First step: State approval
Universities in the United States are overseen by three organizations known as the regulatory triad. A member-based private, non-profit organization called a certification body. and the U.S. Department of Education.
State chartering is the first point of entry for new institutions seeking to become universities. Even if a school is not interested in accreditation or federal funding from the Department of Education, it still needs state approval to recruit or enroll students. Companies typically cannot even call themselves universities unless they are sanctioned by the state. UT Austin was nicknamed “UATX'' until Texas state accreditor, the Texas Higher Education Coordinating Board (THECB), gave the school the green light in October 2023.
Each state typically has one or two agencies that oversee “traditional” higher education institutions, or non-profit schools that award degrees (rather than certificates). The American Enterprise Institute's study examines the wide range of documentation that state charterers require from prospective colleges. Most states require schools to submit faculty resumes, blueprints and floor plans of campus buildings, and a list of classroom equipment. In some cases, clear requirements may be attached to this document. For example, Mississippi requires each classroom to have a minimum of 600 square feet of floor space. However, in many cases, whether a school's plan passes convocation is left to the discretion of the school. Individual approver. Many authorizers, including THECB, require schools to have “reasonable” or “adequate” teacher-to-student ratios, but these conditions typically remain undefined.
In practice, this means that state accreditors typically evaluate prospective schools on how similar they are to existing colleges. However, new entrants to the market often want to innovate and may deviate from standard models to reduce costs or increase efficiency. Although new schools may view requirements that teachers hold terminal degrees as outdated or counterproductive, such policies may also invite increased scrutiny from state charterers.
In fact, state charterers are more likely to approve institutions that not only resemble existing universities but also often do so. teeth Existing universities. This is true not only in Texas but nationwide. According to federal data, many of the “new” universities established in Texas over the past quarter century are a combination of new campuses in established systems, such as the University of Texas and Texas A&M University, and a small number of specialized institutions, such as seminaries. It is something.
But there is probably no recent precedent for a large, independent, degree-granting nonprofit institution like UT Austin, at least in Texas. Michael Shires, UATX's chief of staff and vice president of strategic initiatives, said it has been 60 to 70 years since the Lone Star State approved a new institution in the same category as UATX. (He THECB, which was founded 59 years ago, could neither confirm nor deny that schedule.)
Shires told me that many state governments have “layered a lot of new rules and regulations on top of the law” since the last time they established a new nonprofit university. “One of the challenges we faced was finding a path to stand up a new agency and interpreting the code that had all these new layers on top of it.” Texas Governs State Licensing The chapter on his statutes is 80,000 words long.
UT Austin's original application to THECB was 1,200 pages long and included an additional 700 to 800 pages of supporting documentation. After the school submitted the application, the first response from THECB was, “We cannot open this huge 1,200-page document with all the graphics and tables on the school computer, so we have to break the application into smaller parts. It was a call for division.” Shires. “He had to split the file into six parts so he could actually open it.”
As UATX discovered firsthand, state approval timelines can be frustratingly long. The school was officially launched in November 2021, filed for accreditation in December 2022, and received accreditation in October 2023. This equates to more than a year of preparation, plus a 10-month formal process for approval. Initial approval timelines may vary from country to country, but 10 months is not unusual.
Many states also impose limits on the number of institutions or programs they approve each year. For example, UATX was only allowed to launch with a single degree program.
Shires emphasizes that Texas has been a “partner” throughout the permitting process. But still, he says, “time equals money.” “That's one of the really big lessons in starting a new university. It's a very expensive process.”
Texas was at least open to the idea of a new university. Many other states are at best uninterested in establishing new universities, leaving state licensing systems on the back burner. Researcher Molly Hall Martin says some states only have one full-time employee dedicated to chartering new universities. In the median state, state grantor funding represents only 0.04% of total state support for higher education. Many agencies privately complain that they receive little help from state governments to navigate the licensing process and that licensees are not available to answer questions.
In some cases, once the new university receives approval from the state government, you can finish there. However, in most cases, universities must take the additional step of accreditation. Federal funding requires approval from accredited institutions, and graduate schools typically accept only students who have graduated from accredited universities. To be competitive, new schools need both federal funding and guarantees that their graduates will be able to attend graduate school. In addition, most state accreditors require that a school be accredited or on a path to accreditation as a condition of initial accreditation. Therefore, from a practical point of view, state accreditation is only the first hurdle that a prospective university must clear.