SED NO.
8R
AN ACT to amend the education law, in relation to the licensure of private proprietary schools
The People of
the State of
Section 1. The article heading of article 101 of the education law is amended to read as follows:
ARTICLE
101--LICENSED PRIVATE [TRADE AND CORRESPONDENCE] CAREER SCHOOLS AND CERTIFIED ENGLISH
AS A SECOND LANGUAGE SCHOOLS
§ 2. Section 5001 of the education law, as added by chapter 817 of the laws of 1972, the section heading, subdivision 1, paragraph h of subdivision 2 and paragraph b of subdivision 4 as amended and paragraphs i, j, k, l and m of subdivision 2 and subdivisions 2-a and 2-b as added by chapter 434 of the laws of 1999, paragraph b of subdivision 2 as amended by chapter 887 of the laws of 1990 and subdivisions 5, 6, 7, 8 and 9 as added by chapter 887 of the laws of 1990 and renumbered by chapter 604 of the laws of 1993, paragraph d of subdivision 2 and subdivision 4 as amended and paragraphs a, b, c and d of subdivision 9 as added by chapter 604 of the laws of 1993 and paragraphs e and f of subdivision 2 as amended by chapter 439 of the laws of 1980, is amended to read as follows:
§ 5001. Licensed private career schools and [registered business schools/computer training facilities]. 1. Schools required to be licensed [or registered]. No private school [or computer training facility] which charges tuition or fees [for] related to instruction and which is not exempted hereunder shall be operated by any person or persons, firm, corporation, or private organization for the purpose of teaching or giving instruction in any subject or subjects, unless it is licensed [or registered] by the department. As used in this article, [the following terms shall have the following meanings:
a. “Licensed] “licensed private career school" or “licensed private school” shall mean any entity offering to instruct or teach any subject by any plan or method including written, visual or audio-visual methods, and shall include any institution licensed or registered as a registered business school or computer training facility on the effective date of the chapter of the laws of two thousand eight which amended this subdivision. Following such effective date, there shall be no distinction between institutions previously defined as "registered business schools” or "computer training facilities" and other licensed private schools, and any reference in law to a registered business school or computer training facility shall be deemed a reference to a licensed private career school. Institutions holding a valid business school registration on such effective date, including computer-training facilities, shall have such registrations replaced by the commissioner, at no cost, with licenses valid until the expiration date listed on such previous registration.
. b.
["Registered business school" shall mean a school in which a
curriculum primarily provides a sequence of courses that may include accounting
or bookkeeping, marketing, business arithmetic, business law, business English,
shorthand, typing, computer business applications/programming, or substantially
all said courses, for the purpose of preparing an individual to pursue a
business occupation; provided, however, that a registered business school
program may include instruction in English as a second language at a beginning
or basic level, provided such
instruction shall not constitute more than fifty percent of such program. Such authorization shall apply to all students
who commence instruction in a registered business school program prior to July
first, nineteen hundred ninety-one. A
business school registered under this section shall employ only teachers
licensed by the department, whose qualifications are substantially equivalent
to those required of teachers of equivalent subjects in public secondary
schools] “certified English as a second language school” or “certified ESL
school shall mean a language school conducted for-profit which provides
instruction in English as a second language and which accepts no public funds
and is certified pursuant to paragraph f of subdivision four of this section .
[c. "Computer training facility" shall mean any entity primarily engaged in providing training on the use, language, programs, application, networking and technical repair of computers.]
