Some out-of-state online schools must register to teach Arizona residents

Covered schools must apply to the State Board for Private Postsecondary Education for permission to serve Arizona students online. This covers private schools based outside Arizona that enroll Arizona residents in fully online programs, including degree and job-training programs. Active participants in the National Council for State Authorization Reciprocity Agreement, an interstate school approval agreement, are excluded. Schools must show home-state approval, provide financial statements, and submit a sample student transcript. Accredited schools can show financial strength with a current federal financial score greater than 1.5. Schools without accreditation or that fail this test must provide a bond, cash deposit, or bank guarantee based on their prior year's tuition from Arizona residents. Registration lasts one year. Schools must renew annually with board approval and pay board-set fees for initial registration and renewal.

Covered schools without recognized accreditation must submit program and teacher information for board approval and promise student protections. These duties apply to schools covered by out-of-state registration that lack accreditation, a review by an agency recognized by the U.S. Department of Education. Schools must provide home-state-approved program information, show teacher qualifications, and meet home-state standards for course credits and program length. Schools must follow the board's refund policy and tell students they are registered. They must explain complaint steps, provide board contact information, and protect students from retaliation for complaints. Schools must explain that receiving schools decide whether credits transfer. Programs advertised as preparing students for a professional license must disclose whether they meet Arizona's requirements. If the school cannot determine this, it must say the program does not meet them.

Registered out-of-state schools must report major events to the board and keep digital student records. These duties apply to private schools holding Arizona out-of-state registration. Reports cover accreditation changes, loss or suspension of state approval, major financial changes or bankruptcy, and government enforcement actions or lawsuits involving education, consumer protection, or fraud. Schools must also report ownership changes after their home state approves them. Schools must report covered events within 30 days after they occur. They must keep enrollment and financing agreements for at least ten years after a student is no longer enrolled.

Licensed or registered schools collecting tuition in advance must contribute to the student tuition recovery fund under its payment rules. Eligible Arizona residents at private schools subject to Arizona licensing or out-of-state registration may claim repayment. Nonresidents cannot claim. Annual payments equal 0.2% of each first-time student's total course cost, capped at $10 per student and $25,000 per school. Schools owe no payment for nonresident students. If the fund exceeds $500,000 on June 30 and the board gives notice, only schools newly or provisionally licensed during or after that fiscal year must pay. Students must lose money because a school closes before fulfilling its obligations or providing services paid for in advance. The board investigates claims and pays valid ones in an amount it considers reasonable, no greater than the actual loss. School payments are annual. Students must start a claim no later than one year after the school stops operating.