Online Education: Interstate Reciprocity

Enrollment in online courses has increased substantially over the past decade.  Online, educational offerings are flexible and allow students to develop the skills they need to be competitive in the job market even if they cannot regularly attend class and/or are located remotely.  The current, complex regulatory environment in the states inhibits many institutions from delivering these courses across state lines.  CSG’s National Center for Interstate Compacts, in conjunction with the Presidents’ Forum and with support from the Lumina Foundation, is developing an interstate compact to allow greater reciprocity in online education among the states.

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The past decade has seen rapid growth of both higher education and information technology. Quality higher education is increasingly in demand as students strive to get the skills they need to compete in a global economy. Rapid advances in information technology have the potential to revolutionize higher education beyond traditional brick-and-mortar institutions, providing greater access to higher education through online distance learning.
The complexity and diversity of state laws, unfortunately, has made the approval process for online learning options costly for institutions facing increasingly restricted budgets, often leaving students underserved. The Presidents’ Forum, in conjunction with The Council of State Governments and with support from the Lumina Foundation, has begun work on a Multistate Reciprocity Compact to address these issues while protecting students.
Online Learning
The Sloan Consortium, a nonprofit membership association focused on integrating quality online education into the mainstream of higher education, defines an online course as “A course where most or all of the content is delivered online, (and the course) typically has no face-to-face meetings.”1 The consortium also identifies an online course as one where the proportion of  content delivered online is 80 percent or greater. Online learning, however, can also be a smaller component of course delivery. Accordingly, in the Sloan Online Surveys, online learning is just one category that falls on a spectrum of educational options.
The convenience and flexibility of online courses make for a compelling educational option, given the need for workforce development in a rapidly evolving global economy. Working adults who need to retrain but lack the freedom to move often find these course options most appropriate. As the chart on page three illustrates, online courses are expanding rapidly.
Since the consortium’s Sloan Online Surveys began, the proportion of students taking at least one online course has tripled. Such curricula have the potential to serve students no matter where they live, as long as Internet access is available.

The Sloan Consortium identifies the following categories for course content distribution:

  • Traditional courses have no content delivered online; content is delivered in writing or orally.
  • Web-facilitated courses are those that use Web-based technology to facilitate what is essentially a face-to-face course. These courses may use a course management system or Web pages to post the syllabus and assignments. Anywhere from 1 to 29 percent of the content is delivered online.
  • A blended/hybrid course delivers from 30 to 79 percent of content online, with the rest being face-to-face delivery. A substantial proportion of the content is delivered online, it typically uses online discussions and has a reduced number of face-to-face meetings.
  • An online course is one in which 100 percent of the content is delivered online, with typically no face-to-face meetings.

Interstate Reciprocity

One of the key challenges to providing greater access to higher education choices, including distance learning, is the existing patchwork of state laws that create expensive and duplicative regulatory burdens. Regulating higher education traditionally has been left to the states. Because state policymakers developed these regulations when students physically attended colleges and universities, the scope of the regulations does not address courses offered predominantly online, making it difficult for institutions that focus on distance learning across multiple state jurisdictions to receive the necessary approval to operate.
As the law firm Dow Lohnes highlights in its report, “The State of State Regulation of Cross-Border Postsecondary Education,” physical presence is one of the critical issues contributing to regulatory complexity. The report found that 81 percent of state agencies use a variety of notions of “physical presence” to determine whether out-of-state institutions fall under their state’s regulatory authority. North Carolina exercises its authority only over programs that have a presence of employees, computer servers and/or an office. Florida, in contrast, applies its authority to any institution wishing to offer a degree, diploma or credit, thus casting a wider regulatory net. Texas, Utah and Washington add to the complexity with different agencies within the same state applying “physical presence” in different ways.2 This patchwork of laws creates a significant burden and often has a limiting effect on institutions and states that might otherwise attempt to expand access to their programs.
Given the opportunity that information technology now provides, institutions could deliver online coursework to any location with Internet access. A national compact effort, as opposed to a federal alternative, could provide one mechanism through which interstate reciprocity could be achieved—a cooperative and mutually beneficial relationship where the standards for coursework in one state would be trusted and welcome in the other. Thus, one state can trust the educational standards of another. Then, the institutions in those states can open their educational opportunities to all residents of the compacting states, which would likely mean a more educated and employable workforce to drive state economies, less regulatory costs for institutions, and that in turn would mean cost savings and greater educational opportunity for students.
CSG and Presidents’ Forum Jointly Explore Interstate Reciprocity Compact
As technology improves and the demand grows for increased access to higher education through distance learning, institutions and the states that regulate them have expressed a desire to find more efficient ways to promote interstate reciprocity. The Presidents’ Forum and CSG, with support from the Lumina Foundation, have been working to develop an interstate compact designed to promote reciprocity and save states and institutions valuable time and resources. Work began in September 2010 when the Presidents’ Forum convened a multistate reciprocity task force to explore the challenges associated with interstate reciprocity and recommend potential improvements that could be made to the existing system. Following the work of the task force, CSG and the Presidents’ Forum, in conjunction with a drafting team comprised of subject matter experts, began drafting an interstate reciprocity compact.
The Presidents’ Forum drafted a white paper, “Toward a Model Template Upon Which an Interstate Reciprocity Compact of College and University Program Authorization Could be Based,” to serve as a starting point for the work of the drafting team.3
The drafting team hopes to have compact legislation ready for an extensive stakeholder review by the summer of 2012. While considerable work remains, the compact is expected to address who will be affected by the compact; the responsibilities of the home and host state; and reciprocal standards upon which state approvals to operate will be granted. The compact language is also expected to address things such as governance, dispute resolution, the rule making process, and the minimum threshold needed to trigger commission activities.
Once the compact language is finalized it will be shared with a wide range of stakeholders for review and comment before being sent to state legislatures for consideration and adoption. The goal is to have language ready for consideration by state legislatures as early as the 2013 session.


1 Allen, I. Elaine, Seaman, Jeff. Babson Survey Research Group and Quahog Research
November 2011. 
2 Goldstein, Michael B., Lacey, Aaron D., Janiga, Nicholas S. Dow Lohnes PLLC. “The
October 2011.