Vol. 15 : No. 6
Removing Regulatory Restrictions to E-Learning
from The Power of the Internet for Learning: Moving from Promise to Practice
Report of the Web-Based Education Commission
The legacy of the one-room schoolhouse is holding back the potential of the one-world classroom.
The regulations that govern much of education today, from pre-kindergarten to higher education, are focused on supporting the welfare of the educational institution, not the individual learner. They were written for an earlier model, the factory model of education in which the teacher is the center of all instruction and all learners must advance at the same rate, despite their varying needs or abilities.
Students in this model are expected to spend 7 years in K-6 schooling, another 6 in secondary schools, 2 years in earning an associate's degree or 4 for a bachelor's. Graduate programs have their own inflexible number of credits, courses, and years at one institution as the required rite of passage.
Funding follows this progression, and is based on the time a student spends in class ("seat time") and the location of that student and that educational program. Estimates for school construction, educational services, and materials are built on these time-fixed and place-based models of yesterday.
These regulations and requirements no longer match today's realities.
High school students can take courses offered online, at their own schedule, and complete them when they pass the appropriate tests. According to some estimates, only 16 percent of today's college students meet the old stereotype of attending full-time, enrolling right after high school, and living on campus.  Course content comes not just from a textbook or materials passed out in class by the teacher, but from many sources, in many formats, and even created by the students themselves. Time, institution, and location do not form the defining elements of education.
If not changed, yesterday's regulations will inhibit the potential for new learning opportunities for a new generation of students of all ages.
What is needed, in short, is a wholesale rethinking of the regulatory foundations governing our educational institutions. The Internet cannot be ignored in any such effort of regulatory reform.
Regulation in a Nation of States
In other countries national education ministries set policy. However, our tradition of state and local control of education, particularly in the elementary and secondary arena, presents a special challenge in the Internet era.
Each state establishes its own regulatory structure, and therein lies the challenge. The past physical presence assumed for schooling is no longer a given. Educational content and services at the olementary, secondary, and higher education levels are increasingly delivered across state lines. The regulatory schemes of 56 operational units (states, territories, and Washington, DC) are "dramatically different, ranging from the extremely prescriptive (New York) to minimal (Delaware) and in isolated cases non-existent (Montana)."2
The PreK-12 Education Regulatory Environment
The nation's pre-kindergarten-grade 12 schools face regulation from the federal and local levels, as well as the states. They are subject to countless administrative procedures implemented in an age that predated the Web; many of these procedures cannot accommodate the Internet's agility. School leaders are increasingly confronted by a desire to innovate but are unable to overcome the timeworn rules that dictate the school day, year, delivery systems, and accounting requirements.
The Commission received testimony on a wide range of specific concerns. Witnesses cited:
Credit policies including the difficulty of transferring and accepting credit across district and state lines and the problem of aligning curriculum standards from one state to another.
Financing policies involving inflexible state budgeting processes, the inability to redirect resources to support distance learning on a per student basis, and less than adequate funding to support the online learning endeavor.
Quality assurance issues that address a need to reform state licensing and approval processes to better access the educational value of content and courses available online.
Attendance policies that set the number of hours and days in the classroom as defining measures of achievement alongside other indicators of academic progress.
Teacher certification policies that prohibit the transfer of credentials from state to state, thereby inhibiting the growth of online delivery of instruction beyond state lines and creating disincentives to develop new online learning models.
Teacher-student ratio requirements that may not take into account the ability of web-based learning to individualize instruction.
Staff compensation requirements that are formulated around 10-month agrarian-model contracts.
Accounting procedures that restrict the use of funding to support web-based instruction based on structural rigidity, rather than academic integrity.
The Postsecondary Education Regulatory Environment
The amount and type of postsecondary regulatory oversight at both the state and federal levels varies depending upon the type of institution: for-profit institutions (often called "proprietary")are the most highly regulated, followed by non-profit institutions ("independent"), and public (state or local) institutions. For the purposes of state law, an out-of-state public institution is generally treated as an independent or, in some cases, a proprietary institution.
Depending upon where they operate and the kind of programs offered, institutions face a variety of regulatory requirements. Independent institutions generally are regulated by regional accrediting agencies while proprietary schools often fall under the purview of other regulatory bodies. For example, proprietary schools in Texas are regulated by the Texas Workforce Commission rather than the Texas Higher Education Coordinating Board.  Similarly, proprietary schools in California are regulated by the Department of Consumer Affairs, not the California Department of Education. 
