Authorizes on-site inspections of degree granting proprietary institutions by the commissioner of education for compliance with applicable laws and regulations

Summary of provisions

This bill adds a new section 6456 to the education law to require the commissioner to conduct risk analysis; inspection and oversight review of proprietary schools to insure that they are complying with all state laws and regulations and to charge fees in support of these requirements and to impose fines when violations occur.

The amendment reflects an addition of an advisory council which will advise the Board of Regents and the commissioner on various issues.

Section 2 of the bill defines degree granting proprietary institutions of higher education.

Section 3. The commissioner shall employ a risk analysis in determining the need for on-site inspections and reviews of degree-granting proprietary institutions. The risk analysis shall assess the risk that the institution is out of compliance with law and/or operating in an educationally unsound manner through analysis of the following data: information on student complaints, state and federal audits of an institution's student financial aid, percentage of students in remedial/development classes, changes in enrollment patterns the number of students enrolled at institution requires a site visit based on the risk analysis, all costs related to such visit shall be paid by the institution, including a fee to be paid to the department. The commissioner shall establish in regulations a reasonable fee to be charged for such a site visit based on the cost of such visit to the state. The commissioner shall provide the affected degree-granting proprietary institution reasonable prior notice before the on-site visit.

Section 4. Authorizes the commissioner to impose a progressive fine on proprietary institutions who fail to comply with all laws and regulations. In addition, continued failure to comply after a third

site visit requires the commissioner to begin a process that can result in the de-registration of the institution or specific programs within the institution that no longer meet requirements.

Section 5. Authorizes the department to conduct unannounced visits and to employ student operatives to test for institutional compliance with the law. If violations are found during such unannounced visit, the department may impose fines on the institution if the violations are not corrected within a reasonable period of time.

Section 6. Establishes that the proprietary institution shall be liable for a civil penalty of up to $1,000 for each violation and an additional penalty of not more than $1,000 for each day during which the violation continues after the department has provided written notification and the institution has had an opportunity to be heard by the department or in a court of competent jurisdiction. It also provides that the institution, through a similar process, will be legally enjoined from continuing such practices that are found to be in violation.

Section 7. Authorizes the commissioner to implement regulations necessary to implement the provisions of this bill.

A new section 97(ii) establishes, in the joint custody of the state comptroller and the Commissioner of tax and finance, an account to be known as the degree-granting proprietary institution account. This account will be used by the State Education Department for all expenses related to the supervision and oversight of for-profit degree granting proprietary schools.

Finally, the bill requires the department to visit, within one year of acquisition, any proprietary institution that has been purchased or whose ownership has been transferred to a new entity. Such costs associated with such visit shall be paid for by the new entity as well as any subsequent visits necessary to ensure that the new entity is in compliance with all state laws and regulations.

Justification

Over the last several decades our state has continued to make substantial investments in the education of young adults seeking the skills necessary to be successful in our increasingly competitive and technologically based society. One important and very effective means to achieve that goal is fulfilled by proprietary institutions, authorized to offer educational course and college degrees in New York by the Regents. They provide focused practical education and training to thousands of students who are otherwise not able to access traditional higher education institutions. These proprietary institutions have a.long and successful record of accomplishment in serving individuals who have had earlier educational training and who have limited economic resources.

However, it is extremely important to the state and in the public's interest to ensure that when these individuals enroll in a program offered by for-profit schools, that they have the ability to benefit from the education offered and equally important, that the

institution have the ability and resources to provide the education they claim is available to these students.

The provisions of the legislation provide the state education department with the means necessary to ensure that both of these factors, the student's ability to benefit and the college's ability to offer services, are being achieved to the standards established by the state education department.

This bill avoids placing additional financial burdens on those institutions that have been and continue to invest in their facilities, maintain performance standards and comply with state laws and regulations. Alternatively, for these schools who refuse to comply or fail to make the necessary investments, this bill allows for significant fees and fines to be imposed, and also requires the eventual de-registration of programs and the school itself, in order to ensure that students and the public are protected from unauthorized or illegal actions.

Legislative history

2009-10, S.1042: 2007-08; S.8129-A, 2005-06.

Fiscal implications

None.

Local fiscal implications

None.

Effective date

Immediately.