Higher Education Authorization Act

The Higher Education Authorization Act aligns the for-profit higher education sector with the Drive to 55 by reshaping its regulatory framework, providing fast-track authorization for currently accredited institutions and directing the Tennessee Higher Education Commission (THEC) to redesign regulation for non-accredited institutions. This statute was last updated in 1974, and these changes will transform a cumbersome and outdated structure in order to increase productivity and modernize consumer protections.

Why is change in the for-profit sector needed?

The current regulatory structure of private proprietary, for-profit, and not-for-profit schools was developed by the Postsecondary Authorization Act of 1974 and has not been substantially modified since that time, despite the dramatic changes occurring in higher education over the last four decades.

The 1974 statute applies a singular regulatory approach to schools that are structurally and academically distinct, as well as dissimilar in mission. Institutions possessing acknowledged higher education accreditation are regulated in the same manner as vocational trade schools that award certificates, reflective of the prescriptive 1974 statute; applying one regulatory scheme to different types of educational delivery is outdated.

The current authorization process mandates extensive state examination of institutions that, in many cases, have already received significant accreditor scrutiny and evaluation.

What does the new regulatory framework do?

  • The primary feature of the new regulatory framework is an optional, expedited “fast-track” path for institutions to pursue authorization that acknowledges the academic accreditation achieved by the respective campus.
    • Institutions in good standing with an accreditor recognized by the U.S. Department of Education, coupled with other consumer protection safeguards, can apply for the fast-track authorization from THEC. Fast-track authorization will:
      • Substitute the repetitive reporting and mandatory reviews currently imposed upon regulated institutions holding recognized accreditation.
      • Eliminate redundant requirements where accepted, well-established structures and standards already exist with respect to institutional quality, consumer protection and financial responsibility.
    • If an institution loses fast-track authorization by failing to maintain the necessary standards for eligibility, that institution is barred from reapplying for two years and becomes subject to more stringent regulatory review.
  • THEC is directed to develop new administrative rules with direct stakeholder collaboration for unaccredited schools.
  • Additionally, as a new consumer protection mechanism, THEC will provide comprehensive performance data to the public on institutions receiving fast-track authorization. This information will allow prospective students to review and evaluate institutional outcomes such as graduation rates, gainful employment figures, costs of attendance, default rates, and transferability of credits/degrees for institutions.

SB2564/HB2573