While there are strong reasons for this multifaceted control of education, they often do not apply in an environment characterized by borderless educational opportunities.
This challenge was recognized in the 1980s when telecommunications technology meant that broadcast and cable television could be used to deliver "telecourses" across jurisdictional lines. At that time the State Higher Education Executive Officers Association and the Council on Postsecondary Accreditation created Project ALLTEL (Authorization and Licensure of Learning via Telecommunications). The goal was to create a national-but not federal-framework for the regulation of what was that era's distance learning challenge: a proliferation of telecourses of varying levels of quality.  The aim was to set up a system in which states would accept the review of the accreditor of the state where the offering institution was located. The effort failed when states could not agree on a common regulatory framework.
There are unintended and unanticipated consequences of this complex nest of rules and regulations:
These issues were raised many times by witnesses testifying at our hearings and through e-Testimony submissions to the Commission. For instance, some states require no approval process for establishing online programs; others require a simple letter explaining their program. Yet another was reported to require an institution to provide an all-expense paid visit to its main location and honoraria to its staff. Fees, reporting requirements, and time required for approval also varied from immediate permission, to a two-year backlog of applications followed by a two-year waiting period. 
Beyond these institutional concerns, there are additional barriers for learners. The Internet now makes it possible for a student to purchase a course from his or her local university around the comer, or an institution half a world away. But the same course can be priced very differently. "In-state versus out-of-state tuition rates, non-profit designation, non-profits spinning out for-profits, and for-profit companies create a web of cost structures and tuition regulations that prevent students from choosing the curriculum and price that best meet their needs."  This same maze makes it difficult for students to transfer credits from one institution to another and to create the personalized programs that also best meet their needs.
The Internet allows for a learner-centered environment, but our legal and regulatory framework has not adjusted to these changes. "Law is by its nature a slow and deliberative process, and the closer its orbit comes to the development and use of technologies that are changing rapidly, the more likely its impact will be unintended." 
Federal Statutory and Regulatory Barriers
The federal government has struggled to establish within statute and regulations a framework that accommodates the promise of the Internet for postsecondary education while promoting access and ensuring accountability.
The effort has had mixed results.
Three specific federal issues were brought to the Commission's attention: the " 12-hour rule," the "50 percent rule," and the federal prohibition on providing incentive compensation in college admissions.
The 12-hour Rule
When Congress amended the Higher Education Act in 1992, it added a specific definition of an academic year that prescribed at least 30 weeks of instructional time. Full-time undergraduate students in traditional academic programs are expected to complete at least 24 semester hours or trimester hours (or 36 quarter hours, or 900 clock hours) in that time period to be eligible for the maximum amount of financial aid under the Title IV program.
However, the law was silent on establishing an academic workload requirement for students enrolled in Title IV eligible programs offered in a nontraditional time segment.
To deal with this, the U.S. Department of Education developed regulations to implement the statutory definition of an academic year, including establishing full-time workload requirements for students enrolled in programs offered in nontraditional time segments. In 1994, the Department issued formal regulations defining a week of instructional time to mean 12 hours of "regularly scheduled instruction, examinations, or preparation for examination" for programs that are not offered in standard terms.
The 50 Percent Rule
Likewise, the "50 percent rule" requires Title IV-eligible institutions to offer at least 50 percent of their instruction in a classroom-based environment. The basis of this rule is to assure that a student is physically participating in an academic course of study for which he or she is receiving federal student financial assistance. In enacting this provision in the 1992 Higher Education Amendments, Congress sought to address concerns about fraud and abuse within the correspondence school industry.
While understanding that physical seat time may not be an appropriate measure of quality for the increasing proliferation of online distance learning programs, the Department views these two rules as important measures of accountability that should not be eliminated or replaced unless there is a viable alternative.
In recent months, public, independent, and proprietary colleges and universities have called for the elimination of the 12-hour rule and the 50 percent rule or, at minimum, a moratorium on their enforcement.
These institutions argue that the rules simply don't make sense in light of online distance education and the growing use of the Internet for instructional delivery. As one witness put it: "If we are to be required to assess educational quality and learning by virtue of how long a student sits in a seat, we have focused on the wrong end of the student." 
Far from creating incentives for students and institutions to experiment with new distance education methodologies offered anytime, anyplace, and at any pace, the current student financial aid regulations discourage innovation. If a student cannot travel to an institution and participate in face-to-face instruction, that student may only qualify for reduced financial aid. The practical impact is a system of federal student financial assistance that gives substantial preference to the mainstream educational experience. 
