On October 28, 2010, the federal government published final rules under the "Program Integrity" strand of the most recent round of negotiated rule-making. In the draft rule, no reference was made to state regulation of out-of-state distance learning or other activity, but the final rules addressed this issue directly. Under the new rules, in force effective July 2011, universities and colleges that participate in Title IV funding, and operate in multiple states, whether in terms of recruitment or offering distance learning programs, must comply with whatever "authorization to operate" regulations are in place in those states where the institution has enrolled students, or is otherwise active based on state definitions. By 1 July 2011, all Title- IV eligible universities and colleges must be able to document compliance to the federal government, upon request.

In some respects, this ruling acknowledges the status quo. Historically states have authority over a higher education institution's license to operate, and some states have explicitly interpreted "operate" to include various kinds of physical presence by an out-of-state school, and even distance learning. In other respects, this is uncharted territory. This is the first time the federal government has formally ruled on this issue, and at present, there is neither consistency among states in terms of statutory language and enforcement, nor consistency among universities and colleges in terms of licensing type and volume.

 For additional information visit:  http://wcet.wiche.edu/wcet/docs/state-approval/FinalStateApprovalRegulationsforDistanceEducationAStarterListRevised.pdf