Online education has grown rapidly over the past decade. By 2020, one in four undergraduates were enrolled in exclusively online programs, double the number enrolled in 2012. The policy landscape concerning online education changed markedly with the establishment of the State Authorization Reciprocity Agreement (SARA) in 2014. SARA is a multistate initiative that aims to expand access to online learning opportunities by streamlining the process by which institutions are authorized to enroll out-of-state students in online programs. Once a state joins SARA, all approved institutions within that state are automatically authorized to enroll students from other SARA member states. As of the time of writing, all US states except California participate in SARA.

Prior work by Ithaka S+R found that the introduction of SARA expanded online enrollment, especially among institutions that were early adopters. However, less is known about how SARA has influenced the composition of enrollment, particularly for students enrolled in out-of-state, exclusively online programs, the type of program most likely influenced by SARA’s implementation.

Using nationally representative survey data from the National Postsecondary Student Aid Study (NPSAS), this report documents who is enrolling in different program modalities, and how those enrollment patterns shifted both before and after SARA. We focus on online programs that enroll students residing out-of-state, some of which began enrolling across state lines prior to SARA and others after its implementation. Several findings stand out:

  • Growth in online programs. Among students in the nationally representative NPSAS sample, exclusively online enrollment doubled while overall undergraduate enrollment declined.
  • Institutional shifts. Out-of-state online program enrollment was once dominated by for-profit institutions (70 percent of enrollment in 2012) but now a growing number of students are enrolling in programs provided by private not-for-profits and public universities (23 percent in 2012 to 52 percent in 2020).
  • Student demographics. Out-of-state online students in the sample skew older and are more likely to be women and Black. Out-of-state online students also receive Pell Grants at a higher rate. Hispanic and Asian students are underrepresented among out-of-state online students, potentially due to California’s non-participation in SARA.
  • Fields of study. Business and management are the most common fields of study for students in out-of-state online programs in our sample, but they have become less popular relative to other fields over time.

While the results are suggestive, they imply that SARA may have played a role in weakening the for-profit sector’s dominance of out-of-state online enrollment, while increasing the mix of fields of study that out-of-state online students pursue.

This analysis, supported by the Joyce Foundation and Strada Education Foundation, represents the first phase of a two-phase project. The second phase will use an experimental design to explore how labor market outcomes vary by the type of institution and program that awarded an applicant’s credential, with a focus on online degrees earned at out-of-state institutions.