WASHINGTON — Tens of thousands of students in California enrolled in online classes at out-of-state colleges abruptly lost federal financial aid this week after they found themselves in the cross-fire of a regulatory fight between Education Secretary Betsy DeVos and the nation’s largest teachers’ union.
The students who lost their aid are the unlikely victims of an effort by the union, the National Education Association, to stop Ms. DeVos from delaying a rule written by the Obama administration to bolster consumer protections for students taking online courses at schools not based in their states.
Ms. DeVos had warned that states were not ready to enforce the rules, and the teachers rebuffed those concerns. A judge sided with the union, leaving the students without aid.
“We tried to delay the implementation of the 2016 rule because of its many flaws — including this consequence for California students,” said Liz Hill, a spokeswoman for the department. “Unfortunately, the N.E.A. filed a lawsuit, and a judge ruled that we have to implement the rule.”
The union accused the department of a vindictive maneuver to punish its members, regardless of the costs to students.
“The Department of Education’s determination to harm students, either through its incompetence or vindictiveness, is unacceptable,” Lily Eskelsen García, the president of the National Education Association, said in a statement. “We remain willing to help the department implement the protections in a way that does not jeopardize critical loans and Pell grants for students.”
The 2016 regulations, issued in the waning days of the Obama administration, sought to ensure that students taking such courses would not be left saddled with debt but gave no assurance that the courses would provide employment in the states in which they reside. The rules, part of a series of measures to challenge predatory for-profit colleges, also required schools to disclose whether their online programs were under investigation by the state attorney general or a college accreditor, and to set up a complaint system for students enrolled in out-of-state institutions.
Ms. DeVos, acting on the concerns of higher education institutions, sought the delay, citing “widespread concern and confusion in the higher education community.” The groups who had appealed to her for more time specifically warned of California’s vulnerability because it had not set up a complaint system.
But the teachers’ unions did not buy it. They feared a delay would leave California teachers seeking online educational credits vulnerable to predatory attacks with no guarantee that their online programs would meet state standards for teacher certification. In August 2018, the National Education Association and the California Teachers Association sued Ms. DeVos, saying the department had not followed the proper administrative procedures in delaying the rules.
They won. In April, a federal district court judge in California ordered that the Obama rule go into effect.
On Monday, the Education Department published a notification announcing that California was out of compliance with the rule and suspended financial aid to about 80,000 students in the state who were enrolled in “distance learning” classes.
And while the Obama-era rule was aimed at for-profit colleges that specialize in online offerings, the California students affected all attend private and public nonprofit institutions that are widely regarded as high-quality leaders in online learning, such as Arizona State and Western Governors universities. California students enrolled in online courses at for-profit colleges are covered by a state law.
The American Council on Education, an association representing more than 1,700 college presidents, sent a letter to the department on Thursday pressing for emergency action.
Noting the imminent start of the academic school year, the organization said that its members were scrambling to help students who were already enrolled in classes, and had suddenly lost access to Pell grants and federal student loans.
“In short, the likely outcome will be that thousands of students are either forced to drop out of, or never begin, postsecondary education,” the group wrote. “We have already heard from several institutions that will do whatever they can to address any gaps in student funding that occur as a result, but this is at best a temporary solution.”
The American Council on Education was among those that first wrote to the department warning that the Obama-era rule could affect states, including California, that were not in full compliance.
In anticipation of the rule’s 2018 start date, every other state moved to create a complaint process or enter into multistate reciprocity agreements that would bring them into compliance with the rule. California did not.
“This is a debate about obscure regulations, but one with immediate, real world consequences,” said Terry W. Hartle, a senior vice president of the council. “The irony is that a lawsuit that was intended to protect students has had the unanticipated effect of taking money away from 80,000 students without any warning.”