The laws surrounding educational institutions in the United States are complicated. Every state has its own set of rules and regulations, making it challenging to understand which ones apply in any given situation. A common belief is that when offering educational programs, state authorization is necessary before you can start enrolling students in your school.
However, this isn't always how it works, as in some cases, some post-secondary institutions can be exempt from these regulations. Here's what you need to know to determine if your institution may be eligible for an exemption.
This type of exemption is available in almost 30 states, and more are adding a process for approval. If you're an organization that offers only religious programs leading to professions closely related to this field, then this could be the right fit. You'll want to check out my website if you're interested in learning more, or you can also check out one of the posts I've written on the topic.
Avocational or Recreational Education Programs
Generally speaking, if the programs you offer don't lead to any career or professional status, most states will exempt your educational institution from their oversight. These programs are considered "recreational" and are offered as relaxation or for teaching the fundamentals of a game.
It's important to note that if the training is used for any of the following purposes, the exemption would likely be lifted, and you'd need to obtain state authorization. It's important to make sure that none of the programs on offer match any of the criteria below:
- enabling the qualification of immigration status
- training in a language skill or training preparation for the TOEFL (Test of English as a Foreign Language) qualification
- assistance with coursework or test preparation for graduate or undergraduate degree coursework
- assistance in obtaining employment
Members-Only Educational Programs offered by Trade, Business or Professional Organizations
This is a harder exemption to get than many others and is restricted to only a few states with very stringent regulations. In Georgia, for example, eligibility is only offered to institutions without degree programs. To see if you're eligible, you'll need to understand the specific regulations applicable in the state.
Test Preparation Institutions
Exemptions may be available for institutions that meet the following test preparation criteria:
- Assistance with exam preparation for students seeking admission to post-secondary institutes. This preparation could include the SAT or the American College Test (ACT)
- Offers license exam preparation, including through a continuing education program
Some states may exempt institutions that don't offer degree programs. These institutions typically teach a particular skill set, such as cooking or auto mechanics. In some cases, the institution might be allowed to offer a certificate of completion but not a degree.
The non-degree program process is different in each state.
Some states have shorter, cheaper, and faster application processes for non-degree programs, while others will require a full application. In some cases, a state could consider you exempt based on the tuition fee, but this varies wildly from state to state. It's essential to understand the local regulations.
Federal Government Regulated Institutions
An institution run by the Federal Aviation Administration (FAA) or another similar federal agency isn't required to get state approval.
Something to Think About
State laws are notoriously strict regarding schools and the content that is taught. If you think your institution may be eligible for an exemption from state supervision, don't just assume you're OK without verifying your status first! I’ve had clients come into my office after being operational for one or two years without a letter from the state indicating they were exempt, which is against regulations.
State regulations can vary drastically from state to state, so it's crucial that you research which ones will grant your exemption before making any investments. Make sure to get clear answers to all of your questions in advance, either directly from state officials or through detailed research.
Before you start teaching, it's essential to have in place all of the documentation and material you need. To that end, you need to submit an application to verify your exempt status in your state. While the application is fairly simple, it does require significant documentation and collateral.
After you are found eligible for the exemption by state officials, remember that your continued compliance with these requirements is necessary to maintain the status. Renewals generally occur every 2 years, and if you fail to maintain the exemption, you may find yourself subject to state supervision once again.
For additional help or assistance, feel free to call me so that I can better understand your needs. I'm also available via email to answer any questions.