2. Exempt schools. The following schools are exempted from the licensing requirement of this section:
a. institutions authorized to confer degrees in this state;
b. schools[, other than correspondence schools,] providing kindergarten, nursery, elementary or secondary education, except schools conducted for profit which provide instruction in English as a second language or preparation for high school equivalency examinations to out-of-school youth or adults;
c. schools operated by governmental agencies or authorities;
d. schools which engage exclusively in training of students with disabilities as defined in section forty-four hundred one of this chapter;
e. schools conducted on a not-for-profit basis by firms or organizations for the training of their own employees only, provided that such instruction is offered at no charge to such employees, or by a fraternal society or benevolent order for its members or their immediate relatives only;
f. schools which provide instruction in the following subjects only: religion, dancing, music, painting, drawing, sculpture, poetry, dramatic art, languages, reading comprehension, mathematics, recreation and athletics, except schools conducted for the purpose of training teachers in these vocational subjects;
g. schools in which the course of instruction is licensed, registered or approved under any other section of this chapter or by any other department or agency of the state;
h. schools which provide instruction designed solely for giving flight training and/or related ground school instruction;
i. schools in which instruction designed solely to prepare applicants for admission to professional licensing examinations administered by the department pursuant to title eight of this chapter, and applicants for examination for admission to the practice of law;
j. schools which offer continuing education courses exclusively for individuals licensed by the department pursuant to title eight of this chapter and for individuals admitted to the practice of law;
k. schools which provide instruction given exclusively to employees of a person or organization which has contracted with another person or organization to provide such instruction at no cost to the employees;
l. conferences, trade shows, workshops, seminars, institutes or courses of study offered and sponsored either jointly or individually by recognized trade, business or professional organizations for the benefit of their membership; [or those offered to the general public by individuals, firms or organizations which neither conduct such activities for a duration of more than five consecutive days nor more frequently than twice in any one calendar year;]
m.
schools that limit their total conferences, trade shows, workshops,
seminars, institutes or other course offerings to no more than twice in one
calendar year with each of those offerings for no more than five days;
n. schools which provide
instruction exclusively to persons employed
full-time or part-time
in the field
in which instruction is
being offered, where the instruction is
provided to meet continuing
education standards required for professional licensure as
defined by law in this state; and
o. schools in candidacy status
pursuant to subparagraph (iii) of paragraph b of subdivision four of this
section.
2-a. Schools exempted pursuant to subdivision two of this section may waive such exemption and apply for a license [or registration]; provided, however, that the review of such applications shall be left to the discretion of the commissioner.
2-b. Programs offered by licensed private career schools [or registered business schools to private businesses where there is no tuition liability] to employees of a person or organization which has contracted with another person or organization to provide such instruction at no cost to the employees shall be exempt from the requirements of this article, provided that the following requirements are met:
a. Only employees of the [private business] employer for which the program is being offered may enroll in classes that make up the program.
b. Certificates or diplomas awarded to students in the program may not reference in any way the department.
c. Prior to the commencement of the program, such schools shall submit to the department a disclosure form, prescribed by the commissioner, copies of which shall be provided to all students in such exempt program, which shall include but not be limited to the following information:
(i) a description of the location and time period in which the program will be offered;
(ii) a statement that the students enrolled in the program shall not be subject to any tuition liability for the program, even if such students do not complete the program;
(iii) a statement that the program being provided to the [private business] employer has not been approved by the department and is not under the department's jurisdiction and that the students in the program have been advised of the fact; and
(iv) the signatures of the school director or owner of the school and the representative of the [private business] employer for which the program is being offered certifying the accuracy of the statements on the form.
d. Any additional student openings in a program deemed exempt by the department may be made available to students not affiliated with the [private business] employer on the condition that such students execute a disclosure form as prescribed in paragraph c of this subdivision. Such admitted students shall only constitute up to ten percent of the exempt program’s total capacity.
4. Application, renewal application and application fees. a. Application and renewal application for a license as a private career school [or registration as a business school] required by the commissioner shall be filed on forms prescribed and provided by the department. Except as provided in subparagraph (iii) of paragraph e of this subdivision, each renewal application for [a private business school registered pursuant to this section or for] a private career school licensed pursuant to this section shall include an audited financial statement audited according to generally accepted auditing standards by an independent certified public accountant or an independent public accountant and statistical reports certified by the owner or operator of the school, as required by the commissioner; provided, however, that the commissioner shall accept a copy of a current financial statement previously filed by a school with any other governmental agency in compliance with the provisions of any federal or state laws, or rules or regulations if such statement contains all of the information required under this subdivision and conforms to this subdivision's requirements of auditing, review and certification. Any required audit of the financial statement shall be a condition of licensure [or registration] and shall be paid for by the school, and the results of the audit shall be forwarded to the commissioner. Applications not accompanied by the audits and reports required pursuant to this subdivision shall not be considered for approval by the commissioner. Initial applications shall be accompanied by financial reports as required by the commissioner. [The commissioner shall act on an initial application for a license or registration within one hundred twenty days of receipt of a complete application.] The applicant shall receive a written approval or denial together with the reasons for a denial of such application.
b. (i) An initial license [or registration] issued pursuant to the provisions of this article shall be valid for a period of two years. A renewal of license [or registration] issued pursuant to the provisions of this article shall be valid for a period of four years. [All license and registration fees for a renewal shall be double the amounts listed in paragraph g of this subdivision.]
