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

Federal Register / Vol. 75, No. 209 / Friday, October 29, 2010 / Rules and Regulations66865WReier-Aviles on DSKGBLS3C1PROD with RULES2evaluate the institution. Based on ourconsideration of the public comment,we believe that standard should be atleast 20 years of operation. As in thecase of accreditation, such an exemptioncould only be used if the State hasestablished the entity as an educationalinstitution. As noted above, a State mayuse a separate process to recognize byname the entity as an educationalinstitution that offers programs beyondthe secondary level if an institution wasnot authorized by name to offereducational programs in its approval asa legal entity within a State. We notethat a State may also base a licensingexemption on a combination ofaccreditation and the number of yearsan institution has been in operation, aslong as the State requirements meet orexceed at least one of the two minimumrequirements, that is, an institutionmust be fully accredited or must havebeen operating for at least 20 years.If an institution is established as alegal entity to operate as a business orcharitable organization but lacksauthorization to operate by name as aneducational institution that offerspostsecondary education, the institutionmay not be exempted from Statelicensing or approval based onaccreditation, years in operation, orcomparable exemption from Statelicensure or approval.We do not believe that permittingsuch exemptions from State licensingrequirements will distort the oversightroles of the State and an accreditingagency. We believe these comments arebased on a misunderstanding of the roleof a State agency recognized by theSecretary under 34 CFR part 603 as areliable authority regarding the qualityof public postsecondary vocationaleducation in its State. Publicpostsecondary vocational institutionsare approved by these agencies in lieuof accreditation by a nationallyrecognized accrediting agency. As notedin the comments, there are overlappinginterests among all members of theTriad in ensuring that an educationalinstitution is operating soundly andserving its students, and a State mayestablish licensing requirements thatrely upon accreditation in somecircumstances.If an institution’s State andaccrediting agency have differentstandards, there is no conflict forpurposes of the institution’s legalauthorization by the State, as theinstitution must establish its legalauthorization in accordance with theState’s requirements.Changes: We have amended proposed§ 600.9 to provide that, if an institutionis an entity that is established by nameas an educational institution by theState and the State further requirescompliance with applicable Stateapproval or licensure requirements forthe institution to qualify as legallyauthorized by the State for Federalprogram purposes, the State mayexempt the institution by name from theState approval or licensure requirementsbased on the institution’s accreditationby one or more accrediting agenciesrecognized by the Secretary or basedupon the institution being in operationfor at least 20 years. If an institution isestablished by a State as a business ora nonprofit charitable organization, forthe institution to qualify as legallyauthorized by the State for Federalprogram purposes, the State may notexempt the institution from the State’sapproval or licensure requirementsbased on accreditation, years inoperation, or other comparableexemption.ComplaintsComment: An association of Statehigher education officials recommendedthat the States, through their respectiveagencies or attorneys general, shouldretain the primary role andresponsibility for student consumerprotection against fraudulent or abusivepractices by postsecondary institutions.The commenter stated that handlingcomplaints is not a role that can orshould be delegated to nongovernmentalagencies such as accrediting agencies,nor should it be centralized in theFederal Government. Anothercommenter asked about the role of Stateenforcement of laws unrelated topostsecondary institutions licensuresuch as a law related to fraud or falseadvertising. A few commenters askedfor clarification as to whether Stateconsumer protection agencies or StateAttorneys General could retain theprimary role for student consumerprotection and handling studentcomplaints. One commenter believedthat the proposed regulations failed toaddress circumstances where the Statelicensure or approval agency and theagency handling complaints aredifferent agencies.Several commenters recommendedthat the Department allow States to relyon accrediting agencies but require amemorandum of understanding with theaccrediting association that wouldinclude, at a minimum, procedures forperiodic reports on actions taken by theassociation and procedures for handlingstudent complaints. One commenterstrongly believed that accreditingagencies should never be allowed tohandle complaints in lieu of the State.VerDate Mar2010 14:10 Oct 28, 2010 Jkt 223001 PO 00000 Frm 00035 Fmt 4701 Sfmt 4700 E:\FR\FM\29OCR2.SGM 29OCR2One commenter expressed concernthat the Department is requiring Statesto serve as an additional check oninstitutional integrity, but believed thatthere would be no check on the State.One commenter from an accreditingagency believed that proposed§ 600.9(b)(3) is an unnecessary use oflimited public resources, is impractical,and would be impractical and chaotic toadminister. Several other commentersexpressed concern that requiring Statesto act on complaints would beduplicative because 34 CFR 602.23already requires accrediting agencies tohave a process to respond to complaintsregarding their accredited institutions.One commenter requested that theDepartment exempt publicpostsecondary institutions from thecomplaint processes. Otherwise, thecommenter asked that the Departmentclarify that a State is permitted todetermine whether an institution withinits borders is sufficiently accountablethrough institutional complaint andsanctioning processes. One commenterrequested that the Department clarifythat student complaints unrelated toviolations of State or Federal law are notsubject to State process or reviewingand acting on State laws, instead thecommenter believed that studentcomplaints are appropriately addressedat the institutional level. A commenterquestioned how the requirements forState review of complaints relate tostudent complaints about day-to-dayinstruction or operations and whetherthe potential review process representsan expansion of State authority. Thecommenter believes that studentcomplaints that are unrelated toviolations of State or Federal law areappropriately addressed at theinstitutional level and thus not subjectto the process for review of complaintsincluded as part of proposed § 600.9.One commenter suggested that theDepartment’s Office of Ombudsmanrespond to student complaints as analternative if a State does not have aprocess for complaints.Discussion: We agree with thecommenters who believed that theStates should retain the primary roleand responsibility for student consumerprotection against fraudulent or abusivepractices by some postsecondaryinstitutions. For an institution to beconsidered to be legally authorized tooffer postsecondary programs, a Statewould be expected to handle complaintsregarding not only laws related tolicensure and approval to operate butalso any other State laws including, forexample, laws related to fraud or falseadvertising. We agree that a State mayfulfill this role through a State agency or