USA - The Digital University and tighter regulation of universities

The U.S. government has tied eligibility of colleges and universities for federal student aid money to compliance with regulations, our colleague Robert Smith at LeClairRyan has informed us. Supposedly compliance with regulations will give an indication of the quality and sincerity of educational institutions. While the colleges and universities have expressed opinions that more than 3,000 of these requirements could be removed in order to save time and resources and increase profitability, the regulators appear to just be adding to the list of rules the colleges and universities have to comply with.

This is because there has been a general out-cry for greater regulation of the “digital university”. As the number of people taking distance-learning and online course increases so does the number of questionable “universities” and dubious online degrees, dubbed by some to be “online diploma mills”. In the process of trying to crack down on this practice the regulators have put in place so-called “program integrity” rules to keep the for-profit institutions in check, with the effect of adding significant reporting requirements on mainstream colleges and universities as well. The rules put the onus on schools to prove that their programmes lead to positive outcomes for students and prepare them “for gainful employment in a recognized occupation”.

In view of the recent rise in claims against law schools in the US for misrepresenting employment figures of their alumni, this requirement by the regulators could lead to even more claims in all sectors if students do not find employment. The regulation of the bogus “digital universities” may have set a ball rolling which will greatly harm the traditional universities as the legislation does not appear to differentiate between the areas which require greater regulation and those which have been over-regulated, merely adding regulations on top of the existing ones.

Higher education institutions in the UK which are considering offering their courses online in the U.S. may also find that they will have to comply with the new regulations that are being put in place. In addition they should be aware of the ongoing developments in the "law school litigation", the outcomes of which will determine whether the provision of higher education may be affected by the shift to a "consumerist model"

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