(ii) Each school shall display, near the entrance to the school [and under glass], the license [or registration] which has been issued to it. Such authorization shall be displayed only during the period of its validity.
(iii) A school which has applied
for a private career school license may request candidacy status for one time
only. Candidacy status will not be
issued to schools offering programs to train students to pass licensure
examinations such as appearance enhancement tests, achieve nurse aide or nurse
assistant certification, or pass examinations leading to licensure in any other profession or occupation determined
by the commissioner to require full licensure status. Candidacy status shall
allow a school to operate unlicensed for an initial period of twelve months
during the licensure application process, which may be extended to a maximum,
non-renewable period of eighteen months, under the following conditions:
(1) The prospective school
submits a candidate school application fee, separate from the school
application fee, of five thousand dollars which shall accrue to the credit of
the proprietary vocational school supervision account;
(2) The school may in no way
represent that it is licensed or that its programs are approved through the
department;
(3) To every prospective student,
the school must disseminate a statement, provided by the department, that the
facilities, instructors, and programs being provided have not been approved and
are not under the department's jurisdiction during the candidacy period. Such statement shall indicate that students
attending candidate schools will have no recourse through the department’s
student complaint process nor have any restitution available from the tuition
reimbursement account. Students must
sign an attestation to the receipt of this statement. The school must retain the signed attestation
and provide the student with a copy of that signed statement;
(4) The school must demonstrate
financial viability through means deemed appropriate by the commissioner. Such means may include submitting an audited
financial statement based on the most recently completed fiscal year; securing and maintaining a performance bond,
payable to the commissioner, in an amount appropriate to eliminate any
liability to the tuition reimbursement account in the event the school ceases
operation; limiting the collection of tuition funds until each student
completes the program of study; or other means acceptable to the commissioner;
and
(5) Any breach of the above conditions will result in the disapproval of the school’s licensure application and the forfeiture of candidate status. Continued operation after this disapproval will subject the school to the disciplinary action prescribed under paragraph b of subdivision six of section five thousand three of this article.
(6) On or before the end of the
initial twelve-month period of candidacy status, the commissioner shall review
the school’s application for licensure and documentation relating to the
school’s candidacy status and shall determine whether such candidacy status should be extended to
the full eighteen months and whether the school may continue to enroll students
beyond the eighteen-month period or the school’s application for licensure will
be initially disapproved for failure to meet required standards.
c. An application for renewal of any license [or registration] shall be submitted at least one hundred twenty days prior to the expiration date of the current authorization to operate accompanied by the nonrefundable application fee and such certified statistical reports and annual financial statements required pursuant to this subdivision.
d. When complete and timely application has been made for renewal of any license [or registration], the school shall receive a written approval or denial, together with the reasons for denial of renewal, from the commissioner no less than thirty days prior to the date such license
[or registration] expires.
e. Financial statements and statistical reports. (i) Licensed private career schools and [registered business] candidate schools shall submit such certified statistical reports and annual financial statements as required by the commissioner. The commissioner may require audited statistical reports upon a determination that a school has provided false or inaccurate certified statistical reports. The financial statements shall be based on the fiscal year of the school and shall also include an itemized account of tuition refunds due and owing to past or presently enrolled students. Statistical reports shall include, but not be limited to, enrollment, completion and placement data. The commissioner shall use such financial statements and statistical reports submitted for the purposes of licensure [and registration] of schools, establishing fees or assessments pursuant to this article and determining standards pursuant to paragraph b of subdivision five of section five thousand two of this article. The attorney general, the comptroller and the president of the higher education services corporation shall have access to this information when it is necessary to perform their duties as required by state law.
