Online school regulation halted; web-based learning jumped 150% in Ohio

Ohio has little control  of institutions beyond state lines.

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By Christopher Magan and Meagan Engle
Staff Writers 11:33 PM Thursday, July 28, 2011

The latest effort to increase oversight of the rapidly growing online education industry hit a wall this month when a federal court struck down a new regulation that would have required schools to register in every state where they have students.

The decision comes as online and distance learning jumped 150 percent in Ohio since 2004 to more than 93,000 students; nationwide 4.3 million students take at least one online course, according to federal and state data.

Much of this growth has been fueled by schools like Kaplan, which operates in 20 states and 30 countries, and the University of Phoenix, which, too, has a global footprint. Traditional schools like Miami University and Sinclair Community College are also offering more web-based courses.

Ohio and other states have little oversight of schools located outside state boundaries.

U.S. Department of Education spokeswoman Sara Gast said the new federal rule was written to “protect students and taxpayers and give clarity about states’ responsibility in this area.”

U.S. District Court Judge Rosemary Collyer tossed out the state authorization requirement, ruling that the department did not allow time for stakeholders to comment.

The “state authorization” regulation was part of a group of new rules approved by the education department earlier this year, many of which targeted the growing for-profit higher education industry. Other rules that were upheld by the court and are now in place limit how much students can borrow for degrees based on what they can expect to earn after graduation and stop “aggressive recruiting practices,” according to federal records.

Taking an online class from a college in another state is allowing Miami University communications major Natalie McKerjee to finish her degree.

McKerjee, who is living in Oxford now, is taking a three-credit hour screenwriting class from a community college in her native California. McKerjee walked in Miami’s spring graduation, and chose to finish her last required credit hours online to save money.

“It was a lot cheaper for me,” she said of the course, which she said is costing about $90.

“It’s just allowed me to take a class without paying out-of-state tuition for a class that doesn’t really apply to my major,” she said. “I definitely think the flexibility is advantageous to the school and the student. I still feel like I’m a part of a classroom. I feel like I’m getting the same level of education.”

The state authorization rule for online education targeted every institution, both for-profit and nonprofit, and would have made offering a wide range of distance courses difficult, said Kevin Kinser, a professor who studies the for-profit industry at the State University of New York–Albany. Some states would have to devise new oversight systems.

“Many states don’t have the sorts of regulations the federal government was asking institutions to meet,” Kinser said.

The authorization process is not uniform state to state, said Cheryl Young, director of lifelong learning at Miami University. Miami has registered in 10 states, with 13 more under review, but 24 states did not respond to the school’s inquiry about authorization, she said.

“Every state is so different,” Young said. “Some states are requiring thousands of dollars for this.”

It also is unclear how any future ruling could affect the University of Cincinnati’s online degree programs because they are offered through a company called Compass Knowledge. Last fall, the university had 1,264 Ohio residents and 2,302 students from other states and countries enrolled in its online programs.

The U.S. Department of Education is mulling whether to appeal the court decision or reissue the rule at a later date, Gast said. What’s clear is the department thinks online education needs more oversight.

Young said she will recommend Miami continue its authorization efforts. “The attention drawn to state laws and rules has kind of changed the landscape for online,” Young said. “All kinds of things could happen, so we’re staying the course. We believe that we do need to be authorized in those states to operate.”

R. David Rankin, executive director of the Ohio Association of Career Colleges and Schools, an advocate of for-profit education, praised the court decision. Current rules, which allow states where online schools’ “brick and mortar” facilities are located, are enough to oversee the fast-growing industry.

“I think we have plenty of regulations,” Rankin said. “The ones we have are fair and balanced for everyone. Why create more bureaucracy?”

Kim Norris, spokeswoman for the Ohio Board of Regents, said the state regulates online schools with a “physical presence” in the state, but some out-of-state institutions are exempt. Norris urged students to be cautious.

“What is most important is for students of all ages to be wise consumers,” Norris said. “Ask questions about elements of their education.”

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