In seeking correctly to halt abuse in the student financial aid program, these rules may, in fact, have the unintended effect of curtailing educational opportunity among thousands who seek financial aid for college, but who do not otherwise fit into the mainstream definition of a college student. Consider these statistics:
The span from 1970 to 1993 saw a 235 percent growth in students over age 40.
The U.S. Department of Education is beginning to identify potential alternatives to providing student aid to those enrolled in online programs. In October 2000, it convened dozens of representatives of traditional and nontraditional postsecondary institutions, higher education associations, and the student financial aid sector to address alternatives to the 12-hour rule. The Department's position has been that a wholesale elimination of these rules would leave the door wide open for abuse-and the history of the Title IV program has been marked with such episodes. Instead, the Department is seeking to identify alternatives to current regulation, and assess whether or not they may be more appropriate than current seat-time measures. The Department holds strongly to the belief, however, that rules of some kind are necessary under any circumstance.
Institutions take a different position. Many question the need for the Department to be involved on the regulatory side at all since these institutions already are subject to two sets of quality controls: approval for participation in the Title IV program and accreditation and licensure. They argue that if the problem is with accrediting agencies that are not organized to assess quality effectively in an online learning setting, the answer is to reform the accreditation process, not add another enforcement layer upon postsecondary institutions.
The University of Phoenix, among the nation's oldest distance learning proprietary institutions, offered the following recommendations in support of this view: 
The Department is hosting several working groups with the higher education community to focus on student aid funding for online programs, alternative input and output measures of online quality, and the role of accreditation in assuring academic integrity in the Title IV program. A result could be a statement of the problem and potential alternatives to be considered by Congress and/or Department regulators.
Additionally, the Department will analyze the results of the Distance Education Demonstration Program authorized by the Higher Education Act Amendments of 1998. This program exempts 15 institutions and consortia of institutions from the different rules and regulations limiting student financial aid for online postsecondary learners. The goal is to encourage distance education providers to experiment with alternative measurements of online quality and gather data on the success of these alternatives. The results will be presented to Congress along with any proposed changes the Department recommends in this area.
Ban on Incentive Compensation Plans
In 1992, Congress prohibited colleges and universities that participate in the federal student financial aid program from paying any commission, bonus, or other incentive payments to third party entities based directly or indirectly on their success in helping to secure enrollment of students.
The provision was enacted to protect students against abusive recruiting tactics, although the law is now being interpreted to apply to the enrollment of students via "Web portals." These online "Yellow Pages" are commonly financed through the use of referral fees and tuition-sharing agreements. Although not the original intent, the language of this restriction effectively bars higher education institutions that participate in Title IV from using third-party Web portals to provide prospective students with access to information about many institutions or provide the same services as institutions offer on their own Web sites-that is, information and application processing.
Current federal regulations permit an institution to use its own Web site to recruit students. However, if the institution pays a Web portal to provide the same passive, asynchronous service, and that payment is based on the number of prospective students visiting the site who ultimately apply or enroll, the institution is at risk of losing its Title IV eligibility. Higher education groups have asked the Department to consider changing regulatory language, reflecting the growing reliance of higher education consumers on Web portals. However, the Department has concluded that this provision could only be changed through new legislation.
Copyright Protection: Horse and Buggies on the Information Superhighway
"The primary objective of copyright is not to reward the labour of authors, but [t]o promote the Progress of Science and useful Arts. To this end, copyright assures authors the right to their original expression, but encourages others to build freely upon the ideas and information conveyed by a work. This result is neither unfair nor unfortunate. It is the means by which copyright advances the progress of science and art." 13
"In a digital age, the organization of data and editorial function of summarizing, hyperlinking, and relating diverse sources of data to meet specific ad hoc needs adds value to content, and represents an emerging class of intellectual capital that goes beyond the concept of 'derivative works' or similar earlier classifications ... The Internet turns 'consumption' of electronic media into a Breeder Reactor scenario for knowledge building. Effective use of these materials results in additional fuel to power learning in the classroom." 
Copyright law serves to balance the legitimate intellectual property rights of authors, publishers, and other copyright owners with society's right to the free exchange of ideas. The Copyright Act of 1976 established principles that make it possible for researchers, students, and members of the public to benefit from access to published information. That access is supported by the concept of "fair use," the provision to reproduce materials under certain circumstances.
