibility for protecting out-of-state online students. It’s not a bad concept, but it only works if all students are covered one way or the other, by either the rules of their home state or the institution’s home state. The way it is working out though, many online students have been left wholly unprotected, leaving these students, for example, with no clear forum through which to address complaints against an out-of-state institution.
This means that most online institutions, even in SARA member states, are being held to no regulation at all.
The problem is that SARA is optional for schools and many schools are opting out of the agreement. While some institutions are joining the agreement to avoid future run-ins with state regulators, many colleges—especially the for-profits—are not bothering to join, which leaves them unregulated in the majority of SARA member states. Of institutions in SARA member states, only approximately 10 percent (thirty-nine out of 388) of for-profits offering online education have signed up, and just under half of both private non-profit (274 out of 588) and public (470 out of 1008) online learning providers have joined. This means that most online institutions, even in SARA member states, are being held to no regulation at all.
Editor’s Note: As of October 2016, this map has been updated here.
If SARA is going to be a good solution—and it is far from perfect, as over 30 leading consumer protection and legal advocacy groups have pointed out—it must be an alternative to something rather than an alternative to nothing. If institutions can choose no oversight, then for-profit institutions—the very same institutions that have been repeatedly shown to engage in the most abusive recruitment activities and produce the lowest percentage of graduates—are going to be the ones opting out.
As Century Foundation senior fellow Robert Shireman and I discussed in our comments to the New York State Education Department, New York regulators recognized this problem and are addressing it by eliminating the no-regulation option: if you are enrolling New Yorkers, the draft regulations say, you must either comply with New York’s requirements or join SARA. But other states are being led to believe that signing onto SARA is enough to protect their residents from predatory and low-quality online education. In fact, however, this is not the case. To make matters worse, SARA also limits a state’s authority to take action against an out-of-state SARA institution.
Ultimately, SARA is an insufficient band-aid to the regulatory debacle of online higher education.
Ultimately, SARA is an insufficient band-aid to the regulatory debacle of online higher education. At least in part, the insufficiency of this agreement is due to its optional nature, which highlights the contradictions and ineffectiveness of voluntary regulation. It is time to create a more sustainable and satisfactory solution to the regulation online education bearing in mind that students, rather than schools, must be prioritized.