Office of Postsecondary Education - U.S. Department of Education

66858 Federal Register / Vol. 75, No. 209 / Friday, October 29, 2010 / Rules and RegulationsWReier-Aviles on DSKGBLS3C1PROD with RULES2State Authorization (§§ 600.4(a)(3),600.5(a)(4), 600.6(a)(3), 600.9, and668.43(b))General—No Mandate for a StateLicensing AgencyComment: Several commentersbelieved the proposed regulationswould create mandates for States tocreate new State oversight bodies orlicensing agencies, or compel States tocreate bureaucratic structures thatwould further strain higher educationresources. Some commenters believedthat a majority of the States would haveto modify licensing requirements oradopt new legislation and that theregulations would cause a major shift inState responsibility.Discussion: These final regulations donot mandate that a State create anylicensing agency for purposes of Federalprogram eligibility. Under the finalregulations, an institution may belegally authorized by the State based onmethods such as State charters, Statelaws, State constitutional provisions, orarticles of incorporation that authorizean entity to offer educational programsbeyond secondary education in theState. If the State had an additionalapproval or licensure requirement, theinstitution must comply with thoserequirements. In the case of an entityestablished as a business or nonprofitcharitable organization, i.e., not as aneducational institution, the entity wouldbe required to have authorization fromthe State to offer educational programsbeyond secondary education. Whilethese final regulations require thecreation of a State licensing agency, aState may choose to rely on such anagency to legally authorize institutionsto offer postsecondary education in theState for purposes of Federal programeligibility.Changes: None.Comment: Several commenterssupported the proposed regulations asan effort to address fraud and abuse inFederal programs through Stateoversight. An association representingState higher education officials notedthat despite differences in Statepractice, all the States, within ourFederal system, have responsibilities toprotect the interests of students and thepublic in postsecondary education andsupported the basic elements ofproposed § 600.9. A State agency officialpraised the Department’s proposedregulations but suggested that theDepartment insert ‘‘by name’’ in theproposed § 600.9(a)(1) to provide someprotection against recurrence ofsituations such as the one in Californiawhen the State licensing agency lapsedprior to the State renewing the agencyor a successor to the agency and noState approval was in place that namedan institution as licensed or authorizedto operate in the State.Discussion: We appreciate the supportof the commenters. We agree with thecommenter that a State’s authorizationshould name the institution beingauthorized. We believe that by namingthe institution in its authorization forthe institution to offer postsecondaryeducation in the State, the State isproviding the necessary positiveauthorization expected under § 600.9.Changes: We are amending proposed§ 600.9, where appropriate, to recognizethat an institution authorized by namein a State will meet the Stateauthorization requirements as discussedfurther in response to other comments.Comment: Some commenters believedthat the proposed regulations exceededthe Department’s authority andinfringed on the States’ authority. Onecommenter requested that the proposedregulations be eliminated becauseprivate institutions are authorizedthrough various unique authorizations.Another commenter believed that theproposed regulations upset the balanceof the ‘‘Triad’’ of oversight by States,accrediting agencies, and the FederalGovernment. One commenterquestioned whether the Departmentcould impose conditions restricting aState’s freedom of action in determiningwhich institutions are authorized by theState by requiring that a State’sauthorization must be subject to, forexample, adverse actions and provisionfor reviewing complaints. Thecommenter believed that there was nointent to have the Department imposesuch conditions. Another commenterbelieved that proposed § 600.9unnecessarily intruded on each State’sprerogative to determine its own lawsand regulations relative to theauthorization of higher educationinstitutions and to define the conditionsfor its own regulations. One commentersuggested that the Department onlyapply proposed § 600.9 to the problemareas that the commenter identified assubstandard schools, diploma mills, andprivate proprietary institutions.One commenter believed that theproposed regulations would infringeupon the States’ sovereignty bycommanding state governments toimplement legislation enacted byCongress. Specifically, the commenternoted that under the proposedregulations the States must adoptlegislation or rules that expresslyauthorize institutions to offerpostsecondary programs and furthermake such an authorization subject toadverse action by the State and that theVerDate Mar2010 14:10 Oct 28, 2010 Jkt 223001 PO 00000 Frm 00028 Fmt 4701 Sfmt 4700 E:\FR\FM\29OCR2.SGM 29OCR2proposed regulations would require thatStates establish a process to act oncomplaints about the institution andenforce State laws against theinstitution. The commenter believedthat the Department would improperlydirect State officials to participate in theadministration of a federally enactedregulatory scheme in violation of StateSovereignty. By doing so, thecommenter believed that the FederalGovernment would be forcing Stategovernments to absorb the financialburden of implementing a Federalregulatory program, while allowing theFederal government to take credit for‘‘solving’’ problems without having toask their constituents to pay for thesolutions with higher Federal taxes. Thecommenter believed that theDepartment cannot construe the HEA torequire a State to regulate according tothe Department’s wishes. Thecommenter believed that such aconstruction would exceed theDepartment’s authority under the HEAand violate the States’ rights under theTenth Amendment.Discussion: We disagree with thecommenters that the proposedregulations exceed the Department’sauthority and infringe on States’authority. Under the provisions of theHEA and the institutional eligibilityregulations, the Department is requiredto determine whether an institution islegally authorized by a State to offerpostsecondary education if theinstitution is to meet the definition of aninstitution of higher education,proprietary institution of highereducation, or postsecondary vocationalinstitution (20 U.S.C. 1001 and 1002) asthose terms are defined in §§ 600.4,600.5, and 600.6 of the institutionaleligibility regulations. In accordancewith the provisions of the HEA, theDepartment is establishing minimumstandards to determine whether aninstitution is legally authorized to offerpostsecondary education by a State forpurposes of Federal programs. Theproposed regulations do not seek toregulate what a State must do, butinstead considers whether a Stateauthorization is sufficient for aninstitution that participates, or seeks toparticipate, in Federal programs.Contrary to the commenter’ssuggestion that the Department isupsetting the Triad, we believe theseregulations clarify the role of the States,a key participant in the Triad, inestablishing an institution’s eligibilityfor Federal programs. Further, theDepartment believes that clarifying theState role in the Triad will address someof the oversight concerns raised by