In the Digital Millennium Copyright Act of 1998, Congress requested the U.S. Copyright Office of the Library of Congress to study the impact that copyright laws might have on online education. It recognized that changes in copyright law might be necessary to ensure that fair use of information is equally available to students and researchers in the digital as well as physical realm.
Congress specifically directed that the law be reviewed "with an eye toward promoting distance education."  With input from publishers, higher education, libraries, and other users and producers, the Copyright Office presented its report, "Copyright and Digital Distance Education,"  to Congress in May 1999. The recommendations include clarifying the meaning of transmission to include digital as well as analog and eliminating the requirement of a physical classroom. Hearings were held on this report, but no legislative action has been taken.
Copyright remains a major concern to educators, researchers, and librarians as well as publishers, developers, and copyright holders. Current copyright law governing distance education is over 20 years old and was based on broadcast models of telecourses for distance education. That law was not established with the virtual classroom in mind, nor does it resolve emerging issues of multimedia online, or provide a framework for permitting digital transmissions. 
Educators and library representatives maintain that the current pay-per-view business model used in education bypasses, and thereby negates, explicit provisions in the copyright law intended to protect and encourage educational use of copyrighted material.  They maintain that for web-based education to achieve its potential, students should be able to access remotely all educational material available to students in a physical classroom, and be able to do so from any location at any time (e.g., from a college student's dorm room computer on the weekend or from the home of a working adult in the evening).
Educational institutions seek the ability to use copyrighted works in a digital environment comparable to what the law currently allows in a face-to-face classroom.
This current state of affairs is confusing and frustrating for educators. Many educational institutions report having difficulty with licensing for digital distance education. Professors complain about being forced to obtain licenses to use the same works in an online course that they are allowed to use under fair use provisions in a face-to-face classroom.
After teachers complete the task of determining who the copyright owner is, they often face delays in locating the owner, obtaining permission, and possibly incurring costs.
The gap between the technology of distance learning and the language of the current copyright statute threatens the element of spontaneity from online instruction that the current statute affords in the analog world. It may cause online course developers to compromise their content, and has deterred some educators from entering the world of distance education altogether.
These following examples were offered by the e-Testimony of the American Association of Community Colleges: 
The confusion on digital copyright use can be especially frustrating for K-12 educators who want to demonstrate appropriate copyright use with their students but are limited in the time and resources they can devote to acquiring rights to materials. Concern about inadvertent copyright infringement appears, in many school districts, to limit the effective use of the Internet as an educational tool. Schools are in a position of potential liability if a teacher or student fails to understand or appropriately apply copyright law and posts material on a school Web site. "The only way a school can fully protect against financial liability is to take a totally hands-off role with respect to the Web pages it posts on a school site, which no school should do." 
Proposals to amend the Copyright Act and update fair use provisions are opposed by publishers. They correctly point out that the risks of unauthorized dissemination of copyrighted works are greater in an online environment than in a physical classroom, and maintain that technological safeguards are not yet widely available to prevent unauthorized uses. Without adequate safeguards the artists, writers, designers, programmers, and educators who create new works for instruction may not be appropriately compensated for their creativity.
One representative of the publishing community stated it this way:
"If [publishers] are not adequately compensated, our society will suffer from their withdrawing their work for the public sector, a loss to society as a whole and education in particular ... Since no one is advocating that Congress should enact legislation eliminating the need to pay for computers, software, Internet access, faculty salaries, cost of administrative personnel and processes and tuition in connection with online education programs, why should the costs of course materials-and, therefore, the copyright owners who create and produce them-stand alone as exempt from payment of fair market value in a competitive marketplace?" 
The publishing industry is also concerned that the confusing landscape and consolidation of nonprofits and for-profit providers of educational content make policy based on public versus private good difficult, if not impossible, to define.
We are entering the 21st Century with antiquated regulations of educational policy and inappropriately restrictive copyright laws. It is as if we tried to manage the interstate highway system with the rules of the horse and buggy era. Although the federal government has a legitimate role in monitoring how its funds are used and in protecting intellectual property, it is clear that a radical rethinking of the relevant body of regulation and law is in order. Otherwise the Internet will remain more a province of auctions and games, than a place for genuine learning.
About the Authors:
This report is the
work of literally thousands of educators, legislators, and members
of the public. It deserves detailed study by those developing
public policy and legislation as well as educational planners,
parents, and students. You are encouraged to view and print out
the entire 185 page report from the web at http://interact.hpcnet.org/webcommission/index.htm