(ii) [Any school which received in excess of two hundred fifty thousand dollars in gross tuition in a school fiscal year] Schools shall be required to submit to the commissioner an annual audited financial statement [to the commissioner] prepared in accordance with generally accepted accounting principles for [that] each fiscal year. [In addition, any school which has a gross tuition of two hundred fifty thousand dollars or less in a school fiscal year but whose combined state and federal student financial aid in such year exceeds one hundred thousand dollars shall also submit an annual audited financial statement to the commissioner for that fiscal year.]
(iii) [Schools] Notwithstanding the provisions of subparagraph (ii) of this paragraph, for fiscal years relating to the initial two year licensure period, any school having an annual gross tuition income of two hundred fifty thousand dollars or less may submit a reviewed financial statement rather than an audited financial statement. In addition, any school licensed prior to the effective date of this subparagraph, as amended by a chapter of the laws of two thousand eight, whose gross tuition is two hundred fifty thousand dollars or less in a school fiscal year and which receive less than one hundred thousand dollars in state and federal student financial aid in a school fiscal year shall be permitted to continue to file with the commissioner an unaudited financial statement in a format prescribed by the commissioner, provided, however, that any such school [with gross tuition in excess of fifty thousand dollars shall have filed at least one audited financial statement after the first year of its operation. The statement shall be signed by the president or chief executive officer and the chief fiscal officer of the school who shall certify that the statements are true and accurate] shall begin filing audited financial statements as of the school’s fiscal year ending three years or more after the effective date of the chapter of the laws of two thousand eight which amended this subparagraph. Upon a determination by the commissioner that a school has submitted false or inaccurate statements or that a significant, unsubstantiated decline in gross tuition has occurred, the commissioner may require any such school to file an audited financial statement pursuant to this paragraph.
f. Alternate licensing provision. The commissioner shall issue regulations which define alternate licensing or certification requirements for the following:
(1) correspondence schools in which all approved programs and courses are under three hundred hours;
(2) schools which are eligible for exemption under this section but which elect to be licensed;
(3) non-profit schools exempt from taxation under section 501(c)(3) of the internal revenue code whose programs are funded entirely through donations from individuals or philanthropic organizations, or endowments, and interest accrued thereon; and
(4) language schools conducted for-profit which provide instruction in English as a second language and which accept no public funds.
g. Application fee. (i) Every applicant
and renewal applicant shall pay to the department a nonrefundable,
nontransferable application fee. The application fee for new schools shall be
five thousand dollars, of which three thousand dollars shall accrue to the
credit of the proprietary vocational school supervision account and two
thousand dollars shall accrue to the tuition reimbursement account. For
additional licensed locations of currently operating schools, the application
fee shall be two thousand five hundred dollars, which shall accrue to the
credit of the proprietary vocational school supervision account.
(ii) For renewal applications, the fee shall be based on gross annual tuition income as determined by the annual financial statements required in paragraph a of this subdivision for the most recent school fiscal year, according to the following schedule:
GROSS ANNUAL TUITION INCOME FEE
0-$199,999 $[250.00] 750.00
$200,000-$499,999 $[500.00] 1,500.00
$500,000-$999,999 $[750.00] 2,250.00
$1,000,000-$4,999,999 $[1,500.00] 4,500.00
$5,000,000-$9,999,999 $[3,000.00] 9,000.00
$10,000,000 or above $[6,000.00] 18 ,000.00
Such renewal fees shall accrue to the credit of the proprietary vocational school supervision account. If the evaluation of a particular course or facility requires the services of an expert not employed by the department, the department shall retain such expert and the school shall reimburse the department for the reasonable cost of such services.
