Panel considers tightening standards for out‑of‑state online colleges, NC‑SARA membership debated

The House Education Committee held a public hearing on House Bill 1064, a proposal drafted by the State Board of Higher Education and the North Dakota University System (NDUS) to revise Century Code chapter 15‑18.1 and strengthen authorization standards for postsecondary institutions that serve North Dakota students, including out‑of‑state online providers.

Lisa Johnson, vice chancellor for academic and student affairs at the North Dakota University System, introduced the bill and said the proposed edits are intended to “tighten that language up around standards so that outside educational providers are meeting the same standards that our public colleges and universities… operate” under. Claire Gunwal, director of academic affairs for NDUS, told the committee the changes would clarify definitions (including distance education and credentials), require accreditation by U.S. Department of Education‑recognized agencies, and add a federal financial responsibility composite score requirement of 1.5 or greater.

Gunwal said roughly 2,400 institutions meet NC‑SARA qualifications nationwide, about 500 institutions currently operate in North Dakota under existing rules, and about 5,400 North Dakota students were taking classes from those institutions. The bill would also require out‑of‑state institutions that teach North Dakota students to join the National Council for State Authorization Reciprocity Agreements (NC‑SARA), which NDUS staff said aligns state authorization with a national framework and reduces administrative burden.

Several members of the committee pressed for details on the “composite score” used to assess financial responsibility. Gunwal said the composite is multi‑factor and related to Title IV reporting and that she would provide the technical details to the committee. Committee members also asked whether the parent company’s financials or the individual institution’s finances govern the composite score; NDUS staff said NC‑SARA uses the parent company score in its current practice.

Representatives of large national providers and health‑care educators opposed the bill as drafted. Dr. Sue Subach, associate president and provost at Walden University (owned by Adtalem Global Education), said the measure “would serve as a barrier” to programs that supply nursing and social‑work education to North Dakotans unless amended. She said some parent companies rely on alternative Department of Education mechanisms (letters of credit and other assurances) to demonstrate financial responsibility and noted Atalem reported $219,000,000 in assets on its June 30, 2024 balance sheet. Dr. Subach and Adtalem representatives said the parent‑company composite requirement has rendered some institutions ineligible for NC‑SARA participation and that, as currently written, HB1064 could cut access to online health‑care education used by residents.

The North Dakota Hospital Association and the Greater North Dakota Chamber voiced opposition, citing workforce needs and concerns that the bill would reduce educational pipelines for in‑state health care employers. Hospital Association president Tim Blaslow said roughly 150 North Dakotans were taking online health‑care courses with the providers represented at the hearing and warned further restrictions could worsen the state’s nursing shortage.

The committee closed the hearing on HB1064 with no immediate vote. Sponsors and opponents signaled willingness to discuss amendments: NDUS staff asked for authority to streamline state authorization while several witnesses requested changes to the composite‑score requirement, NC‑SARA language, or clearer definitions of physical presence and financial assurances.