REGULATING INNOVATION


Te poor economy has caused nearly every institution to learn how to deal with fewer and fewer resources. With state funding decreasing and endowment funds diminishing as well, successful institutions of higher education are thinking of new ways to attract students and maintain financial viability. Te concern here is that regulations will stifle, or at least forestall, such innovation.


Te state authorization regulation related to dis- tance education (34 CFR 600.9), which, as a matter of federal law, required online programs to be authorized by states that regulated distance education, is an exam- ple of just this result. Now, it is highly doubtful that the administration actually intended to slow down the growth of online education by passing this rule–partic- ularly as it would most likely affect non-profit entrants that are new to online education. But the result is that schools are reluctant to embark upon distance educa- tion programs given the regulatory uncertainty and high cost of getting approved in so many jurisdictions.


While this rule was vacated on administrative grounds by the DC Circuit Court of Appeals (Association of Private Sector Colleges and Universities v. Duncan (June 5, 2012)), schools still face a more active state- based regulatory system that, absent the completion of reciprocity agreements and other state compacts, will leave schools in the same place and less likely to enter distance education in a robust fashion.


On the other hand, the Department of Education


deserves credit for not standing in the way of perfor- mance-based funding. With the need for increased productivity in higher education, and fueled by sup- port from the Lumina Foundation and the National Governors Association (NGA), states and institutions


JULY/AUG 2012 • TODAYSCAMPUS.COM


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