As part of their regulatory oversight of higher education institutions, state governments require colleges and universities to obtain legal authorization to operate within their jurisdiction. This process is intended to protect students from predatory institutions. But it has also been criticized for imposing substantial administrative burdens, particularly for institutions offering online programs across multiple states, which have historically needed to secure authorization from each state where they enroll students. To address this challenge, a group of higher education stakeholders established the National Council for State Authorization Reciprocity Agreements (NC-SARA) in 2013 to advance interstate reciprocity agreements to streamline the authorization process for institutions offering online education. As of 2026, all US states and the District of Columbia, with the exception of California, participate in SARA.

In prior Ithaka S+R research examining shifts in enrollment patterns following NC-SARA’s creation, we found that expanded online markets may increase access for older students, as well as for those who are Black, women, and/or Pell-eligible. However, there are questions about whether increased interstate enrollment and an expanded postsecondary market translate into improved labor market outcomes for these students. Institutional selectivity and reputation are known to influence job opportunities and wages. Similarly, degrees from locally recognized or in-state institutions may confer labor market advantages over those from less familiar out-of-state institutions.

With support from the Joyce Foundation and Strada Education Foundation, Ithaka S+R conducted what is, to our knowledge, the first causal study of how employers value online degrees from out-of-state institutions. The primary objectives of our research were to compare employer evaluations of job candidates who earned a bachelor’s degree online with those who earned a bachelor’s degree in person, and to assess whether and to what extent those evaluations varied depending on whether the degree-granting institution was in- or out-of-state. Today, we are publishing a report that details the study’s findings and methodology.

Study design

To explore employer preferences, we designed and conducted a discrete choice experiment, which was administered through an online survey of 543 individuals in the US who are responsible for recruiting and hiring new employees, including hiring managers and human resource specialists. Participants reviewed 12 different pairs of hypothetical job candidates who varied across six attributes commonly used to assess an individual’s academic preparation, technical aptitude, and potential success in a given job: alignment between field of study and job tasks; institution type; degree program modality; institutional selectivity; work experience; and experience with job-relevant tools and software. Respondents were then asked to select the candidate they would invite for a job interview for a junior-level position appropriate for a recent bachelor’s degree recipient. The analysis of the results examined the effect of degree program modality on the likelihood of selection, how its effects varied by institution type, and whether other candidate attributes as well as respondent and employer characteristics influenced selection.

Main findings and implications

  • Finding: Candidates’ work experiences and skills play a substantially larger role in hiring managers’ decisions than degree program modality and institution type.
    Implication (policy)    : States should push for policies that expand access to relevant work experience, such as promoting apprenticeship programs, given the significant role work experience plays in hiring decisions.
  • Finding: Candidates with online degrees, however, face a modest disadvantage. This penalty is largest for those who earned online degrees from out-of-state public institutions.
    Implication (institutions/students)    : Institutions that enroll out-of-state online students should invest in building employer name recognition in the labor markets where those students are likely to seek jobs. Students choosing among online programs should consider whether an institution is known to local employers.
  • Finding: Hiring professionals in industries aligned with fields of study that have a strong online presence, such as business, health care, and education, do not penalize candidates with online degrees. In contrast, those in industries where online credentials are less common do penalize these candidates.
    Implication (students): Students should also investigate how common online education is within their field.

Broadly, if SARA enables students to pursue degrees they otherwise would not have pursued, evidence on the returns to postsecondary credentials suggests that even a slightly discounted degree is likely to leave students better off than having no degree at all.

If you’re interested in learning more, see the full report, which provides comprehensive information on the study’s methodology, findings, and policy implications.