5. Required disclosure for licensure. a. The commissioner shall require that each applicant for a license for the operation of a private [vocational or business] career school disclose the following information:
(1) Whether the applicant, or any corporation, partnership, association or organization or person holding an ownership or control interest in such school, or any employee responsible in a supervisory capacity for the administration of student funds or governmental funds, has been convicted of a crime defined in this article, or any other crime involving the operation of any educational or training program, or, in connection with the operation of any such program, a crime involving the unlawful acquisition, use, payment or expenditure of educational or training program funds; and
(2) Whether the applicant, or any corporation, partnership, association or organization or person holding an ownership or control interest in such school, or any employee responsible in a supervisory capacity for the administration of student funds or governmental funds has been convicted:
(A) in this state of any of the following felonies defined in the penal law: bribery involving public servants; commercial bribery; perjury in the second degree; rewarding official misconduct; larceny, in connection with the provision of services or involving the theft of governmental funds; offering a false instrument for filing, falsifying business records; tampering with public records; criminal usury; scheme to defraud; or defrauding the government; or
(B) in any other jurisdiction of an offense which is substantially similar to any of the felonies defined in clause (A) of this subparagraph and for which a sentence to a term of imprisonment in excess of one year was authorized and is authorized in this state regardless of whether such sentence was imposed; and
(3) Whether the applicant, or any corporation, partnership, association or organization or person holding an ownership or control interest in such school, or any employee responsible in a supervisory capacity for the administration of student funds or governmental funds, has been finally determined in any administrative or civil proceeding to have committed a violation of any provision of this article or any rules and regulations promulgated pursuant thereto, or any related order or determination of the commissioner, or of any similar statute, rule, regulation, order or determination of another jurisdiction pertaining to the licensure and operation of any educational or training program; and
(4) Whether any school owned or operated by the applicant closed or ceased operation and, if so, whether at the time of the closing the applicant was subject to a pending disciplinary action, disallowance, fine or other penalty and whether it owed refunds to any government agency or students.
b. No application for any license pursuant to this article shall be denied by reason of disclosure pursuant to this subdivision of the applicant, or any corporation, partnership, association or organization or person holding an ownership or control interest in such school, or any employee responsible in a supervisory capacity for the administration of student funds or governmental funds unless the commissioner makes a written determination that there is a direct relationship between one or more of such previous offenses and the license sought, or that issuance of the license would create an unreasonable risk to property or to the safety, education or welfare of specific individuals or the general public. In making such determination, the commissioner shall be guided by the factors set forth in section seven hundred fifty-three of the correction law. For purposes of this subdivision, "ownership or control interest" means: with respect to a school that is organized as or owned by a corporation, a position as an officer or director of such corporation; or, with respect to a school that is organized as or owned by a partnership, a position as a partner; or any other interest totaling ten percent or more, whether direct or indirect, in the total equity or assets of such school.
c. The commissioner may deny, suspend, revoke or decline to renew any license: (1) if the significance of the convictions or administrative violations warrant such action; or (2) if the commissioner determines that a school did not make any disclosure required by this subdivision; or (3) if the commissioner determines that a school's financial condition may result in the interruption or cessation of instruction or jeopardize student tuition funds.
6. If, during the [two year] period for which a license [or registration] is granted, the commissioner determines that a school's financial condition may result in the interruption or cessation of instruction or jeopardize student tuition funds, the commissioner may, upon notice to the school, place the school on probation for a period of no more than [thirty days] one year, during which time the school and the department must make efforts to resolve the problems at the school. The school shall submit a report on its financial condition to the commissioner within the time prescribed by the commissioner. Such report shall be in the form and shall include content prescribed by the commissioner and shall be reviewed by the commissioner to determine the school’s financial viability. The commissioner may suspend or revoke the school’s license, as well as require the cessation of student enrollment, upon a determination that the school’s financial condition continues to threaten its ability to educate students and/or the student tuition funds. Alternatives for the school to demonstrate a fiscally sound operation may include securing and maintaining a performance bond, payable to the commissioner, in an appropriate amount to eliminate any liability to the tuition reimbursement account should the school cease operation, limiting the collection of tuition funds until each student completes the program of study, or other means acceptable to the commissioner. If no resolution can be attained, a hearing, pursuant to subdivisions two and three of section five thousand three of this article will be scheduled. Such probation may include additional monitoring, inspections, limitations on enrollment, teaching out some or all of a school's present students or temporary cessation of instruction.
