In 1992, the 50-percent rule came into force which excludes Title IV eligible institutions from offering federal financial aid if over 50 percent of its classes are in distance education, more than 50 percent of its students are pursuing distance courses and more than 50 percent of its courses are in distance education.

The 12-hour rule was originally conceived as a means of combating fraud by diploma mills. The rule requires that non-traditional, higher education programs must offer a minimum of 12 hours of teaching per week for students to be able to apply for federal financial aid.The teaching can be in the form of instruction, examination or examination preparation.

The Distance Education Demonstration Program of 1998 came about to review the rules for financial aid in distance education. Several colleges and universities were exempted from the 50-percent and 12 hour rule to enable increased access for students to Title IV funding.

The Buckley Agreement or the Family Education Rights and Privacy Act of 1974 lay down federal guidelines to ensure privacy of student records. It gave students the right to review educational records, request corrections in the records, give consent on revealing personal details in their records and lodge complaints with the US Department of Education on FERPA violations. Online degrees info reports:

The 50-percent rule was created in 1992 and continues today within the 1998 reauthorization of the Higher Education Act. This regulation excludes Title-IV eligible institutions from offering federal financial aid if: it offers more than half its classes through distance education, has half or more of its students enrolled in distance learning courses, or offers correspondence and telecommunications courses that amount to half or more of all courses. The 50-percent provision is a statute that can be revised or eliminated only by Congress.