European-American University™

Part 1 - States excluding Oregon and the "Oregon group"

Historically in the United States, the control of the university title and the granting of degrees has been the preserve of individual states rather than Federal law. State laws on these areas vary considerably. Until the 1990s, in many states, anyone could form a university and grant degrees without further ado, and without the requirement of external authority, providing they adhered to the relevant statutes as far as they affected them. In many cases these statutes were not particularly restrictive. Since the 1990s this has changed in response to public sector protectionism against self-regulating private sector competition via distance learning, and it is now more likely that statutes will demand that external authority be sought for the operation of private universities, if such operation is permitted at all.

State licensing - California, Hawaii, Alabama and elsewhere
Most states have enacted such statutes that govern the behavior of universities, the nature of curriculums and impose various requirements upon them, usually to do with consumer protection issues. These requirements form the basis of the system we now know as "state licensing" for private universities.

For example, California has had various systems of state licensing, with the most recent of these administered by the Bureau for Private Postsecondary and Vocational Education (BPPVE). The state's statutes impose curriculum requirements and other operational restrictions with the aim that the consumer is protected and that institutions of very low or no academic quality cannot operate legally within the state. The BPPVE's role has been to enforce these statutes. However, the BPPVE entered sunset on July 1, 2007 and no replacement agency is yet agreed. This appears to mean that at the present time, although the statutes obviously remain in force, responsibility for their policing will fall to another non-specialist department of the state government. It is expected that a replacement for the BPPVE will be in place within six months from the BPPVE sunset.

Hawaii, too, permits the establishment and operation of private universities, but circumscribes them more strictly than does California. Statutes there provide, among other requirements, that the university must have a minimum number of enrolled students in Hawaii, maintain a permanent representative there and clearly disclose in its advertising that it is not accredited by an agency recognized by the US Department of Education or CHEA (the two US Federal bodies that recognize accrediting agencies). Prosecution of violations of these statutes is common through the Department of Commerce and Consumer Affairs, which has responsibility for enforcing the statutes.

Alabama has a system of licensing for private postsecondary schools that grants them the authority to operate in the state and secures some minimum standards for that operation, including submitting to site inspections. This system is currently under review.

In some other states, such as New Mexico, private universities established before a certain date are "grandfathered in" against subsequent changes in the statutes that have prohibited or circumscribed newer private universities. There are also a very few locations under United States jurisdiction where there remains no regulation on the establishment of universities and the granting of degrees. Idaho, for example, presently permits unaccredited institutions provided they do not operate within the state. All these situations are subject to change, and the state-specific information in this article may well prove out of date before long.

Changes in state licensing systems
Since the 1990s and in some cases before, state licensing systems have changed considerably under pressure from various parties, most notably the public sector. The most prevalent change has been towards the effective replacement of state licensure systems with reliance solely  on regional and national accreditation systems. This has been a result of lobbying by public sector universities and the accreditation agencies, which have been concerned at competition from private institutions offering distance learning programs via the internet. These commercial interests seek to prevent their competitors from operating legally and therefore aim to replace independent state licensing systems with those depending on regional and national accreditation. The outcome of this is that only institutions which meet the criteria of the accreditors - in other words which are large, wealthy, academically conformist and have substantial physical facilities - will be permitted to operate. New institutions are no longer offered a choice between accreditation or an alternative system of state licensing, but simply given a time-limit by which they must either apply for accreditation or cease to operate legally.

It must be remembered that the regional accreditation agencies in particular are extremely powerful and well-resourced trade associations or guilds whose aim is a market monopoly for their members. In so doing, their supporters have determined that the self-regulating private sector, which they see as their commercial opposition, should be at every opportunity denigrated and excluded from their academic community. This faces the self-regulating sector, composed of mostly small institutions working independently of each other, with a major uphill task. If it loses, as seems overwhelmingly likely in the United States at present, it faces its history being rewritten by the opposition whose strategy is to portray the self-regulating sector - falsely - as devoid of quality, and to put it permanently out of business.

Changes in California
California is effectively one of the last major battlegrounds in this war, involving 1,500 private unaccredited postsecondary institutions serving an estimated 400,000 students. The Association of Independent California Colleges (AICCU) represents only 76 of those institutions, but it is the only organized lobby group fighting their corner on a holistic basis. On the one hand, a revived BPPVE (the most likely solution at present) will not threaten and may well strengthen their position.

On the other hand, the fins of the regional accreditors and their supporters can already be seen circling the water. The California Psychological Association (CPA) has recently renewed its call for graduates of state approved schools that do not hold regional accreditation to be prevented from practicing psychology. Already this lobbying has resulted in a freeze on state approval of any new psychology schools in California since 2001 and those schools being further required to promote a "disclosure statement" stating the limitations on the acceptance of their degrees. These limitations on acceptance have been brought about by the very cartel that now uses them to lambast the self-regulating private sector. No evidence has been brought forward that graduates of the state approved schools are of lower quality than those of the regionally accredited schools.

