When people think about eLearning institutions, often the first schools that come to mind are the large universities that market all over the country and attract tens or even hundreds of thousands of students. The University of Phoenix, Capella University, University of Maryland University College, Kaplan University, and a few others are usually on the list of major players.

But as important as they are, and as many students as they serve, they are merely the tallest trees in the incredibly large and diverse forest of online higher education. There are many small providers, including boutique institutions that focus on a particular subject that is otherwise hard to find, brick-and-mortar institutions that also offer one or two programs through eLearning, and new institutions that are just entering the higher education marketplace.

Theres good news this week for those smaller providers who participate in the federal financial aid system (as most do). A proposed regulation that would have required them to apply for licensure in every single state or territory in which they have even a single student has been struck down, at least temporarily, in federal court.

Think about what such a regulation would mean. Imagine you run a smaller institution that wants to make its programs available across the country, especially since one of the whole points of eLearning is that it broadens the choices that students have when it comes to selecting the right school and program. Youve gone through the trouble and expense of gaining a license from the state where you are actually located. Youve gone through the even more laborious process of acquiring recognized accreditation. Youve continued on, and become eligible to participate in the federal financial aid system. Imagine if all of a sudden you were required to go through as many as fifty-odd more processes for licensure, depending on where your students might live!

If theres to be a federal financial aid system, then yes, it makes sense for the Department of Education to oversee and apply rules that are meant to prevent waste, fraud, and abuse. But this kind of multiple licensure requirement will drive all but the largest providers out of online higher education. Not only would that be simply unfair, it would demolish competition and choice for American students — an enormous disservice.

The fight isnt over, and this regulation will probably see another day in court at the appeals level. Heres hoping it stays struck down all the way to the grave!

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