7. No license [or registration] granted under this section shall be transferable or assignable without the approval of the commissioner. [Any] Upon transfer or assignment of any interest totaling [ten] twenty-five percent or more, whether direct or indirect, in the total equity or assets of a school, such school shall be deemed a [transfer of such school's license or registration. The commissioner shall approve or deny a transfer or assignment based on the requirements set forth in subdivisions three and four of this section. Such approval or denial, together with the reasons for denial, shall be transmitted in writing within ninety days of the receipt of the complete application by the commissioner. Upon a showing of good cause as to why the applicant could not obtain the commissioner's approval prior to a transfer or assignment, the commissioner shall temporarily approve the transfer or assignment for a period not to exceed forty-five days and for such additional periods as the commissioner may deem appropriate] new school required to submit a new school application and obtain a new license pursuant to this article. Provided, however that upon such a substantial change in interest, the previous school license shall remain in effect until the new license is issued or denied or the previous license expires or is revoked, whichever occurs first.
8. No licensed [or registered] school shall discontinue operation or surrender its license [or registration] unless thirty days written notice of its intention to do so and a plan for maintenance of safe keeping of the records of the school is provided to the commissioner. However, upon good cause shown, the commissioner may waive the thirty days notice requirement.
9. Annual supervision fund and tuition reimbursement [fund] account assessment.
a. The commissioner shall annually assess each school a total percentage of that school's gross tuition pursuant to subdivision three of section five thousand two of this article, as determined by the annual [financial statement or annual] audited financial statement required by this article. This assessment shall be based upon each school's gross tuition from the previous year, and shall be payable to the commissioner in equal quarterly installments which shall be due on June first, September first, December first and March first.
b. (i) [Beginning April first, nineteen hundred ninety-one, such] Such annualized assessment shall be one percent for schools which have paid less than sixteen quarters of assessments, but such annual assessment shall not fall below five hundred dollars.
(ii) [Beginning July first, nineteen hundred ninety-four, such] Such annualized assessment shall be [nine-tenths] eight-tenths of one percent for schools which have paid sixteen or more quarters of assessments, but such annual assessment shall not fall below five hundred dollars.
[(iii) Beginning April first, nineteen hundred ninety-five, and in each succeeding year, such annualized assessment shall be eight-tenths of one percent.]
c.
(i) Of the total assessment provided for herein, five-tenths of one percent
shall accrue to the credit of the tuition reimbursement account pursuant to
section five thousand seven of this article for those schools which have paid
less than sixteen quarters of assessments.
Of the total assessment provided for schools which have paid sixteen or
more quarters of assessments, three-tenths of one percent shall accrue to
the credit of the tuition reimbursement [fund] account pursuant to
section five thousand seven of this article.
For schools paying the minimum five hundred dollars annual
assessment, none shall accrue to the tuition reimbursement account.
(ii) The balance of the total assessment provided for herein shall be dedicated to fund the department's supervision and regulation of licensed private schools [and registered business schools] pursuant to an annual appropriation and an annual plan of expenditure prepared by the commissioner and approved by the director of the budget. [Following the close of each fiscal year, the commissioner, in consultation with the director of the budget, shall determine if the balance in the proprietary vocational school supervision fund for such fiscal year exceeded the amount required for the support of the department's supervisory activities taking into account projected revenues and expenditures for the subsequent fiscal year. To the extent that a surplus is identified, the commissioner, with the approval of the director of the budget, shall direct the transfer of such surplus to the tuition reimbursement fund.]
d. Payments made within thirty days following the due date shall be subject to interest at one percent above the prevailing prime rate. Thereafter, late payments may result in suspension of licensure by the commissioner. Payments required by this subdivision shall be considered a condition of licensure [or registration].
§ 3. Section 5002 of the education law, as added by chapter 887 of the laws of 1990, subparagraph 3 of paragraph b and paragraph d of subdivision 1, subparagraph 2 of paragraph g of subdivision 3 and subdivision 6 as amended and paragraph d of subdivision 2 as added by chapter 604 of the laws of 1993, paragraph c of subdivision 2, paragraph a of subdivision 4 and subdivision 7 as amended and paragraph e of subdivision 4, paragraph c of subdivision 6 as added by chapter 434 of the laws of 1999, paragraph f of subdivision 4 as added by chapter 457 of the laws of 2003 and subparagraph 2 of paragraph b of subdivision 5 as amended by chapter 301 of the laws of 1996, is amended to read as follows:
§ 5002. Standards for licensed private career schools [and registered business schools]. Any school licensed [or registered] pursuant to section five thousand one of this article shall be organized and conducted only as a school and shall be subject to the jurisdiction of the department exclusively, or in conjunction with such other state agency or department or district attorney upon which jurisdiction has also been conferred by law. Such schools shall be subject to and comply with the provisions of this section.