A further report from the California Performance Review calls for exemption from the licensing process for private schools for institutions that hold national accreditation, to bring about parity with those holding regional accreditation, which are already exempt. Since the licensing process is funded entirely by the participating schools, this will adversely impact private schools not holding regional or national accreditation, which will likely have to bear the increased costs in the approval process resulting from the exemption of nationally accredited schools. If the state genuinely cares about consumer protection, it should not be exempting any secular private school from its licensing process, not least because the standards of that process as it currently stands would, in some cases, be higher than those being applied by certain regional accreditors.

None of this addresses the issue of the quality of education to be had at those schools. It speaks only to the commercial protectionism active in this area and to the circle promoted by the cartel - ensure a monopoly for those inside the cartel, exclude those outside it, and then attack those outside on the grounds that their exclusion from the cartel limits their usefulness to the consumer.

Changes in Wyoming
Wyoming is a more typical example of the nature of the changes brought about by the cartel. Until 2006, Wyoming's system of private school licensing permitted institutions to operate in the state without seeking accreditation if they observed certain statute conditions, including posting a bond, having an office and representative in the state, using a disclaimer and accepting some curriculum restrictions on the admission of experiential learning to degrees. An earlier change in the law requiring institutions to have a physical presence in the state had expelled around 50 schools.

Pressure from the cartel brought about a campaign to change the law again to exclude the self-regulating private sector on the grounds that allowing the self-regulating sector permitted the operation of diploma mills. When first raised in 2005, lawmakers resisted this pressure,


However, the pressure continued, and Bill 06LSO-0063W2 was proposed, again making accreditation compulsory. In August 2005, school representatives gave testimony before the Private School Licensing Subcommittee of the Joint Education Interim Committee. Some of the larger schools supported accreditation. Those which were smaller or strongly internationally-based (in some cases with campuses located exclusively outside the U.S.) opposed such moves. At the meeting in December 2006, Dr. Jerry Haenisch of Preston University said,


The only institutions that stood to benefit from the proposed change were those large enough to bear the costs of accreditation and whose constituencies were either U.S.-based, or internationally-based and looking for a U.S. distance learning program at the high-cost level set by accredited schools. The schools that were to be outlawed were those which competed with the accredited sector by offering low-priced programs and those whose operation was international rather than purely U.S.-based, thus exposing them to markets where the accredited sector could not compete on equal terms.

Meanwhile, the Wyoming Department of Education took the view that reliance on accreditation both reduced its financial burden (because it did not then need to run a separate licensing scheme) and protected the reputation of the state from being "a haven for diploma mills". That reputation was never fairly based, and was the outcome of media lobbying by the accreditation cartel. Issues of quality in the specific schools that were state-licensed were neither known nor discussed in the process detailed above. Although some diploma mills and schools of low quality had indeed operated in Wyoming over the years, the most egregious of these, Hamilton University, was religiously exempt from licensing rather than being licensed by the state, and disappeared after earlier changes to the religious exemption laws in 2004.

The bill did indeed become law in July 2006, with the result that Wyoming had placed the interests of the accreditation cartel ahead of the opportunities offered by the free market. In this case, unlike some others, it had heard the arguments in some detail, but had either failed to see beyond the politics of the process to its hidden dynamics of competition and vested interests, or accepted that these vested interests were appropriate custodians of its educational process, whatever the public detriment.

One result of the bill was to prevent at least one school from operating at all in the state. The most recently state-licensed school, EC-Council University, was turned down by all of the applicable accrediting agencies because it had not been in business for two years by the time of the state deadline for it to seek accreditation, and had no option but to seek state licensing in another state (in its case, New Mexico). This provision in Wyoming's change of law represents clear unfairness to new schools, effectively preventing a new school from being established in the state.

Newport International University, meanwhile, has filed suit against the state, claiming that the state constitution prevents forcing private individuals to enter into contracts with other private individuals. The Department of Education requested that the state dismiss the lawsuit as of July 2007, and further developments are awaited.

>>Continue to Part II - Oregon and the ODA, which discusses licensing in that state and in those which have copied its stance in recent years.

The future of state licensing
Ironically, given the move towards the replacement of state licensing systems with reliance on regional and national accreditation, recent proposals at Federal level (also supported by ACTA) have suggested that power be removed from the accrediting cartel and given back to the states themselves, who would then be charged with responsibility to determine the standards for schools operating within their borders and the kinds of education that they wanted to see promoted. This proposal raises the possibility of a move towards the free market and towards the encouragement of innovation and diversity in education that has, for example, been a consistent characteristic of California's private schools.

More recently, the suggestion has been made that the U.S. Department of Education should itself take on wider responsibility for institutional accreditation rather than devolving this to the regional and national accreditors, and that colleges should be required to show acceptable performance results in order to determine their eligibility for student aid. This proposal would end the stranglehold of the accreditation cartel, but only to replace it with control by central government. It remains to be seen which of these two evils would be preferable.

It seems likely that state licensing is currently in a similar position to that of homeschooling during the 1970s and 1980s. During that time, state legislators did their best to outlaw homeschooling or restrict its practice by covering it in impenetrable layers of red tape. However, homeschoolers organized themselves and formed the Home School Legal Defense Association. Action by the HSLDA then ensured that the state laws on homeschooling were subject to legal challenge. To no-one's surprise, most proved unconstitutional and melted away into history.