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To Enroll or Not to Enroll?

What you need to know about the Physical Presence standard

Once upon a time, there was an institution that accepted students from outside of its state into its online degree programs, yet did not seek authorization in those states. The university either was unaware of the distance education rules for online degree programs or thought it would be okay to let this one student (or two…) slide. Au contraire – the school suffered the repercussions of operating illegally in another state.

The Physical Presence Standard

When it comes to state authorization and distance education, there are ground rules that universities must play by, namely the physical presence standard. Each state has a different interpretation of physical presence, which includes the following:

  • Physical location in that state, including a physical building, mailing address, or phone exchange.
  • Advertising (via print, billboard, direct mail, internet, radio, television, or other medium) or recruiting students.
  • Holding proctored exams on behalf of the institution in the host state.
  • Having a student residing or taking the bulk of the online program in the host state.
  • Employing faculty, adjunct faculty, mentors, tutors, or other academic personnel in the state.
  • Clinicals, internships, externships, field experiences, and so on, for students in that state, regardless of whether the student is an online student residing in said state or enrolled in a face-to-face program and travel to said state to complete the internship component.

As discussed in a previous article, the penalties for non-compliance include cease and desist orders from state agencies, penalty fees, more stringent controls once authorization is obtained, damage to the reputation of the institution through negative publicity, a ban on operating in that state, lawsuits, and even the loss of accreditation, to name a few.

Repercussions for the Student

There have been several instances of an institution not going through the proper channels to obtain authorization in a state where it has students and has suffered the repercussions. But what happens to the student?

Take, for example, the student from Minnesota who enrolled in an online degree program at a university in another Midwestern state. It turns out this university did not have authorization to operate in Minnesota. The student decided, after a while, that this was not the program for her. She withdrew late in the term, after the withdrawal date. She had paid only a small tuition amount and so owed the university some money. Eventually, the debt was referred to a collection agency. The student responded to the university by stating, “This debt is uncollectable because you were operating illegally in my state.”

What’s a university to do? The university contacted the appropriate agency in Minnesota and was told that not only was the debt uncollectable, but the university had to refund all of the tuition the student did pay to avoid any legal action.

Students can file lawsuits as well. This happens most frequently in disciplines involving professional licensure. Our second example starts with the same premise: There was a student in one state who enrolled in an online degree program at a university in another state. This time, the student completed the degree, and went to sit for the licensing exam. However, the examiners did not recognize the degree because the university was not authorized in that state. The student was upset, having put so much time and effort into obtaining this degree, and filed a lawsuit for a refund of the tuition. In a similar situation, the student was denied licensure because the credit hours from the university did not meet the minimum standard credit hour total.

These lawsuits typically don’t become public because the state and the institution usually come to an agreement and settle before a court date.

Moral of the Story? Verify Authorization Before You Enroll

The goal and purpose of state authorization is to protect the student. If there is any doubt as to the legitimacy of enrolling a distance education student in your online program, check the State Authorization web page first for an up-to-date list of states in which UMKC is currently authorized. For additional information, contact the State Authorization Coordinator.