1. Standards. a. No program of such schools shall be conducted in a factory or commercial establishment, except where the use of facilities or equipment of such factory or commercial establishment is permitted for necessary or desirable educational purposes and objectives.
b. For every such school, the commissioner shall set forth in regulation standards governing all of the following:
(1) criteria for admission, which shall provide that students at least possess a high school diploma or its equivalent or demonstrate the ability to benefit from the instruction, except that in the case of students who do not possess a high school diploma or its equivalent, certification of the students' ability to benefit from instruction shall be provided to the commissioner as provided in paragraph c of this subdivision;
(2) the standards and the methods of instruction;
(3) the equipment available for instruction with the maximum enrollment that such equipment and physical plant will accommodate;
(4) the qualifications and experience of teaching and management personnel;
(5) the form and content of the student enrollment agreement or contract, provided that such agreement or contract shall be written in the same language as that principally used in the sales presentation;
(6)
the methods of collecting tuition;
(7) eligibility criteria for programs that will require licensure;
(8) the sufficiency and suitability of the resources available for the support of such school; and
(9) counseling provided to students.
b-1.
Student loans and financial aid.
(1) Student loans or other
financial aid funds received from federal, state, or local governments or
administered under the federal student financial assistance programs governed
by Title IV of the Higher Education Act of nineteen hundred sixty-five, 20 U.S.C. section 1070 et seq., as amended,
must be collected and applied in the manner as controlled by the applicable
federal, state or local regulations.
(2) Student loans or other financial aid funds
received from private entities including, but not limited to, banks, financing
companies, and other lending sources must be collected or disbursed in the
following manner:
(A)
Loans or other financial aid payments for amounts of five thousand
dollars or less may be disbursed as a single disbursement, regardless of course
length.
(B) Loans or other financial aid payments for amounts greater than five
thousand dollars that reflect a class term of less than six months shall have
two equal disbursements. The
disbursement schedule for such loans or payments shall be as follows: one-half of the tuition amount released
initially, and the remainder released halfway through the course term.
(C) Loans or other financial aid payments for
amounts greater than five thousand dollars that reflect a class term of greater
than six months, but less than twelve months must have three equal
disbursements. The disbursement schedule
for such loans or payments shall be as follows:
one-third of the tuition amount released initially, the second
disbursement shall be released one-third of the way through the length of the
training, and the remainder released two-thirds of the way through the course
term.
(D) Loans of other financial aid payments for amounts greater
than five thousand dollars that reflect a class term greater than twelve months
shall have four equal disbursements. The
disbursement schedule for such loans or payments shall be as follows: one-quarter of the tuition amount released
initially, the second disbursement shall be released one quarter of the way
through the length of the training; the third disbursement shall be released
halfway through the length of the training, and the remainder shall be released
three-quarters of the way through the training.
(3) No school may enter into any contract or
agreement with, or receive any student loan or financial aid funds from,
private entities including, but not limited to, banks, financing companies, and
any other private lending sources unless the private entity has a disbursement
policy that, at a minimum, meets the requirements of subparagraph two of this
paragraph.
c. Notwithstanding any other provisions of this article to the contrary, the commissioner shall define alternative educational and curriculum standards for any program of less than forty hours designed exclusively for non-occupational, personal enrichment purposes.
d. Admission of students under the ability to benefit provision.
(1)
Certification. Each school admitting students who do not
possess at least a high
school diploma or its equivalent shall certify to the satisfaction of the commissioner that such
prospective students have
been administered and passed an examination which has been
approved by the commissioner to
determine their ability to benefit from
the chosen curriculum prior to admission to the
curriculum or course of study. Such examination shall, whenever possible, be a
nationally recognized test appropriate for the course of instruction which has
been approved by the commissioner. The examination results
of each such
student who is admitted
shall be made
available to the
commissioner at a time
prescribed by the commissioner and, together with the student's original answer
sheet, shall be maintained
by the school
in the student's permanent record. For any student
failing to achieve the necessary score on
such examination for enrollment, the school shall be required to provide such
student with a
listing of appropriate
counseling and educational opportunities
available to the
student at no cost, as determined by the commissioner. Where appropriate, the commissioner may
accept such other entrance requirement documentation such as prerequisite
coursework, professional or vendor certifications, personal interviews, and/or
attestations of equivalent knowledge in lieu of the examination requirement.
(2) Counseling. Each school [admitting] offering curricula which admit students who do not possess a high school diploma or its equivalent shall develop a plan to be approved by the commissioner for the counseling of such students on an individual basis on matters including but not limited to the student's ability to progress in the curriculum, the student's financial aid rights and responsibilities, the availability of programs to earn a high school equivalency diploma, including programs provided at no cost to the student, and the potential of the training to prepare the student for available employment opportunities within the region.
(3) Compliance. (A) The commissioner shall monitor compliance with this paragraph and verify the examination and counseling process and student examination scores. Such procedures may include but not be limited to an annual, statistically significant, random sampling of the examinations taken by prospective students of each school administering such examinations.
(B) [Such procedures shall provide that the examinations of each school be inspected on site at least once annually.
(C)] In the event that the commissioner determines that the school is out of compliance with the examination process and counseling, the commissioner shall require that examinations and counseling for students admitted under the ability to benefit provision and the counseling required by subparagraph two of this paragraph be conducted off the premises of the school by an entity approved by the commissioner for such period of time as the commissioner deems appropriate, the cost of which shall be incurred by the school.
2. Inspections. a. Every school licensed pursuant to this article shall maintain adequate and accurate records for a period of not less than [six] seven years at its principal place of business within this state. Such records shall be maintained in a manner and form prescribed by the commissioner and shall be made available to the department and the higher education services corporation upon request.
b. In addition to other requirements in this article, the information to be made a part of the record shall include, but not be limited to:
(1) names and addresses of each enrolled student;
(2) the course of study offered by the institution;
(3) the name and address of its faculty, together with a record of the educational qualifications of each;
(4) the graduation date of each student; and
(5) for each student who fails to complete his or her program, the student's last date of attendance and, if applicable, the amount of any refund paid to, or on behalf of, the student and the date the refund was made.
c. The commissioner shall conduct periodic unscheduled inspections of licensed private career schools [and registered business schools] to monitor compliance with the provisions of this article or the rules or regulations promulgated thereunder or any final order or decision of the commissioner made pursuant to this article. The department shall conduct an inspection of each school at least once every [three years. The department shall annually inspect schools: (1) having a high percentage of students admitted under ability to benefit criteria as determined by the commissioner; (2) having a high student loan default rate as determined by the commissioner in a manner consistent with federal standards; or (3) which are the subject of a high volume of complaints by students or other parties] licensure period. All schools shall provide upon request of the department, any and all records necessary to review compliance with the provisions of this article.
d. Student permanent records, as defined in the regulations of the commissioner, shall be maintained for a period of twenty years.
3. Tuition liability. a. The tuition charge for programs approved for participation in student financial aid general award programs pursuant to articles thirteen and fourteen of this chapter shall be apportioned on the basis of terms, quarters or semesters. For the purposes of this section, the terms "term", "quarter" and "semester" shall be defined in regulations by the commissioner.
b. The tuition refund policy for the first term or quarter of any program at schools licensed [or registered] pursuant to section five thousand one of this article shall be as follows:
(1) For programs which are divided into quarters of up to fourteen weeks, the school shall evenly divide the total tuition charges among the number of quarters. After instruction is begun in a school, if a student withdraws or is discontinued, the school may retain no more than:
(i) zero percent of the quarter's tuition if the termination is during the first week of instruction; or
(ii) twenty-five percent of the quarter's tuition if the termination is during the second week of instruction; or
(iii) fifty percent of the quarter's tuition if the termination is during the third week of instruction; or
(iv) seventy-five percent of the quarter's tuition if the termination is during the fourth week of instruction; or
(v) one hundred percent of the quarter's tuition if the termination occurs after the fourth week of instruction.
(2) For programs organize